Karnataka to GST Council: Share revenue with local bodies

The CM said that the State Government had taken note of the decline in gram panchayat revenue following the withdrawal of their power to levy taxes on industries by the Karnataka Industrial Areas Development Board (KIADB).

Chief Minister DK Shivakumar greets outgoing Governor Thaawarchand Gehlot in Lok Bhavan in Bengaluru on Wednesday. Taking to social media platform ‘X’, the CM said, “I expressed my gratitude for the cooperation he extended to the state’s administration during his tenure and for the contributions he made to the state’s progress. I wished him a future life filled with happiness, joy, and good health.” (Photo | @DKShivakumar, X)

BENGALURU: Chief Minister DK Shivakumar said that the Karnataka government would submit a proposal to the Goods and Services Tax (GST) Council to share GST revenue with rural and urban local bodies. He said the government would take necessary steps to improve the financial position of gram panchayats and further strengthen decentralised governance.

The CM said that the State Government had taken note of the decline in gram panchayat revenue following the withdrawal of their power to levy taxes on industries by the Karnataka Industrial Areas Development Board (KIADB). The law allows 30% of the property tax collected by the authority to be shared with gram panchayats. He directed officials to provide complete details of the property tax collected by the authority so far and the amount distributed to gram panchayats.

Speaking at a meeting of the Karnataka State Decentralisation Planning and Development Committee on Wednesday, the CM said a committee would be constituted under the chairmanship of the RDPR Minister Eshwar B Khandre to examine the recommendations of the Fifth State Finance Commission on fund allocation and administrative reforms.

As per the Fifth State Finance Commission report, the government has released Rs 1,261 crore to GPs, Rs 557 crore to TPs and Rs 183 crore to ZPs, he said. The CM said all necessary steps would be taken to ensure that urban local bodies function effectively and empower them as per the 74th Constitutional Amendment.

“Consultations would be held with experts from the National Law School of India University on suitable amendments to the relevant laws’’ he added.

Shivakumar also said urban local bodies should form and implement development plans through ward committees on the lines of gram sabhas. District, taluk and village-level planning committees have already been constituted. He directed them to meet once every three months and submit reports. He also said funds should be provided to establish planning management units at the district and taluk levels.

The CM further said the government had announced the ‘People’s Plan’ in the Budget to incorporate people’s needs and demands from the grassroots into the State Budget.