K'taka facing fiscal stress as Central funds cut, says CM

Chief Minister Siddaramaiah on Sunday accused the Centre of reducing funds for Central schemes to Karnataka, forcing the state government to make good the shortfall from its own budget.

Speaking at the 3rd meeting of the NITI Aayog Governing Council here, the chief minister also flagged concerns over lack of provision in the Union budget for compensation to state governments for loss of revenue after the implementation of the Goods and Services Tax regime. Siddaramaiah accused the Centre of discriminating against Karnataka in allocation under the State Disaster Response Fund for 2015-20 which has been the lowest in the country despite high incidence of drought and greater frequency of flash floods.

“...our allocation for the above period is only Rs 1,375 crore, which is much less compared to allocation to the states like Rs 1,809 crore to Jharkhand, Rs 3,376 crore to Tamil Nadu, Rs 7,376 crore to Maharashtra, Rs 5,484 crore to Rajasthan, Rs 4,363 crore to Madhya Pradesh and Rs 3,504 crore to Gujarat,” he said.

The chief minister noted that Karnataka has been reeling under drought conditions for the last six years. “Even in the current year, 139 taluks during the kharif season and 160 taluks during the rabi season have been declared drought-affected,” he said.

Despite the challenges, the state government has been able to address the drought situation in an effective manner through innovative responses. Distribution of input subsidy directly into bank accounts of 12.03 lakh farmers, creating additional irrigation capacity, linking of farmers’ markets were some initiatives cited by the chief minister.

Siddaramaiah said the overall grants for major Centrally Sponsored Scheme decreased from Rs 10,826 crore in 2014-15 to Rs 8,502 crore in 2016-17. He said the sudden closure of the Central schemes such as Jawaharlal Nehru Urban Renewal Mission and Rajiv Awas Yojana have created severe fiscal stress on the state budget.

“Not only the Central share has been reduced, the actual grants received from the Centre under certain schemes have been even less than the reduced share over the last two years … I have had to therefore release an additional amount of Rs 1,185.62 crore from state budget to compensate for this shortfall,” Siddaramaiah said.