Karnataka CM alleged that Sitharaman's misleading statements ultimately reveal that the Centre has provided minimal support to the state.
Published Jul 29, 2024 | 10:10 PM ⚊ Updated Jul 29, 2024 | 10:10 PM
Karnataka CM Siddaramaiah and Union Finance Minister Nirmala Sitharaman
Karnataka Chief Minister Siddaramaiah, on Monday, 29 July asserted that it is dangerous for Nirmala Sitharaman to be the Finance Minister without basic budgetary knowledge.
The CM urged Prime Minister Narendra Modi to immediately remove Nirmala Sitharaman from the cabinet, emphasising that entrusting the finance portfolio to someone lacking fundamental understanding of finance is a highly risky decision.
During a press conference on Sunday, 28 July Chief Minister Siddaramaiah criticised Nirmala Sitharaman for her desperate attempts to cover up the injustices done to Karnataka by the Narendra Modi government.
He alleged that Sitharaman’s misleading statements ultimately reveal that the central government has provided minimal support to Karnataka. According to Sitharaman, the previous UPA government (2004-2014) granted Karnataka ₹60,779 crore, whereas the NDA government (2014-2024) provided ₹2,36,955 crore.
However, they have forgotten to mention how much the central government’s budget size has increased over the past ten years. Whether this omission is due to ignorance or a deliberate attempt to mislead the public needs to be clarified, he said.
In 2013-14, the central government’s budget was ₹16.06 lakh crore. At that time, Karnataka received ₹16,428 crore as grants and ₹15,005 crore as tax share, totaling ₹31,483 crore, which accounted for 1.9 percent of the total budget.
In 2024-25, the central government’s budget size is ₹48.02 lakh crore. During this period, Karnataka will receive ₹15,229 crore as grants and ₹44,485 crore as the tax share, totaling 1.2 percent of the budget. If Karnataka were to receive the same 1.9 percent share as in 2013-14, the state would get ₹91,580 crore. Due to the unfair treatment by the Narendra Modi government, Karnataka has lost ₹31,866 crore for 2024-25.
Finance Minister Nirmala Sitharaman has made misleading statements claiming an increase in Karnataka’s tax share from the central government. According to her, Karnataka received ₹81,791 crore during the UPA government and ₹2.9 lakh crore during the NDA government (2014-2024), the CM said.
However, the 14th Finance Commission set Karnataka’s tax share at 4.72 percent which the 15th Finance Commission reduced to 3.64 percentage, resulting in an estimated loss of ₹62,098 crore in the tax share alone over the past five years. Sitharaman has attempted to conceal this significant reduction. Grant in aids for 2024-25 is still less than that we received in 2013-14 under UPA, the CM alleged.
Karnataka ranks second in the country for GST collection and first for GST growth at 17 percent. Despite this, the state receives only 52 percent of the collected GST funds. Due to the unscientific implementation of GST, Karnataka lost about ₹59,274 crore from 2017-18 to 2023-24. In 2023-24, the central government collected over ₹4.30 lakh crore from Karnataka in taxes, cesses, and surcharges, but returned only ₹50-53,000 crore, equating to just ₹12-13 for every ₹100 collected, including ₹37,000 crore in tax share and ₹13,005 crore for central-sponsored schemes, Siddaramaiah explained.
Over the past six years, the central government’s budget has nearly doubled. In 2018-19, the budget was ₹24,42,213 crore, with Karnataka receiving ₹46,288 crore. By 2023-24, the budget grew to ₹45,03,097 crore, but Karnataka received only ₹50,257 crore. Despite the budget doubling, Karnataka’s share remained unchanged.
After recognising the significant injustice done to Karnataka, the 15th Finance Commission recommended a special grant of ₹5,495 crore for the state. However, this recommendation was rejected by Finance Minister Nirmala Sitharaman, who is a representative from Karnataka. As a result, Karnataka did not receive the recommended funds.
Due to the central government’s discriminatory policies, Karnataka has been deprived of its rightful share of ₹1,87,867 crore from 2017-18 to the present. This amount is more than half of Karnataka’s revised budget size of ₹3.24 lakh crore. Specifically, it equates to 57% of the current fiscal year’s (2024-25) budget. This significant financial loss has occurred since the BJP-led central government took power.
Additionally, the 15th Finance Commission recommended ₹3,000 crore for Bengaluru’s Peripheral Ring Road and ₹3,000 crore for water resource development, including lakes. However, Finance Minister Nirmala Sitharaman rejected these recommendations, resulting in a loss of approximately ₹11,495 crore for the state.
Over the past ten years, Prime Minister Narendra Modi and Finance Minister Nirmala Sitharaman have unjustly allocated taxes and grants to states governed by opposition parties. It is ironic that Nirmala Sitharaman, who was elected to the Rajya Sabha by Karnataka, has acted against the state’s interests. Given her actions, she lacks the moral authority to speak about Karnataka’s financial status, he said.
(Edited by Neena)
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