FM Nirmala Sitharaman agreed to look at tax devolution anomaly: CM Siddaramaiah

New Indian Express

8 hours ago

BENGALURU: Chief Minister Siddaramaiah on Tuesday said Union Finance Minister Nirmala Sitharaman promised to examine the state's proposals on tax devolution and to look at injustice meted out to the state under the 15th Finance Commission.
Siddaramaiah, after meeting the Finance Minister in Delhi, told reporters that he requested the Union Government adopt a pro-growth approach in tax devolution among states in the 16th Finance Commission. He appealed to Nirmala to include the state's proposals in the Centre's memorandum to the 16th Finance Commission.
Under the 15th Finance Commission, Karnataka's share in tax devolution declined from 4.713% to 3.647%, and the state was also not allocated Rs 11,495 crore in special grants, resulting in a total loss of Rs 80,000 crore during the award period, he CM told her.
'A major reason for this is the over-reliance on the income-distance criterion, which received 45% weightage under the 15th Finance Commission. Karnataka has requested the 16th Finance Commission that the weightage for income-distance should be reduced by 20 percentage points and reallocated to fiscal contribution, which is the state's share in national GDP,' he said.
'Horizontal devolution formula'
CM Siddaramaiah also requested to discontinue Revenue Deficit Grants in their current format, as they are against the principles of fiscal discipline as proposed in the FRBM framework. 'We have proposed that the same amount — which was 1.92% of Gross Union Receipts under the 15th Finance Commission — should be redistributed among all states using the horizontal devolution formula,' he said.
He sought Rs 1.15 lakh crore for Bengaluru and funds for Kalyana-Karnataka and Malnad regions.