CM Siddaramaiah says Karnataka lost over ₹45,000 crore in 4 years due to Centre’s injustice in tax devolution

He also claimed that the taxes paid by Kannadigas were not useful for the state's difficult times, and the money was going to northern states.

BySouth First Desk

Published Feb 05, 2024 | 12:05 PMUpdatedFeb 05, 2024 | 7:14 PM

Karnataka CM Siddaramaiah

Alleging injustice to Karnataka by the Union government with a reduction in tax devolution, Chief Minister Siddaramaiah said it has resulted in a loss of over ₹45,000 crore to the state in the past four years.

He also claimed that the taxes paid by Kannadigas were not useful for the state’s difficult times, and the money was going to the northern states.

“Karnataka has faced significant challenges with a reduced tax devolution share post the 15th Finance Commission, resulting in a loss of over ₹45,000 crore in the last 4 years. This injustice cannot stand,” Siddaramaiah said on Sunday, 4 January.

“We stand united in demanding fair treatment and justice for Kannadigas to secure our state’s welfare,” he said on X, with the hashtag “#SouthTaxMovement”.

The chief minister’s comments come ahead of as all Congress lawmakers (also MPs) from the state, including Siddaramaiah, will be staging a protest in New Delhi on Wednesday, 7 February, against the “injustice” to Karnataka by the Union government when it comes to tax devolution and grants-in-aid.

Further extending support to campaigns on social media condemning the “injustice” being done to Karnataka by the Union government in tax devolution, the chief minister said, “The taxes paid by Kannadigas are not useful for our difficult times and it (money) is going to the northern states.”

“The northern states, which are indebted to taxes paid by southern states, can never be a model for us. Everyone should get over this false idea. Karnataka, which is building a strong nation with hard work, is a model for India,” he said.

Thanking the people of the state who raised their voices for justice, he said, adding “I am with you, if all our voices are united, it will be heard till Delhi.”

Union Budget 2024: TN welfare neglected, says Chief Minister MK Stalin

Call for protest

Karnataka’s Deputy Chief Minister DK Shivakumar said all Congress MLAs, MLCs, and MPs from the state would protest over the unjust distribution of funds in Delhi on 7 February.

Highlighting a significant financial disparity, Shivakumar asserted that Karnataka suffered a loss of ₹62,000 crore in the past five years due to what he termed the Centre’s “stepmotherly policy”.

Shivakumar, who is also the Congress’s Karnataka unit president, said that the party’s elected representatives from the state would protest against the Narendra Modi-led Union government over inadequate share of funds.

“Karnataka has contributed ₹4 lakh crore as part of GST but has received only ₹50,000 crore. 136 Congress MLAs, including ministers, two independent MLAs supporting us, all MLCs and MPs will protest against this injustice in Delhi on 7 February,” Shivakumar told reporters on  1 February.

“We have written a letter to the Centre regarding seeking permission for the protest. We will stage a protest at the permitted place. Protesting is our fundamental right in a democratic system. I request the Opposition MPs and MLAs to participate in this protest, which will be attended by Congress MPs,” urged Shivakumar.

Related: DK Suresh walks back ‘separate country’ after backlash

DK Suresh’s comments

Speaking to reporters outside Parliament in New Delhi after Finance Minister Nirmala Sitharaman’s interim Budget presentation on 1 February, Lok Sabha MP DK Suresh said the southern states were being subjected to injustice.

“We are witnessing it in every sector. We are witnessing our share (of GST and direct taxes) being provided to the North Indian states,” he said.

Suresh reiterated that the Centre has been meting out injustice at every stage to the southern states.

“If we won’t condemn this in the coming days, we will be compelled to demand a separate country (for southern states). I believe that the people from the Hindi region are imposing themselves on us,” Suresh added.

Pointing out the distribution of finances, he said, “Our states’ money is being given more to the northern states.” He added that Hindi was being imposed in the South.

Suresh walked back on his comments after they led to quite some furore from different quarters.

Leaders from Karnataka have pointed out how for every ₹1 contributed by Uttar Pradesh, it receives ₹1.79 back from central taxes.

For every ₹1 of tax contributed by Karnataka, the state receives only ₹0.47.

Recently, the southern states, especially Karnataka, have expressed discontent over the Centre sidelining the recommendations of the 15th Finance Commission, pendency in tax compensation, unscientific tax devolution system and delay in providing grants for centrally-sponsored schemes.

(With PTI inputs)