Chief minister Siddaramaiah announced on Monday that the state government, along with all MPs and MLAs, will protest in New Delhi on Wednesday against the “injustice” by the Centre to the state in tax devolution and grants-in-aid.
“On February 7, all the ministers, MPs and all MLAs of both the Houses are going to protest the Union government for the injustice caused to Karnataka state by the 15th Finance Commission and other issues, including grants from the Centre,” Siddaramaiah said, adding that the protest would be held at Jantar Mantar.
CM Siddaramaiah also urged MPs from Bharatiya Janata Party (BJP) in Karnataka to join them in the protest.
“The struggle is not between Congress and BJP or against the BJP. It is against the injustice caused to Karnataka,” the chief minister stated.
He pointed out the disparity faced by Karnataka, saying that during the 15th Finance Commission period, Karnataka incurred a significant loss of ₹1.87 lakh crore due to reduced tax devolution and non-distribution of certain funds collected by the Centre.
He lamented the decline in Karnataka’s share of taxes from 4.71% to 3.64% between the 14th and 15th Finance Commissions, resulting in a loss of ₹73,593 crore.
Despite being one of the top contributors to the central tax pool, Karnataka receives only a fraction of its due share, Siddaramaiah asserted.
“After Maharashtra, Karnataka ranks second in collection of taxes. The state contributes ₹4.30 lakh crore/year from all types of taxes, but, in turn, the state has been receiving only 12-13% of its share from the Centre,” the state chief rued.
During fiscal year 2023-24, the state received ₹50,257 crore from the Centre, with ₹13,005 crore allocated under the centrally sponsored schemes, according to the CM. Despite a doubling of the Centre’s budget from ₹24.42 lakh crore in 2018-19 to ₹45.46 lakh crore in 2023-24, the state’s share witnessed a decline from ₹51,157 crore to ₹50,257 crore within the same timeframe.
The state’s share in the Centre’s devolution of taxes declined from 2.2% in 2017-18 to 1.23% in 2024-25, the chief minister added.
Karnataka has been contributing ₹2.40 lakh crore through Income Tax and Corporate Tax, and ₹1.36 lakh crore in the form of GST to the central pool.
“Despite the assurance of paying compensation for the loss incurred due to the implementation of GST, the Centre stopped providing compensation in June 2022,” the state chief stated.
He also criticised Union finance minister Nirmala Sitharaman for rejecting recommendations for special grants and withholding promised funds for various state projects. Siddaramaiah further lashed out at the Centre’s refusal to grant environmental clearances for crucial water projects, exacerbating issues related to water scarcity and irrigation in the state. He expressed disappointment over the lack of relief funds from the Centre for drought-affected areas despite significant crop losses.
Further noting that the state government submitted a memorandum to the Centre regarding the severe drought situation in the state, Siddaramaiah said, the crop loss is to the tune of ₹35,000 crore, and Karnataka requested the Centre to release ₹17,901 crore from the National Disaster Response Fund (NDRF) but has not received any relief so far.
“After we submitted the memorandum to the government, the central team came to Karnataka, visited the affected areas, and submitted a report to the Centre, but so far, no meeting has been held by the Union government to look into the report submitted by the central team. So far, we have not received a single paisa from the Centre through NDRF,” he said.
The chief minister urged all the Karnataka legislators, regardless of the party affiliation, to join the protest, emphasising the non-partisan nature of the demonstration. Alleging that despite the opposition BJP having 27 MPs, including one independent and one from Janata Dal (Secular), on its side, “they have not opened their mouth” either in the Parliament or with the government. The chief minister said the ministers who are representing Karnataka in the National Democratic Alliance (NDA) government have also not spoken to Prime Minister Narendra Modi and home minister Amit Shah about the state’s concerns.
Reacting to this, Karnataka BJP president B Y Vijayendra criticised the Congress government on Monday over the allegedly worsening financial situation in the state and accused the Siddaramaiah administration of shirking its responsibility while “unnecessarily” blaming the BJP-led Centre for its woes.
“Is it not the responsibility of the state government to come to the rescue of the farmers during drought,” he asked.