The CAG report's findings have brought to light a glaring discrepancy in the Centre's allocation of funds to Karnataka.
Published Jul 25, 2024 | 1:00 PM ⚊ Updated Jul 25, 2024 | 1:00 PM
CM Siddaramaiah & his cabinet colleague Krishna Byregowda meets PM Modi to seek drought relief funds for the State
The Karnataka Finance Audit Report of the Comptroller and Auditor General of India (CAG) for the fiscal year 2022-23 has pointed out that the Prime Minister Narendra Modi-led-Union government has failed to adhere to the recommendations of the 15th Finance Commission.
The CAG released its audit report for the fiscal year 2022-23 on Tuesday, 23 July. The government also tabled the report in the Assembly house on the same day.
In the report which is over 230-page long, the CAG report pointed out that the Union government has failed to release the grants to Karnataka as per the recommendations made in the second and final report for the fiscal year 2022-23 submitted by the Finance Commission to the centre.
The centre has failed to release nearly 30.5 percent of the recommended grants to Karnataka for the fiscal year 2022-23. The government did not release even a single rupee as health grant despite the recommendation of the finance commission.
It may also be noted that the Siddaramaiah government had staged a protest against the Modi government at Jantar Mantar at Delhi on 7 February, 2024, against the centre for not adhering to the recommendations of the finance commission and meting out fiscal disparity.
However, Union Finance Minister Nirmala Sitharaman had denied the accusations of fiscal disparity by the centre to Karnataka and had reiterated that there were no recommendations for the release of special grants to the state.
The CAG audit report for the fiscal year 2022-23 has revealed that the Union government failed to release a whopping 30.5 percent of the recommended grants to Karnataka, contrary to the recommendations of the 15th Finance Commission.
The CAG report’s findings have brought to light a glaring discrepancy in the Centre’s allocation of funds, sparking concerns over the impact on Karnataka’s finance and development.
According to the CAG report: “The second and final report of the 15th Finance Commission (FC) recommended ₹1,213 crore for the Urban Local Bodies (ULBs), and ₹2,463 crore for the Rural Local Bodies (RLBs) to empower local bodies. Further, the FC recommended ₹1,107 crore and ₹552 crore for the Disaster Risk Management (DRM) and Health grants, respectively, for Karnataka. These grants were recommended to be released for the fiscal year 2022-23,” mentioned in the report.
Pointing to the actual release, the CAG report said: “The centre released ₹2,093 crore for RLB, which is ₹369.45 crore less than the recommended amount. Likewise, the centre released only ₹737.70 crore for the ULB, falling short of the recommended amount by ₹485.30 crore.”
“With regard to the grants recommended for the State Disaster Risk Management Fund (SDRMF), the centre has released only ₹885.34 crore, which is short by ₹221.66 crore. The Union government did not release any grants for health despite the FC recommending to release ₹552 crore,” pointed out in the audit report.
With this, the government has failed to adhere to the recommendations of the 15th finance commission and did not release 30.5 percent of the total grants suggested for Karnataka.
The Modi-led Union government has partially implemented the Finance Commission’s recommendations, releasing only ₹3,715.89 crore out of the recommended ₹5,335 crore, with ₹1,619.11 crore still waiting for the release, for Karnataka.
It is also important to note that the government has also not released full amount recommended for the ULBs and RLBs for the fiscal year 201-22 to Karnataka. It released ₹2,375.5 crore against the recommendation of ₹2,377 crore for the RLBs.
Likewise, the centre released ₹890 crore against the recommendation of ₹1,171 crore, which is short by ₹281 crore. However, it released full amount suggested for SDRMF and Health. It may also be noted that Basavaraj Bommai-led-BJP government was at at helm in Karnataka during 2022-23 fiscal year.
ULBs and RLBs
CAG report said: “Out of the total grant recommended for RLBs, 40 percent was towards Basic grants and 60 per cent towards Tied Grants for sanitation and maintenance of Open Defecation Free (ODF) status (30 percent), supply of drinking water, rainwater harvesting and water recycling (30 percent).”
“The grants towards ULBs include grants for million plus cities and other than million plus cities. The grants for million plus cities are given in two instalments for air quality improvement and meeting service benchmarks. The grants for other than million plus cities are given in two equal parts, one as Basic Grant (grants that can be used for a variety of purposes) and another as Tied Grants (grants that are conditional and have specific uses) towards drinking water and solid waste management,” the report further pointed out.
“During 2022-23, there was a shortfall in grants of ₹369.45 crore and ₹485.30 crore under RLBs and ULBs respectively against the recommendations,” the CAG report added that the centre did not release the full grants for ULB/RLB.
As per the recommendation of 15th FC, the Disaster Mitigation along with Disaster Response is the State Disaster Risk Management Fund (SDRMF). For the fiscal year 2022-23, under State Disaster Response Funds, the allocation to the state was ₹1,107 crore with Rs 830 crore being the central share and ₹277 crore being the state’s share.
The state transferred ₹885.34 crore to the fund with ₹664 crore as union share and ₹221.34 crore as the state share during 2022-23. However, no amount was allocated under SDMF.
On anonymity, an official from the CAG office told South First: “SDMF did not receive any funds for the 2022-23 fiscal year since neither the central government nor the state government released the grants. The central government did not release the full grants to the state for the DRM because the previous year’s allocated amount remained unspent, and there were no clear guidelines for the SDMF.”
“The central government has issued guidelines for the SDMF this year. If the grants allocated for the previous year are not utilised, the central government will not release grants for the new fiscal year,” added the official.
Despite the 15th FC having recommending grants of ₹552 crore for the fiscal year 2022-23 for the Health Sector, the Union government did not release a single penny for the same. These grants for the health sector were meant at the RLB and ULB levels to support diagnostic infrastructure facilities in the Primary Health Care Centre and Public Health Centre.
And to provide infrastructure to sub centres, primary health centres and community health centres and for establishment of wellness centres etc.
(Edited by Neena)
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