Karnataka Chief Minister Siddaramaiah has taken a strong stand against the Central Government and the Bharatiya Janata Party (BJP), calling the recent Goods and Services Tax (GST) allocations a “betrayal” of the people of Karnataka. The CM expressed his disappointment over the meager allocation of funds despite Karnataka’s substantial contributions to the national economy.
Here’s a detailed look into the controversy surrounding the GST allocation and the Chief Minister’s fiery remarks.
Karnataka’s Contributions vs. Allocations
According to Siddaramaiah, Karnataka contributes a remarkable ₹4.5 lakh crore annually to the national exchequer. Despite this, the state received only ₹45,000 crore in tax share and ₹15,000 crore in grants in the Union Budget for 2024-25. This equates to a mere 13 paise for every rupee contributed by the state.
- Population vs. GDP Contribution:
Karnataka accounts for just 5% of India’s population but contributes 8.4% to the nation’s GDP. - GST Growth Leader:
Karnataka ranks second in GST collections and leads the country in GST growth with a 17% increase. - Budget Expansion Without Proportionate Growth in State Allocation:
The Union Budget has nearly doubled from ₹24.42 lakh crore in 2018-19 to ₹48.20 lakh crore in 2024-25. However, Karnataka’s share has stagnated, highlighting a disparity in fund distribution.
Concerns Over Declining Tax Share
The CM drew attention to the declining tax share allocated to Karnataka:
- 2018-19 Allocation: ₹46,288 crore
- 2024-25 Allocation: ₹44,485 crore (₹1,803 crore lower despite increased contributions).
Siddaramaiah termed this as an unjust allocation and a failure to recognize Karnataka’s achievements in governance and economic growth.
Comparison With Other States
The Chief Minister also highlighted discrepancies in the allocation of funds to other states:
- Uttar Pradesh: ₹31,039 crore
- Bihar: ₹17,403 crore
- Madhya Pradesh: ₹13,582 crore
- Rajasthan: ₹10,426 crore
Siddaramaiah questioned whether Karnataka is being penalized for excelling in governance and economic contributions, especially when other states with documented governance issues received significantly higher allocations.
Allegations and Counterclaims
Siddaramaiah accused the BJP of neglecting Karnataka while using its tax revenues to bolster development in BJP-ruled states like Uttar Pradesh and Bihar. He criticized the BJP leaders in Karnataka for their silence, calling it a betrayal of the state’s people.
In response, the Centre refuted Siddaramaiah’s allegations, asserting that the Finance Ministry is not responsible for the perceived shortcomings of the Karnataka government. The Centre also denied the CM’s claim that the 15th Finance Commission reduced Karnataka’s tax share from 4.713% to 3.647%, which Siddaramaiah argued led to a loss of ₹79,770 crore over five years.
Is Karnataka Being Penalized for Success?
Siddaramaiah’s remarks highlight a critical question:
“Is Karnataka being punished for its excellence in governance, GST growth, and development?”
He pointed out that despite its leadership in GST collections and GDP contribution, the state struggles with limited resources to address challenges like floods, droughts, and infrastructure needs.
“As the nation celebrates Sankranti, Karnataka is left to fend for itself while our tax money builds the coffers of BJP leaders in other states,” the CM said.
Future Implications
The ongoing debate raises broader concerns about the fairness and transparency of GST fund allocations. Siddaramaiah’s criticism has sparked conversations about the need for equitable distribution of resources, particularly for states that significantly contribute to the national economy.
FAQs
Why did CM Siddaramaiah criticize the Centre?
Siddaramaiah criticized the Centre for allocating only ₹45,000 crore in tax share and ₹15,000 crore in grants, despite Karnataka’s substantial economic contributions.
What is Karnataka’s contribution to the national GDP?
Karnataka contributes 8.4% to India’s GDP while representing only 5% of the country’s population.
How does Karnataka rank in GST growth and collection?
Karnataka ranks second in GST collection and leads the nation in GST growth with a 17% increase.
How has Karnataka’s tax share changed over the years?
Karnataka’s tax share declined from ₹46,288 crore in 2018-19 to ₹44,485 crore in 2024-25, despite its increasing contributions to the exchequer.
How does Karnataka’s allocation compare to other states?
States like Uttar Pradesh, Bihar, and Madhya Pradesh received higher allocations, despite Karnataka’s leadership in economic and governance performance.
What did Siddaramaiah say about BJP leaders in Karnataka?
Siddaramaiah criticized BJP leaders in Karnataka for their silence on the issue, calling it a betrayal of the state’s people.
What was the Centre’s response to Siddaramaiah’s allegations?
The Centre refuted the claims, stating that the Finance Ministry was not responsible for the perceived disparities in fund allocation.
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