Devolution of central funds: CM Siddaramaiah calls on Kannadigas to pledge to raise their voice

Out of a total of ₹1,78,193 crore allocated to 28 States, Karnataka has been given a meagre ₹6,498 crore, the CM said

Alleging that the Centre has done gross injustice by allocating less funds to Karnataka in devolution of taxes, Chief Minister Siddaramaiah on Saturday (October 12, 2024) called upon Kannadigas to pledge to raise their voice against such discrimination.

“The persistent injustice in tax distribution by the NDA government towards Karnataka is undeniable, with the latest tax share figures serving as clear evidence. Out of a total of ₹1,78,193 crore allocated to 28 States, Karnataka has been given a meagre ₹6,498 crore. This gross injustice calls for every Kannadiga, irrespective of caste, religion, or political affiliation, to pledge to raise their voice against such discrimination. Let this Vijayadashami, a symbol of victory over injustice, mark the beginning of our collective fight for fairness,” the Chief Minister said.

“We must initiate a public debate on how Karnataka, while respecting the federal structure, can secure its rightful share. Let this discussion begin today, on the auspicious occasion of Vijayadashami,” he said.

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What wrong has Karnataka done?

Questioning as to what wrong has Karnataka done to deserve such “neglect”, the Chief Minister in a statement said, “The question every proud Kannadiga must ask the central government is why Karnataka’s hard-earned contributions are being used to reward misgoverned and corruption-ridden States. Uttar Pradesh, infamous for its poor governance, has been allocated ₹31,962 crore, Bihar ₹17,921 crore, Madhya Pradesh ₹13,987 crore and Rajasthan ₹10,737 crore.”

He further said that despite contributing significantly to the nation’s tax revenues, Karnataka receives only 3.64% of the total tax share — way below the 17.93% for Uttar Pradesh, 10.05% for Bihar, 6.02% for Rajasthan, and 7.85% for Madhya Pradesh. “The central government’s discriminatory policies are evident in these figures. While Karnataka excels in governance and development, the financial rewards are directed towards poorly governed States,” he said in the statement.

The 14th Finance Commission set Karnataka’s tax share at 4.713%, but the 15th Finance Commission unjustly reduced it to 3.647%, costing the State approximately ₹62,275 crore between 2021-2026. Even when the Finance Commission recommended a special grant of ₹5,495 crore to compensate for the loss, the Central government refused to release the funds. “In total, Karnataka lost a staggering ₹79,770 crore due to unfair tax distribution during this period,” he said.

Second in GST collection

“While Karnataka makes up only 5% of India’s population, it contributes 8.4% to the nation’s GDP. The State ranks second in GST collection and leads the nation in GST growth with a 17% increase. However, Karnataka receives only 52% of the GST it collects, losing ₹59,274 crore since the introduction of GST,” the Chief Minister said.

“Karnataka contributes ₹4.5 lakh crore to the national exchequer annually. However, it receives only ₹45,000 crore in tax share and ₹15,000 crore in grants—a mere 15 paise for every rupee contributed. How long must we tolerate this gross injustice?” the Chief Minister asked.

“Despite the Union budget doubling from ₹24.42 lakh crore in 2018-19 to ₹48.20 lakh crore in 2024-25, Karnataka’s share has stagnated. In 2018-19, the State received ₹46,288 crore, while in 2024-25, it got only ₹44,485 crore, with an additional ₹15,299 crore in grants. Karnataka should receive a minimum of ₹1 lakh crore annually, but it has been denied its rightful share,” he said.

The 15th Finance Commission recommended ₹5,495 crore in special grants and additional funds of ₹6,000 crore for Bangalore’s Peripheral Ring Road and water resource projects. However, Finance Minister Nirmala Sitharaman rejected these recommendations, resulting in Karnataka losing ₹11,495 crore, Mr. Siddaramaiah said.

He said the abolition of the Planning Commission and its replacement with the NITI Aayog marginalised State governments. Additionally, changes to the objectives of the 15th Finance Commission have disproportionately hurt southern States.

Will fight it out: Deputy CM

Deputy Chief Minister D. K. Shivakumar said that the Karnataka government would fight this injustice. Mr. Shivakumar, also the State Congress chief, criticised BJP MPs and Union Ministers from the State for remaining silent on the issue and termed it “shameful.”

“We will fight and protest this in the days ahead. We will formulate a programme to fight for - our tax, our right,” he said. “Why have BJP MPs and Central ministers not raised their voices? Despite having five Central ministers from the State, including Finance Minister Nirmala Sitharaman, it is shameful that they remain silent.”

Published - October 12, 2024 05:48 pm IST