K’taka seeks fund allocation from 15th Finance panel

Karnataka Chief Minister HD Kumaraswamy on Tuesday pitched for a higher share in the devolution of funds from the Centre, pointing out “injustice” that had been meted out in the past.

Kumaraswamy said this during his meeting with the 15th Finance Commission headed by NK Singh, which is on a visit to Karnataka.

Kumaraswamy asked the Finance Commission to set right the disparity in the allocation of drought relief funds. “Injustice has been done to Karnataka in terms of allocation under the State/National Disaster Relief. This is not only in terms of the amount being allocated to the state, but also by comparison to allocation for other states,” he said. “Keeping in view the severe and recurring drought in the state, there’s an urgent need for the Finance Commission to substantially increase the allocation for the state,” he added.

The government also told the Finance Commission that the Centre should not cut funds for Centrally-sponsored schemes. “We have seen that in the last four years, while the 14th Finance Commission increased devolution to states from 32% to 42%, the Centre reduced its share in Centrally-sponsored schemes. As a result, most of the additional money received under the devolution formula had to be allocated towards the state’s share of the Centrally-sponsored schemes,” Kumaraswamy said.

Kumaraswamy reiterated the government’s demand for a 5-year extension for the state to continue receiving compensation under the GST.

Loss of revenue to the states on account of implementation of GST will be paid by the Centre during the transition period of five years till 2021-22, according to the provisions of the GST (Compensations to States) Act, 2017.

“The tax rates in Karnataka were much higher and on account of reduced rates under GST, the actual tax collection has been adversely affected. I request the Finance Commission to recommend to the Centre to continue GST compensation for another five years beyond 2022,” Kumaraswamy said.