BENGALURU: Karnataka has suffered heavy revenue loss on account of the Finance Commission’s recommendations in the past, which needs to be challenged before the 16th Finance Commission, said Chief Minister Siddaramaiah on Saturday.
He added that “Karnataka’s share in tax devolution was reduced from 4.713 per cent under the 14th Finance Commission, to 3.647 per cent under the 15th Finance Commission”.Due to this, the state was not given adequate resources.
The CM was speaking at the national seminar on Fiscal Federalism: Challenges before the 16th Finance Commission, held by Ramaiah University of Applied Sciences (RUAS). He reiterated that Karnataka has experienced the biggest cut among the states, a reduction of 1.066 per cent. The current approach considers the income distance, as per which, Karnataka loses out due to the lower distance from the highest per capita income state.
“It is important to consider the fact that high per capita income levels arise mainly from the Bengaluru Urban district at Rs 6,21,131. This approach has deprived Karnataka of adequate resource transfers to address the low per capita income of certain districts, such as Belagavi, that have only per capita income of Rs 1,24,998,” Siddaramaiah said, urging the Finance Commission to make necessary adjustments for the intra-state per capita income differentials, while arriving at the income distance in making the recommendations.
Highlighting Bengaluru’s contribution in taxes, the CM stated that it is rather “ironic that the second highest tax paying state in the country does not get adequate reward for its contribution”. He added that the state should be incentivised for its efficiency and fiscal performance and suggested that the commission should focus on the equity concerns of states.
The CM also spoke about the glaring imbalances in human development with Bengaluru Urban sharing the first position in the HDI value of 0.738.