Karnataka Chief Minister Urges Finance Commission for Balanced Equity

Karnataka Chief Minister Siddaramaiah argued that economically advanced states should support poorer ones without compromising their own economic efficiency. He highlighted the penalties faced by high-performing states due to the current emphasis on equity and advocated for a more balanced approach in resource distribution by the 16th Finance Commission.

In a critical address to the 16th Finance Commission, Karnataka Chief Minister Siddaramaiah emphasized the need for a balanced approach to equity and efficiency in resource distribution. He warned that the current strategy of prioritizing poorer states could undermine the economic well-being of advanced states like Karnataka.

Siddaramaiah pointed out that Karnataka and similar states have been unjustly penalized for their strong fiscal and demographic performance due to the previous commission's policies. This has been exacerbated by the Union Government's increasing reliance on cesses and surcharges, which are not shared with states, resulting in significant revenue losses.

The Chief Minister urged the Finance Commission to ensure a more equitable resource allocation that rewards efficiency and performance. He called for a Constitutional amendment to include all non-tax revenues in the divisible pool of taxes and recommended that 60% of a state's contribution to this pool should be returned to it. Highlighting Karnataka's substantial contributions to national GDP and GST, Siddaramaiah stressed the need for greater financial devolution to address regional imbalances and urban challenges.

(With inputs from agencies.)