Sitharaman to Review Karnataka’s Rs 80,000 Cr Shortfall
CM Siddaramaiah meets Finance Minister in Delhi, seeks reversal of tax-share cut and restoration of lapsed special grants.
Union Finance Minister Nirmala Sitharaman has assured Karnataka Chief Minister Siddaramaiah that the Centre will examine the state’s key financial demands, including a sharp decline in tax devolution and the non-allocation of special grants.
In a meeting held in New Delhi on Tuesday, Siddaramaiah urged the Finance Minister to adopt a pro-growth approach in tax distribution under the upcoming 16th Finance Commission. He raised concerns over the reduction in Karnataka’s share of tax devolution—from 4.713 percent in the 14th Finance Commission to 3.674 percent in the 15th—resulting in a loss of nearly Rs 68,000 crore over five years.
He further pointed out that the Centre did not allocate Rs 5,495 crore in special grants due to the state, along with Rs 3,000 crore each for the Peripheral Ring Road project and rejuvenation of lakes in Bengaluru. These omissions, he said, pushed the total loss to around Rs 80,000 crore.
“Losing Rs 80,000 crore is no small matter. I’ve urged the Finance Minister to give it serious attention,” Siddaramaiah told reporters after the meeting.
He also highlighted Karnataka’s economic contribution—accounting for 8.7% of the country’s GDP despite having only 5% of the population—and noted that the state ranks second in GST collections after Maharashtra and third in overall GDP.
The CM expressed concern over deficit grants being extended to states like Kerala, Tamil Nadu, and Andhra Pradesh, which he claimed do not consistently adhere to fiscal discipline. He demanded that such grants be either provided to all revenue-deficit states or scrapped altogether.
Karnataka, once a revenue-surplus state, saw a dip in the last two years, but Siddaramaiah expressed confidence in regaining surplus status by next year.
