Terming the Karnataka government’s attack on the Centre on funding as “completely false and misleading”, Union Finance Minister Nirmala Sitharaman on Sunday said the devolution to the State and the Centre’s grants in aid had increased while GST compensation had been completely paid.
Providing data before the audience at a programme organised by Thinkers’ Forum here, she said the tax devolution under Prime Minister Narendra Modi government had increased by 258% or 3.5 times more than that during the UPA government and the Centre’s grants to Karnataka had increased by 273% or 3.7 times when compared with that during UPA government between 2004 and 2014.
“While in the period between 2004 and 2014, ₹81,795 crore had been released as part of tax devolution, ₹2.93 lakh crore has been released to Karnataka between 2014 and 2024. Similarly, grants in aid to Karnataka increased from ₹60,700 crore between 2004 and 2014, to ₹2.26 lakh crore between 2014 and 2024,” she said.
Urging the State government not to mislead people, she said: “Sometimes, the State received its share two months in advance so that it is not starved of money. Every penny due to Karnataka has been given and on time.” She said that though the Finance Commission had not recommended the Centre’s funding for infrastructure development, the Centre decided to provide interest-free loan for 50 years for infrastructure development. “Karnataka received ₹7,130 crore. So do they (Congress) acknowledge that what was received was not part of Finance Commission’s recommendation?”
On the Congress allegation that ₹5,495 crore recommended as special grants by the Finance Commission in its interim recommendation was not given to the State, Ms. Sitharaman said: “This is utterly false. The commission in its final recommendation did not have it.” She also accused the Congress of raising an issue when the Modi government agreed to devolve 41% of the shareable taxes as recommended by the 15th Finance Commission while the previous Finance Commissions had recommended far less and the Congress did not have any issues with them. While the 12th commission had recommended 30.5%, the 13th one had recommended 32%, she pointed out.
CM hits back
Meanwhile, responding to Ms. Sitharaman’s statement, Chief Minister Siddaramaiah said: “One expects the country’s Finance Minister to speak the truth. Unfortunately, she has been consistently denying the written word. The interim report of the 15th Finance Commission for 2020-21 sanctioned ₹6,764 crore for three States, viz Karnataka (₹5,495 crore), Telangana (₹723 crore) & Mizoram (₹546 crore). These grants were recommended not because of any special love for these States. These were recommended to ensure that no State received a lower share in devolution in absolute numbers than the previous year.” Taking to social media platform X, he said: “In the final report also the 15th FC recommended ₹6,000 crore for Karnataka, ₹3,000 crore for revival of waterbodies & ₹3,000 crore for the Peripheral Ring Road for Bengaluru. The Finance Ministry under Ms. Sitharaman refused to accept these two recommendations, thus denying the rightful share for Karnataka.” He said: “We are not asking for funds for our five guarantees. We have adequate provision for these in our Budget, thank you.”
Further, he said, “Since you don’t seem to have any faith or commitment to the federal polity enshrined in our Constitution, you don’t seem to understand the concept of rightful share of the States. Kannadigas demand their share. They are not begging.”
Nirmala says she will send Kannada version of Finance Commission’s recommendations to State
In Mysuru, without specifically mentioning the Congress government led by Chief Minister Siddaramaiah in Karnataka, Ms. Sitharaman on Sunday said she would send a Kannada version of the Finance Commission’s recommendations. “Tell me if the amount that is being claimed by the Karnataka government is part of the recommendation of the final report or not. If it is not part of the final report then how do I give it,” she asked, remarking that baseless and wrong interpretations are being given to confuse the minds of the people.
