Karnataka Urges Fair Tax Share: CM Siddaramaiah Appeals to Finance Commission
Karnataka's Chief Minister, Siddaramaiah, has made a strong appeal to the 16th Finance Commission, advocating for a balanced and equitable approach to tax devolution. In a meeting held on Friday with the Commission's Chairman, Dr. Arvind Panagariya, and its members, Siddaramaiah highlighted Karnataka's significant contribution to the nation's economy and argued for a fair share of central taxes.
The meeting, held in Bengaluru, focused on Karnataka's specific needs and concerns regarding fiscal federalism. Siddaramaiah emphasized the state's consistent performance in terms of economic growth, revenue generation, and social development programs. He pointed out that Karnataka has often exceeded its targets, contributing substantially to the national exchequer.
“Karnataka has always been a proactive partner in India’s growth story,” Siddaramaiah stated. “We believe that a fair and rational tax devolution formula is crucial for states like ours to continue investing in infrastructure, education, healthcare, and other vital sectors. We need the resources to build upon our achievements and address emerging challenges.”
The Chief Minister specifically requested the Commission to consider factors beyond population size and revenue generation when determining the tax devolution formula. He suggested incorporating criteria such as performance in implementing central government schemes, infrastructure development, and fiscal discipline.
Dr. Panagariya, the Chairman of the Finance Commission, assured Siddaramaiah that the Commission would carefully consider all states' perspectives and strive to formulate a balanced and equitable recommendation. He acknowledged Karnataka's significant role in the Indian economy and reiterated the Commission's commitment to ensuring fiscal stability and promoting inclusive growth across the country.
The 16th Finance Commission is currently reviewing the existing tax devolution formula and is expected to submit its recommendations to the central government by November 2024. These recommendations will have a significant impact on the financial health of states and their ability to implement development programs.
Karnataka's plea for a fairer share of central taxes underscores the ongoing debate surrounding fiscal federalism in India. As states strive to meet the growing demands of their citizens and invest in long-term development, a balanced and equitable tax distribution system is essential for ensuring economic stability and promoting inclusive growth. Siddaramaiah's proactive engagement with the Finance Commission reflects Karnataka's commitment to advocating for its interests and contributing to a stronger, more equitable India.
The meeting concluded with both sides expressing their commitment to continued dialogue and collaboration to ensure a mutually beneficial outcome.
