Karnataka Chief Minister Siddaramaiah, presenting the state budget on Friday, February 16 blamed both the previous BJP-led state government and the Union government for causing financial losses to Karnataka. He accused the BJP government of failing to address "injustice" in the 15th Finance Commission report, leading to a loss of Rs 62,098 crore.
He said, “Due to the lackadaisical attitude of the previous government, the state had to suffer severe losses in the final report of the 15th Finance Commission. The change in the method of calculating state income and the use of the 2011 census instead of 1971 resulted in heavy losses to the progressive states. Rs 2,77,350 crore was to be received by the state if the allocation formula proposed by the 14th Finance Commission was continued. But the state received only Rs 2,15,253 crore. Therefore, it is estimated that during the six-year period of the 15th Finance Commission, the loss to the state under devolution of central taxes is estimated to be Rs 62,098 crore.” He also said that the previous government failed to secure Rs 11,495 crore in special grants for Bengaluru.
The criticism of the Union government led to the Opposition protesting, with BJP MLAs trying to disrupt the proceedings and shouting slogans. Even as BJP MLAs led by Leader of the Opposition R Ashok continued to disrupt the proceedings, Siddaramaiah announced proactive measures to counter such “injustices,” including the preparation of a detailed memorandum for the upcoming 16th Finance Commission to secure a fair share of central devolution and grants.
Siddaramaiah criticised the Union government for the unscientific implementation of GST, resulting in a loss of Rs 59,000 crore for the state. He said, “While introducing Goods and Services Tax, the Union government had assured that there would be a growth of 14% and states would be compensated in case of shortage in revenue growth. At a projected growth rate of 14%, it was estimated that the GST tax collection would be Rs 4,92,296 crore from 2017 to 2023-24. However, only Rs 3,26,764 crore GST revenue was collected and against the GST shortfall of Rs 1,65,532 crore, the Union government had released Rs 1,06,258 crore as compensation to the state. Hence, a loss of Rs 59,274 crore was incurred by the state due to unscientific implementation of GST in the last 7 years.”
He also added that Karnataka is the second-highest source of GST collections in the country with an 18% increase in the current financial year compared to the corresponding period in 2022-23.
Siddaramaiah also pointed out that cesses and surcharges collected by the Union government are increasing and the same is being not shared with the states. “The collection of cess and surcharges for the period 2023-24 has increased by 153% compared with that of 2017-18. If cesses and surcharges are shared with the states, a total of Rs 11,34,301 crore was available for devolution for all states. Due to the non-sharing of cesses and surcharges by the Union government, the state suffered a loss of Rs 45,322 crore in the last 7 years."