Karnataka Chief Minister Siddaramaiah has hit out at the Central government over the release of funds for the state, saying that the dwindling grants-in-aid and the glaring absence of budgeted funds raise the question of whether the autonomy of the Finance Commission is merely a ‘facade’ under the BJP.
Karnataka CM, who also announced a protest against the BJP-led centre on Wednesday, said that the demonstration is not a political one but an attempt to’ safeguard the interest’ of the state.
“FM @nsitharaman, in the Parliament today, asserts the sanctity of the Finance Commission’s recommendations. But, the NITI Aayog CEO’s revelations about @narendramodi’s attempts to sway the Commission, paint a different picture. The rejection of ₹5,495 cr in special grants for Karnataka, despite the Commission’s advice, the dwindling grants-in-aid, and the glaring absence of budgeted funds such as the ₹5,300 cr for the Upper Bhadra project, all lead to the question: Is the Finance Commission’s autonomy merely a facade under @BJP4India?” Siddaramaiah said in a post on X.
He also invited all party leaders to join the protest called by the Karnataka government and said that the Congress government wants to ensure that our concerns are heard by the Union government.
“I invite @BJP4Karnataka MPs, MLAs and leaders to join during the protest to raise our voice for the State’s Rights. We are staging protest at New Delhi’s Jantar Mantar on February 7 to safeguard the interests of the state. We are committed to honouring the trust and opportunity bestowed upon us by the citizens of the state. We anticipated that the Union government would adhere to the principles of the federal system, and we have been awaiting the fulfilment of the commitments made in last year’s budget. The state government is inviting all parties to join the protest to demand justice for Kannadigas. We are protesting to ensure that our concerns are heard by the Union Government,” he added.
He also claimed that the Union Government had announced to provide ₹5,300 crores to the Upper Bhadra scheme in the last year’s budget, but the Centre has not released a single rupee so far.
“They have not released anything for drought relief either,” he said, adding, “This is not a political protest by the Congress Party against the BJP. We are protesting to highlight the unfair treatment by the Union Government, urging all Indians to take notice of this injustice.”
Siddaramaiah further said that under the 14th Finance Commission (2015-2020), Karnataka received 4.71 per cent of the tax share, which was reduced to 3.64 per cent by the 15th Finance Commission (2020-2025).
“This 1.07 per cent decrease resulted in an estimated loss of ₹62,098 crore for Karnataka over five years. To compensate, the 15th Finance Commission recommended a special grant of ₹5,495 crore for Karnataka in the interim budget, which Finance Minister Nirmala Sitharaman subsequently declined,” he added.
“Additionally, there were recommendations for ₹3,000 crore each for lake and water body development and peripheral ring road projects. Altogether, Karnataka missed out on a total of ₹73,593 crore,” he further said.
Criticising the Union government over the implementation of GST, the Karnataka CM said, “Despite our criticism that GST was unscientific, the Union government went ahead with its implementation. Before GST, our state’s tax collection growth was 15 per cent. The Union Government promised that GST would not only increase tax revenues and central grants but also offer assurances of compensation for any potential losses. However, this compensation was discontinued in June 2022, after just five years. This cessation has significantly impacted our ability to achieve a 15 per cent tax collection growth rate again. We have appealed for the continuation of this compensation, but the Centre has yet to make a decision on this matter. As a result, we continue to face unjust treatment under the GST regime.”
Karnataka, the second-highest tax collector after Maharashtra, contributes a significant ₹4,30,000 crore in tax revenue, the Karnataka CM said, adding that the state, however, receives only around ₹12-13 out of every ₹100 in taxes, with the rest held by the Union Government.
“In 2017-18, with a Union Budget of ₹21,46,735 crore, Karnataka received ₹31,908 crore in tax devolution and grants totalling ₹47,990 crore. In 2018-19, with a budget size of ₹24,42,213 crore, the state received ₹51,157 crore ( ₹36,215 crore in tax devolution ₹14,942 crore in grants). In 2019-20, with a budget size of ₹27,86,349 crore, Karnataka received ₹54,814 crore, including ₹39,806 crore in tax devolution and ₹15,008 crore in grants,” he said.
In 2023-24, the Union Budget is ₹45,03,097 crore, and Karnataka’s share is only ₹50,257 crore, comprising ₹37,252 crore in tax share and ₹13,005 crore in grants, he added.
“The devolution rate has decreased from 2.2 per cent in 2017-18 to 1.2 per cent in 2024-25. This consistent decline in the state’s share highlights a growing injustice towards Karnataka,” Siddaramaiah said.
He further said that the Centre had previously announced a grant of ₹5,300 crore for the Upper Bhadra Project, which was included as part of the irrigation project grants in Basavaraj Bommai’s Budget, but the state has not received any funding in this regard
“This project is crucial as it provides water to an extensive area of 2.5 lakh hectares. However, despite these announcements, we have not received any funding in this regard, and I strongly urge its release without further delay,” he said.