K'taka CM seeks higher share in central tax pool

Karnataka chief minister Siddaramaiah on Friday pushed for a more equitable tax devolution system while urging the 16th Finance Commission to rectify what he described as a persistent imbalance in fiscal transfers from the Centre to states.

- Arun Dev

BENGALURU:

"Karnataka's fiscal strength fuels national growth. It is time to ensure that growth is not penalised but rewarded. We urge the commission to adopt a balanced, forward-looking approach to devolution," Siddaramaiah said during a meeting with commission chairman Arvind Panagariya and members in New Delhi to present Karnataka's views through an additional memorandum.

Highlighting Karnataka's contribution to the national economy, the chief minister pointed out that the state accounts for nearly 8.7% of India's GDP, despite representing only 5% of the country's population. It also ranks second in GST collections. "For every rupee Karnataka contributes to Union taxes, it receives only 15 paise in return," he pointed out.

Citing the reduction in the state's share of tax devolution by the 15th Finance Commission—from 4.713% to 3.647%, the CM said that it resulted in a cumulative loss of over ₹80,000 crore. Karnataka's per capita devolution, he added, has fallen from 95% of the national average during the 14th Finance Commission to just 73% under the 15th, even as the state's GDP contribution rose.