Karnataka CM Seeks 60% State Share in Divisible Pool

Bengaluru: Apart from highlighting the huge losses under 15^th Finance Commission to Karnataka to a tune of about Rs 79, 770 crore from 2021-26, Chief Minister on Thursday recommended to the 16^th Finance Commission the need for 60 percent of contribution of a State to the divisible pool, meant for distribution among States, should be given to that particular State itself.

In a meeting with the Chairman of the 16^th Finance Commission Dr Arvind Panagariya in Bengaluru, Chief Minister pointed out that Karnataka contributed about 8.4 percent to the national Gross Domestic Product and the State ranked 2^nd place in the country in total Goods and Services Tax contribution to the country. Thereby, Karnataka has been the centre to the country’s growth story.

Despite the State contribution in a big way to the country, Chief Minister stated for every rupee that Karnataka contributes, it gets back only 15 paise in return and he explained Karnataka made a contribution of Rs 4 lakh crore to the Gross Tax Revenue to the Union Government every year and the State gets back about Rs 45,000 crore in the form of devolution and about Rs 15,000 crore as grant-in-aid.

He brought to the notice of the 16^th Finance Commission over the drastic reduction in Karnataka’s share from the 15^th Finance Commission and from 2021-26, the State suffered a loss of Rs 68, 275 crore. Aware of the drastic cut to Karnataka, Siddaramaiah told the Finance Commission the 15^th Finance Commission recommended grants of Rs 11, 495 crore which was not accepted by the Union Government.

In all, he said, Karnataka was deprived of Rs 79, 770 crore during the 15^th Finance Commission and also brought to the notice of the 16^th Finance Commission that owing to non-sharing of Cesses and Surcharges from the divisible pool, Karnataka loss stood at Rs 53, 359 crore from 2017-18 to 2024-25.

“A larger proportion of the resources generated by economically advanced States should be shared with these States only,” suggested the Chief Minister. He stated Bengaluiru city alone needs an investment of Rs 55, 586 crore over the next five years and sought the 16^th Finance Commission to grant Rs 27, 793 crore.

Siddaramaiah said the State Government is investing Rs 25,000 crore for equitable development of Kalyana Karnataka districts and sought a matching grant of Rs 25,000 crore from the 16^th Finance Commission over the next five years.

A request was made to the Finance Commission by the Chief Minister asking for a grant of Rs 10,000 crore for effective disaster mitigation and timely relief and rehabilitation measures in the highly vulnerable region of Western Ghats.

Members of the 16^th Finance Commission-Ajay Narayan Jha, Annie George Mathew, Dr Manoj Panda and Dr Soumya Kanti Ghosh attended the meeting.