BENGALURU, 5 FEB

Chief Minister Siddaramaiah on Monday hit out at Centre for reduction in tax devolution to State from Central divisible pool. He said the State has incurred a total loss of Rs 1.87 lakh crore during five years under the 15th finance commission due to declining Central grants and urged that they be set right.

The Interim Budget presented by Union Finance Minister Nirmala Sitharaman on 1 February was supposed to allot 42 per cent of tax share due to the State, but it allotted only 35 per cent, Siddaramaiah said, highlighting the data on tax shares sanctioned to the State. “According to 14th Finance Commission (2015-2020), the State should have gotten 42 per cent of the tax share but we got only 35 per cent. The 15th Finance Commission recommended allotting 41 per cent tax to the State, but the Central government allotted only 30 per cent.” The 14th Finance Commission used the census data of 1971 whereas the 15th Finance Commission used the data of 2011 to allocate the tax shares to the states.

Siddaramaiah said Northern India got a higher share in the budget compared to Southern India.

The Central government owes Rs 73,593 crore in total to State over the years in terms of taxes and project funds. The State government had requested Rs 3,000 crore for Peripheral Ring Road project and Rs 3,000 crore for the development and rejuvenation of lakes in the City. Adding to it, Finance Commission recommended Rs 5,495 crore for the State during the interim budget this year but Finance Minister Nirmala Sitharaman rejected it. The tax share to the State has been declining every financial year since 2020-2021 and it has added up to Rs 62,098 crore.

Siddaramaiah claimed that despite the increasing size of the Union Budget, the tax share to the State has not improved significantly. While the budget size in 2018-2019 was Rs 24,42,213 crore, Karnataka received Rs 35,895 crore as tax share and Rs 10,393 crore as grants. In 2023-2024, the budget size almost doubled to Rs 45,03,097 crore, but the State received only Rs 34,596 as tax share and Rs 13,005 crore as grants.

About the pending irrigation projects, the Chief Minister said Sitharaman in the previous budget announced Rs 5,300 crore for the Upper Bhadra Project, but the sanctions were not given for the project. “We have been requesting environmental clearance for Mahadayi project, and approval for the Mekedatu project. There was a stay against Upper Krishna Project. The Centre didn’t act on these requests either,” Siddaramaiah said.

The cess and surcharge paid by the State from 2014-2015 to 2023-2024 amounts to Rs 33,43,532 crore. The Centre has not given any share from this to the State, he said. Siddaramiah said the Centre did not pay GST compensation totalling Rs 59,274 crore to the State.

The Chief Minister also hit out at the Centre over the delay in drought compensation from the Centre. In 2019, when the floods hit the state, the Central government did not provide any compensation, Siddaramaiah claimed.

Reacting to Sitharaman's comments in Parliament that the protest by Congress leaders in Delhi is politically motivated and the government does not have money because of the guarantees, Siddaramaiah said, “She went to Centre from the State as Rajya Sabha member and she is rejecting all the recommendations benefitting the State.”