Karnataka is facing a severe drought impacting 101 taluks, with agricultural losses estimated at ₹18,000 crore. Power demand has crossed 19,000 MW, forcing the state to buy expensive electricity at up to ₹13 per unit. A special legislative session is set for September 21-23 to address the crisis.
Karnataka is grappling with a severe drought crisis that is impacting both the agricultural sector and the state's power infrastructure. With 101 taluks officially declared drought-hit, the state is witnessing a sharp decline in groundwater levels, causing significant disruption to rural cultivation. Initial estimates suggest the agricultural sector faces losses of approximately ₹18,000 crore, as over 2 million hectares of land remain uncultivated due to the lack of adequate rainfall.
The energy sector is under equal pressure as electricity demand has surged past 19,000 MW. To manage this shortfall, the state utility has been forced to buy power from the open market at prices ranging from ₹11 to ₹13 per unit. This reliance on expensive short-term power procurement is increasing the financial burden on the state's power distribution utilities. The situation is further complicated by the state's obligation to return borrowed power to other regions, such as Haryana and Uttar Pradesh, which effectively tightens local supply availability.
To handle the resource strain, the government is exploring ways to increase thermal power generation and is looking to leverage the national 'One Nation, One Grid' infrastructure. This strategy aims to bridge the supply gap and prevent potential rolling blackouts. However, importing electricity through this grid system also adds extra transmission costs to the state budget, which could affect overall financial flexibility if the reliance on external power remains high for an extended period.
The state government has scheduled a special legislative session from September 21 to September 23, 2026, to finalize drought mitigation strategies and address the distress of the farming community. For stakeholders and businesses, the situation requires monitoring of two key areas: the state’s budgetary stability regarding rising power procurement costs and the potential for supply interruptions if the current high demand persists without an improvement in weather conditions.