BENGALURU: Karnataka Chief Minister Siddaramaiah has called for greater devolution of funds from the Centre to address regional imbalances and the challenges of urbanization facing the state. Speaking at a meeting with Arvind Panagariya, Chairman of the 16th Finance Commission, and its members, Siddaramaiah highlighted the urgent financial needs of the state.
Siddaramaiah emphasized that Bengaluru requires an investment of Rs 55,586 crore over the next five years. Of this amount, the state has requested a grant of Rs 27,793 crore. He also mentioned that for the equitable development of the Kalyana Karnataka region, the state is investing Rs 25,000 crore and has requested a matching grant of Rs 25,000 crore over the same period.
Additionally, the Chief Minister requested a grant of Rs 10,000 crore for effective disaster mitigation and timely relief in the highly vulnerable Western Ghats region.
Siddaramaiah noted that Karnataka experienced a sharp reduction in its share of the 15th Finance Commission's award, decreasing from 4.713% to 3.647%. This cut resulted in a loss of Rs 68,275 crore during the five-year period from 2021 to 2026. Although the 15th Finance Commission recommended state-specific grants of Rs 11,495 crore to compensate for this loss, the Government of India has not accepted the recommendation. Consequently, Karnataka was deprived of these grants, leading to a total loss of Rs 79,770 crore during the 15th Finance Commission period.
The Chief Minister also pointed out that Karnataka has seen revenue transfers of Rs 35,000-40,000 crore per year to other states, amounting to 1.8% of its Gross State Domestic Product (GSDP) during the 15th Finance Commission period. "The figure is astounding because the net transfers outside of Karnataka amount to about 50 to 55 percent of the total revenues it generates," Siddaramaiah said. He criticized the disproportionate weightage given to equity, which, he argued, penalized Karnataka and similarly positioned states for their good fiscal and demographic performance.