Daijiworld Media Network - Bengaluru
Bengaluru, Mar 1: Chief minister Siddaramaiah has strongly criticized the union government’s move to further slash the state's tax revenue share, calling it an assault on federalism and a deliberate attempt to undermine states’ constitutional rights.
Referring to reports that the NDA government is planning to reduce Karnataka’s tax share from 41 per cent to 40 per cent through the Finance Commission, Siddaramaiah accused the Centre of systematically eroding state autonomy.
“The Finance Commission, which is meant to ensure a fair distribution of tax revenue, is now being misused to weaken states. This trend is alarming, forcing states into financial dependence on the Centre—a situation that is both undemocratic and unacceptable,” he stated.
Pointing out the disparity in tax allocation, Siddaramaiah revealed that Karnataka contributes nearly ?4 lakh crore annually to the central coffers but receives only 15 paise for every rupee collected. He highlighted the state’s financial losses due to the 15th Finance Commission’s decision to reduce Karnataka’s tax share from 4.713 per cent to 3.64 per cent, resulting in a staggering Rs 68,775 crore shortfall over five years.
Further, he accused the Union government of withholding crucial funds, including Rs 5,495 crore in special grants recommended by the Finance Commission and Rs 6,000 crore in centrally sponsored grants. He also pointed out reductions in grants for urban local bodies, Panchayat Raj institutions, health, and disaster response, leaving a cumulative Rs 3,300 crore unpaid.
Siddaramaiah demanded the immediate release of special grants for 2024-25 and 2025-26. He also urged the Centre to allow states to levy additional State GST (SGST) to offset revenue losses from GST implementation, instead of continuing to collect the GST Compensation Cess until 2026.
“The people of Karnataka have placed their trust in our government through our welfare programmes. However, the Union government appears intent on undermining our efforts by depriving us of our rightful tax share. But we are prepared to stand firm against such financial oppression,” he asserted.
Issuing a stern warning, Siddaramaiah stated that if the Centre refuses to reconsider its approach, Karnataka will not hesitate to launch mass protests. “If negotiations fail, we will take this fight to the streets, standing shoulder to shoulder with the people,” he declared.