K’taka needs greater central devolution as it faces regional imbalances, urbanisation challenges: CM

PTI, Aug 29, 2024, 12:23 PM IST

Karnataka requires greater devolution by the Centre as it faces regional imbalances, especially in the Kalyana Karnataka region, and the challenges of urbanisation, Chief Minister Siddaramaiah said on Thursday.

In his address to Chairman of the 16th Finance Commission Arvind Panagariya and its members at a meeting here, he said Bengaluru needs an investment of Rs 55,586 crore over the next five years out of which the State requested for a grant of Rs 27,793 crore.

Similarly, for the equitable development of the Kalyana Karnataka region, the State is investing Rs 25,000 crore and requested a matching grant of Rs 25,000 crores over five years from the 16th Finance Commission.

To ensure effective disaster mitigation and timely relief and rehabilitation measures in the highly vulnerable region of Western Ghats, the State requested a grant of Rs 10,000 crore.

According to him, the 15th Finance Commission’s award reduced Karnataka’s share sharply from 4.713 to 3.647. This has led to a loss of Rs 68,275 crore during the five-year period from 2021-26, he said.

The Finance Commission was conscious of the drastic cut Karnataka received and recommended state specific grants of Rs 11,495 crore, the Chief Minister said, adding, the Government of India, however, has not accepted the recommendation. “So, Karnataka was deprived of these grants as well. The total of all the losses amount to Rs 79,770 Crores during the 15th Finance Commission period,”, Siddaramaiah said.

Karnataka, he said, has seen a revenue transfer of Rs 35,000-40,000 crore per year to other States, amounting to 1.8 percent of its GSDP, during the 15th Finance Commission period. “The figure is astounding because the net transfers outside of Karnataka amount to about 50 to 55 percent of the total revenues it generates.” Due to the disproportionate weightage given to equity, Karnataka and similarly placed States ended up getting penalised for their good performance, both fiscally and demographically, the Chief Minister said.