‘For every ₹1 we give, Karnataka gets only ₹0.15 back': Siddaramaiah seeks ₹1.15 lakh crore for Bengaluru
In a detailed meeting with Commission Chairman Arvind Panagariya, the chief minister flagged the fiscal disparity Karnataka faces, stating that despite contributing nearly 8.7% to India's GDP with only 5% of the population, the state receives disproportionately low returns from the Centre.
Also Read - Bengaluru climbs to 14th spot in Global Startup Ecosystem Rankings 2025
'For every rupee Karnataka contributes to union taxes, we receive just 15 paise in return,' Siddaramaiah said, calling the imbalance stark and deeply unjust. He added that the discussion with Panagariya was cordial, and the Commission appeared open to the state's demands.
The chief minister also drew attention to the state's reduced share in central funds under the 15th Finance Commission. Karnataka's share in tax devolution dropped from 4.71% to 3.64%, leading to an estimated loss of over ₹80,000 crore during the award period. Moreover, Karnataka's per capita devolution fell from 95% to just 73% of the national average between the 14th and 15th Finance Commissions.
In its formal submission, the state government called for a significant overhaul in the devolution formula. Karnataka urged the Commission to raise states' share of divisible taxes to at least 50%, cap cess and surcharges at 5%, and include the Centre's non-tax revenues in the divisible pool.
Siddaramaiah stressed that states are currently excluded from revenue earned through central cess and surcharges. 'If cess and surcharges exceed 5%, they should be brought into the divisible pool so that states can benefit,' he said.
Also Read - Bengaluru woman witnesses rare 'peaceful accident': 'No fights, just handshakes'
To ensure a fairer distribution among states, Karnataka proposed a model in which each state retains about 60% of its contribution to central taxes, while the remaining 40% supports less-developed regions — striking a balance between equity and incentivising performance.
The chief minister also criticised the current design of revenue deficit and state-specific grants. He cited Kerala's receipt of a ₹38,000 crore revenue deficit grant, while Karnataka received nothing under that head. He also questioned the denial of a ₹5,495 crore special grant recommended for Karnataka by the 15th Finance Commission but ultimately not sanctioned by the Union government.
To correct these imbalances, the state has suggested recalibrating the weight of the income-distance criterion — currently favouring poorer states — by reducing it by 20%, and reallocating that weight to reflect each state's contribution to the national GDP. This, Siddaramaiah argued, would ensure that economically productive states like Karnataka are rewarded rather than penalised.
He concluded by urging the Finance Commission to consider reforms that would make the devolution system more predictable, performance-based, and transparent — with a focus on both promoting national growth and addressing regional disparities.
Hashtags
Try Our AI Features
Explore what Daily8 AI can do for you:
Comments
No comments yet...
Related Articles
Time of India
an hour ago
- Time of India
Telangana BJP questions inflated estimates for Metro Phase-II
Hyderabad: alleged that the Congress govt, which has been blaming the Centre for not providing adequate financial support to Telangana, has failed to utilise funds allocated under centrally sponsored schemes (CCS) and has not implemented necessary reforms to secure additional funding. Tired of too many ads? go ad free now The party further stated that the Phase-II was not cleared due to its high cost estimates compared to similar Metro projects in other cities. Addressing a press conference at the BJP headquarters, the party's state official spokesperson, Sarangula Amarnath, said that the state govt is plagued by inefficiency and poor financial mismanagement. "The CAG report released on Friday clearly indicates that the state had already borrowed 37% of this year's budgeted estimates. Chief minister A Revanth Reddy is totally oblivious of the public finance system that governs various CCS and grants," he said. "Despite generous allocations under the Finance Commission devolution, CSS and one-off grants, large sums remain unutilised in single nodal agency (SNA) bank accounts. These funds often lapse due to the state's failure to provide matching shares or are withheld because mandatory conditions are not met. Between 2020-21 and 2024-25 (till Feb 2, 2025), the Centre released ₹78,859.87 crore to Telangana under various Central sponsored schemes. Yet the state reported significant unspent balances in SNA accounts," Amarnath said. Citing examples, he pointed out that ₹1,812 crore remained idle in SNA accounts at the end of last financial year, according to CAG findings. "Telangana is suffering significant losses in Central funding due to its failure to implement key reforms mandated by the Union govt, with the state forgoing an estimated ₹25,000 crore over five years and risking additional losses of ₹5,000 crore annually due to incomplete reform compliance in sectors such as the power sector, holding local bodies elections, matching share, not providing utilisation certificates and FRMB violations," the spokesperson said. Tired of too many ads? go ad free now On Metro Phase-II, Amarnath alleged that the Revanth Reddy govt had abnormally increased estimations for the project. "For instance, the estimated cost per km for the Hyderabad Metro Phase-II is Rs 318 crore, whereas the AP govt's estimation for Vijayawada city metro is just Rs 260 crore and for Visakhapatnam it is just Rs 248 crore per km," the BJP leader said. "For whose benefit are these inflated Metro Phase-II estimates? Who will pocket the 30% excess per km," he asked.
Time of India
an hour ago
- Time of India
Yathindra's comparison of CM Siddaramaiah with Krishnaraja Wadiyar kicks up row
Mysuru/Bengaluru: A political controversy erupted Saturday after Congress MLC Yathindra, son of chief minister , claimed the Congress govt led by his father had done more for Mysuru than Nalwadi Krishnaraja Wadiyar—the widely revered Maharaja of the erstwhile Mysore princely state. Tired of too many ads? go ad free now "If you look at the grants released by Siddaramaiah for Mysuru, no one else has ever done so much for it. The amount of development Nalwadi Krishnaraja Wadiyar has done for Mysuru, a matching grant has been released by the Congress govt led by Siddaramaiah for the city," Yathindra had said in Mysuru. The statement triggered strong backlash from the erstwhile royal family of Mysuru, opposition BJP functionaries, and others. While Siddaramaiah appeared to distance himself from the comparison, the remarks ignited sharp criticism. Mysuru MP and scion of the family, Yaduveer Krishnadatta Wadiyar said, "When someone gets power, it is meant for serving people. Coming to power is not a game. Whether it was Nalwadi Krishnaraja Wadiyar or the elected govts after independence of the country, all have had responsibilities towards the people. No one sets a target to outdo others. What is more important is that we have to live up to the expectations of people. " Senior Congressman-turned-independent MLC AH Vishwanath also condemned Yathindra's comparison, calling it arrogant. "The statement that Siddaramaiah's govt has done more work than Nalwadi Krishnaraja Wadiyar is the height of arrogance. Siddaramaiah calls himself bigger than former chief minister late Devaraj Urs and now his son terms his father towering over the Mysuru Maharaja. Tired of too many ads? go ad free now It seems arrogance is running in their blood. " Opposition leader in the legislative assembly, R Ashoka of BJP, dismissed the remark as a poor joke. "Can there be any comparison between Krishnaraja Wadiyar and Siddaramaiah? Siddaramaiah hops from one party to another for power. This comparison has no meaning at all." Ashoka also highlighted Krishnaraja Wadiyar's enduring legacy. "The Krishnaraja Sagar dam, improvements of the irrigation system, introduction of electricity in the state — a first in India — and the foundations for higher education and industrialisation were all achieved by the Maharaja. If there was anyone who worked towards social justice in Karnataka, it was the Mysuru Maharaja whereas Siddaramaiah is creating rift between castes," he said. Siddaramaiah avoided mentioning the late Maharaja and instead turned his attention to political rivals. "We have done more work than BJP. The saffron party has done nothing, but we have done more," he told the media at Arsikere in Hassan district, when asked about Yathindra's comments.
Time of India
an hour ago
- Time of India
Gujarat to host India's first offshore wind project for Rs 6,900 crore
Ahmedabad: At least a decade after the proposal was moved, India's first offshore wind project along the Gujarat coast is finally set to get wings. The Centre has approved the transmission infrastructure needed to evacuate 500 megawatts (MW) of power from the state's proposed offshore wind zone, according to the Union ministry of power. Central transmission utility, Powergrid, will develop the project under the regulated tariff mechanism at an estimated cost of Rs 6,900 crore. As per the implementation plan, the infrastructure is slated to be ready by March 2029. The power ministry, based on recommendations from the 20th meeting of the National Committee on Transmission (NCT), recently cleared the development of the associated transmission system for Phase 1 of the 500MW viability gap-funded offshore wind project located off Gujarat's coastline. This marks the first tangible step towards realising India's offshore wind energy plans. "The transmission system includes the establishment of an onshore pooling station at Mahuva, a 190-km 400kV transmission line connecting Mahuva to Vataman, and a Gujarat offshore sub-station. The offshore installation will be connected to the onshore grid via a 35-km subsea cable and a 10-km underground cable, completing a critical link between wind turbines in the Arabian Sea and the state grid," stated a power ministry official. by Taboola by Taboola Sponsored Links Sponsored Links Promoted Links Promoted Links You May Like Find out: this is how you clean your yoga mat! Kingdom Of Men Undo You Can Also Check: Ahmedabad AQI | Weather in Ahmedabad | Bank Holidays in Ahmedabad | Public Holidays in Ahmedabad In line with India's green energy ambitions of achieving 500GW of non-fossil fuel-based installed capacity by 2030, the state govt here has also set a target of 100GW of installed capacity by 2030, i.e., over the next five years. As of June 30, 2025, Gujarat's installed RE capacity touched 35,000MW. According to industry experts, this development is a turning point for India's offshore wind energy policy, first announced over a decade ago. Kunj Shah, chairman of the renewable committee at Assocham Gujarat state council, said, "Offshore wind energy has potential benefits." He noted that while power generation from wind can be intermittent due to unpredictable wind flow and direction, installing wind infrastructure 5 kilometres offshore may offer more consistent power and improved yield. There are currently challenges with grid infrastructure for renewable energy sources. In this context, offshore projects could provide a more reliable source of renewable energy. European countries are investing in similar projects and suggested that accelerating project implementation in Gujarat could assist the state in achieving its green energy targets. In fact, sources revealed that the Gujarat Urja Vikas Nigam Limited (GUVNL) has also set a target of investing Rs 1 lakh crore to set up robust transmission infrastructure in the state to be able to evacuate the green power the state's plants produce. Parallely, the centre has also cleared a slew of transmission projects in Gujarat to strengthen the evacuation framework for renewable energy zones (REZs) across the state.
