Chief Minister of Karnataka Siddaramaiaha with chairman of 16. | Photographic credit:
To overcome the sharp imbalance when transferring funds to Karnataka from the center, the main Minister Siddaramaiah demanded on Friday to increase the share of taxes transferred to the states (vertical decentralization) to at least 50%, and resignation and surcharges in the 16th Financial Commission (FC).
He was also looking for support for investment of 1.15 GBP Lakh to strengthen Bengalur infrastructure, due to its main role in the Karnataka economy.
Bridging regional gaps
During the meeting with the 16th FC chairman Arvind Panagariya and the members of the panel in Nový Delhi, the main minister emphasized the need to bridge regional gaps in Kalyana Karnataka and Mallnad, which earn low incomes and have poor infrastructure.
The state recommended, including income without trade union tax sources into a divisible fund. To share funds between states (horizontal decentralization), Karnataka suggested that each state retained about 60% of what it contributes, with 40% going to less developed countries, which ensures growth and justice.
To make the pattern fairer, Karnataka proposed to reduce the weight of the distance criterion and bring more weight to the state’s economic contribution so that the states of high -performance are not penalized but encouraged.
In her memorandum to FC, Karnataka urged critical reforms to make the fiscal decentralization system more oriented to growth, predictable and fair.
Three key problems
The state emphasized three key problems, such as increasing differences in the decentralization of the chapel, the wrong design of grants with the income deficit and the unpredictable nature of grants specific to taxes.
The main minister said he contributed to the Karnataka for each Rupee of the Union, and in return only 15 Paise will receive. Reducing the share of Karnataka within the 15th FC from 4.713% to 3.647% led to a cumulative loss of over 80,000 crore during the period of granting.
Karnataka played a key role in Indian economic growth and contributed almost 8.7% of the national GDP with only 5% of the population. He ranked second in the collections of GST, he said.
A great decline in decentralization
Siddaramaiaha said that the decentralization of Karnataka dropped significantly to the head, from 95% to 73% of the national average between 14 and 15. Financial commissions, despite the increased GDP contribution.
While he noted that his own capital remained a key principle, he said he must be implemented by time -bound and focused results without disadvantageing states that show strong economic performance and healthy fiscal management. He said that the weight of income should be reduced by 20% and the same should be reworked to reflect the fiscal contribution of the states, measured by their share in the national GDP.
Mr. Siddaramaiah recommended to replace discretion special grants of allocations based on samples of 0.3% gross trade union income. However, if the Commission continues with such provisions, he repeated the request for grants for Bengaluru and other critical projects.
The main minister emphasized that growth and justice must coexist and that the strong Karnataka supported by the fair fiscal decentrality is essential for strong India. “Karnataka’s fiscal force falls national growth. It is time to ensure that growth is not penalized but rewarded. We call on the commission to accept a balanced, forward -looking approach to decentralization,” the main minister said.
The FC granting period begins 1 April 2026.
Published – June 13, 2025 21:28
