Karnataka CM Siddaramaiah Calls for Cess and Surcharge Cap by Finance Commission

Karnataka Chief Minister Siddaramaiah urged the 16th Finance Commission to cap cesses and surcharges at 5% of gross tax revenue and recommended that anything above this threshold be included in the divisible pool. He also emphasized the need for greater financial devolution to economically advanced states like Karnataka.

Chief Minister Siddaramaiah of Karnataka has urged the 16th Finance Commission to cap cesses and surcharges at five per cent of gross tax revenue. He has recommended that any amount exceeding this cap should be included in the divisible pool of resources.

Addressing Chairman Arvind Panagariya and other Commission members, Siddaramaiah stressed that economically advanced states like Karnataka should not be penalised for their efficient performance. He emphasized that vertical devolution should be at least 50 percent of the divisible pool to ensure fair distribution of resources.

Siddaramaiah highlighted the financial implications for Karnataka, noting a significant loss due to non-sharing of cesses and surcharges. He called for greater devolution and stressed the importance of addressing financial imbalances, particularly in regions like Kalyana Karnataka and Bengaluru.

(With inputs from agencies.)