Siddaramaiah seeks fair proportion of central tax income

During the assembly, the chief minister highlighted that Karnataka’s share in tax devolution noticed a pointy decline beneath the fifteenth Finance Commission, falling from 4.713% to three.647% — a discount of over 23%. This, he mentioned, translated into an estimated cumulative lack of ₹80,000 crore over the award interval, together with the denial of particular grants value ₹11,495 crore.

“We have dropped at the finance minister’s consideration that Karnataka has been unfairly impacted by the prevailing devolution components, particularly because of the over-reliance on the income-distance criterion, which carried a forty five% weightage beneath the fifteenth Finance Commission,” Siddaramaiah mentioned after the assembly.

He urged the Union authorities to advocate for a extra growth-oriented method in its submission to the sixteenth Finance Commission. “We have requested that the weightage for the income-distance criterion be diminished by 20 proportion factors and reallocated to fiscal contribution, which displays a state’s share within the nationwide GDP,” he mentioned.

The chief minister additionally objected to the present design of Revenue Deficit Grants, which he argued are misaligned with fiscal self-discipline goals laid out beneath the Fiscal Responsibility and Budget Management (FRBM) framework.

“Revenue deficit grants, of their present type, contradict the spirit of fiscal self-discipline. We have prompt that the identical quantity — which was 1.92% of Gross Union Receipts beneath the fifteenth Finance Commission — be distributed amongst all states utilizing the horizontal devolution components,” Siddaramaiah mentioned.

He additionally flagged the distinctive developmental challenges confronted by areas equivalent to Bengaluru, Kalyana Karnataka, and Malenadu, stating {that a} truthful devolution coverage would assist speed up progress and bridge regional disparities.

“This will not be a plea for particular remedy. Karnataka’s proposals are supposed to strengthen nationwide useful resource mobilisation and uphold the spirit of cooperative and aggressive federalism,” he mentioned.

Siddaramaiah concluded by urging Sitharaman to include Karnataka’s proposals within the Union authorities’s official memorandum to the sixteenth Finance Commission. “A professional-growth devolution method will empower each state to contribute meaningfully to India’s improvement journey,” he mentioned.

The sixteenth Finance Commission, arrange in December 2023 beneath the chairmanship of Arvind Panagariya, is predicted to provide its suggestions by October 31, 2025, which can be relevant for a five-year interval starting April 1, 2026.

The fifteenth Finance Commission headed by N Okay Singh had prompt that states be given 41% of the divisible tax pool of the Centre for a five-year interval from April 2021 to March 2026.

With inputs from PTI