Karnataka tax cut in nation’s interest: C T Ravi

Tourism Minister C T Ravi on Thursday defended the cut in Karnataka’s share of Central taxes, saying it was “in the interest of the nation,” which enraged the Opposition Congress in the Legislative Assembly on Thursday.

“It’s true that the tax share has come down. But considering the per-capita income, it is in the interest of the nation that backward states are helped. It’s like taking from the rich and paying the poor,” Ravi said during a debate on the 2020-21 Budget. “So, while we have protested the injustice to Karnataka, it’s with good intentions and not any mischief that it has been done,” he added.

While the 14th Finance Commission had fixed 4.71% as Karnataka’s share in the divisible pool of Central taxes, the 15th Finance Commission has reduced the state’s share to 3.64% in its interim report. This means Karnataka will get Rs 11,215 crore less by way of tax devolution when compared with what it got in 2019-20.

Ravi’s argument irked the Congress. “Are you saying then that Gujarat is a backward state,” former minister Dinesh Gundu Rao asked. “You have admitted, then, that Karnataka is better than Gujarat,” he said, referring to Gujarat being Prime Minister Narendra Modi’s home state.

Chief Minister B S Yediyurappa also admitted that the tax cut was real. “Having said that, Karnataka got the highest (funds) for national highways in India,” he said. “There’s a slowdown globally that has impacted even the US. In my Budget speech and the Governor’s address, we have said this ourselves without hiding anything. I will explain how this can be rectified during my reply on the Budget debate.”