Taking the Karnataka government’s recent protest in Delhi against alleged injustice by the Centre in the devolution of funds to the next level, the Legislative Assembly on Thursday adopted a resolution condemning what it called the “stepmotherly attitude of the Centre which is destroying the State’s economy by causing huge financial losses by denying it the rightful share of taxes, Central funds, and drought as well as flood relief”.
The resolution was adopted by a voice vote amid vociferous dharna by the Opposition members who tore off copies of the resolution.
The resolution, which was tabled by Law and Parliamentary Affairs Minister H.K. Patil, said, “Karnataka has suffered a huge cumulative loss of ₹ 1,87,867 crore from 2017-18 due to unscientific GST system, cheating in its tax share by the Centre through increase in cess and surcharges, failure to provide special allocation as recommended by the 15th Finance Commission and 23% reduction in allocation to the State by the 15th Finance Commission.”
The resolution said that it was a matter of concern that the Centre had not given even a single paisa from the Disaster Relief Fund for handling drought and floods though it had statutory backing.
The resolution further said, “In the last decade, ever since the BJP-led NDA came to power at the Centre, people of Karnataka have noticed several instances of injustice and bias in releasing grants recommended by the Finance Commissions and the Central share of drought relief as per norms and granting development projects.”
It observed that “failure of the Centre to follow principles of minimum natural justice that it should not cause injustice to the well-developed States along with the concept of providing more allocation to the poor and underdeveloped States has delivered a serious blow to development of progressive States like Karnataka.”
It alleged that Karnataka had lost its tax share of ₹62,098 crore as the 15th Finance Commission had reduced its share by 1.066%. It accused the 15th Finance Commission of meting out serious injustice to a progressive State like Karnataka by following unscientific norms though the State had taken strict measures to control population besides ensuring disciplined financial management.
‘Unscientific’ GST
Accusing the Centre of enforcing the GST under a one-nation, one-tax system in an unscientific manner and without an efficient tax policy, the resolution alleged that the total tax collection in the country which stood at around ₹6.47 lakh crore earlier had crashed to a level of just ₹2.5 lakh crore after the introduction of the GST. Karnataka too had seen a reduction of 30% in its tax collection while the Centre’s assurance of the GST regime boosting the revenues still remains an illusion, it noted.
Karnataka had seen a drastic cut even in the Centrally sponsored projects, it alleged while pointing out that as against the expected level of ₹1 lakh crore, the State’s actual allocation from the Centre for the Centrally sponsored projects was below ₹50,000 crore, it said.
It accused the Centre of trying to increase its resources through cess and surcharges as they were not being allocated to States by the Finance Commissions. This was evident with the annual cess and surcharge collections increasing from ₹1.41 lakh crore during the UPA regime to ₹5.53 lakh crore now, the resolution said.
