16th Finance Commission meet in Delhi today; Karnataka CM to raise tax devolution
BENGALURU: Chief Minister Siddaramaiah, who had recently skipped a crucial meeting of the Niti Aayog on May 24, will meet the 16th Finance Commission in New Delhi on Friday.
The CM will pitch for change in criteria for the devolution of funds from the Centre to the State. He held talks with the top brass of the Finance Department on Wednesday.
According to sources, the CM will appeal to the Commission to recommend restoration of the State's share of 4.713 per cent, which was reduced to 3.647 per cent in the 15th Finance Commission, causing a loss to the tune of Rs 79,770 crore for a period between 2021-2026. Even as the Commission had recommended a state-specific grant of Rs 11,495 crore, including for the peripheral ring road and development of tanks in Bengaluru, the Centre did not release the funds.
Siddarmaiah may take up this issue with the Commission and urge that instead of recommending the state-specific grants, recommend grants based on tax collection efforts, in particular the GST, of the State.
During the Commission's visit to Karnataka, the CM had presented a memorandum urging the Centre to share the cess and surcharges with the State by bringing them into the divisible pool. Siddaramaiah would insist that the Centre scrap the policy of revenue deficit grants to the States, those that present deficit budgets, according to a source.
Karnataka had reportedly sought higher weightage for the 'efficiency criteria over the equity criteria' in its presentation before the 16th Finance Commission panel. While equity criteria have income distribution, population, and area among others, the efficiency criteria have demographic performance and tax collection effort.
Karnataka has also sought inclusion of the State's contribution to the GDP in the efficiency criteria while deciding on the devolution of funds to states.
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