Udayavani Interview: Minister Krishna Byre Gowda addresses issues in grant allocation

Team Udayavani, Feb 7, 2024, 10:20 AM IST

Bengaluru: Karnataka’s Revenue Minister Krishna Byre Gowda has voiced strong discontent over the perceived neglect of Karnataka in the allocation of grants by the central government. Gowda who is a member of the Goods and Services Tax (GST) Council, expressed his indignation at the perceived “injustice” in tax devolution.

In an exclusive interview with Udayavani, Gowda highlighted the disparities in tax share, stressing its adverse effects on the state’s progress and the nation as a whole.

Q: Being the second highest taxing state to the country’s exchequer, what position does Karnataka hold in the Centre’s allocation of grants?

A: According to one calculation, for every hundred rupees contributed by Karnataka, the state receives a mere 13 rupees from the Center. In contrast, Gujarat receives Rs 31, Rajasthan Rs 154, Madhya Pradesh Rs 279, and Uttar Pradesh Rs 333. Even compared to the southern states, we are being poorly treated. We are protesting against this injustice.

Q: The opposition claims that such disparities are typical in a federal system. How do you respond to this assertion?

A: Who said otherwise? Our stance is not in opposition to the allocation of grants to other states. If Rs 100 is allotted to Uttar Pradesh let then give Rs 50 extra, we don’t mind. But what is ours should rightfully be allocated to us. Shouldn’t the central government at least demonstrate the courtesy of ensuring that the state receives its fair share?

Q: If that’s the case, what amount of money does the state contribute to the center in taxes annually? And how much should we get? How much have we received?

A: Currently, the state contributes Rs four lakh crores yearly in taxes. Only Rs 50 to 60 thousand crores is returned.  Additionally, an additional Rs 50,000 to 60,000 crores annually should be shared as per Finance Commission’s recommendations as well as a share of Cess collected and other sources.

The issue isn’t solely about taxes; there are also grievances regarding injustices in irrigation schemes. For instance, the Mahadayi project’s lack of environmental clearance has halted progress, leading to water scarcity in North Karnataka. Similarly, funds allocated for the upper Bhadra Project, amounting to Rs 5,300 crores, have been allotted but not yet disbursed. Additionally, decisions regarding Mekedatu also remain pending.

Q: Why do you think that Karnataka is being targeted?

A: They (the Center) need to explain. Is this a form of punishment for being a progressive state? or because we are from South Indian states?

Q: What are the consequences of this situation?

A: Karnataka serves as a vital contributor to the nation’s economy, akin to a cow providing milk. Shouldn’t it receive the necessary sustenance to maintain its productivity? If this support diminishes, the quantity of output will inevitably decrease. Consequently, there will be a decline in tax collection and a worsening of the unemployment problem.

Ultimately, persistent injustice will hinder the overall progress of the country. For if Karnataka thrives, so does the nation. It is widely recognized that Karnataka contributes the highest revenue to the national treasury and attracts foreign investment. Moreover, it leads in job creation. However, the current approach of the central government appears to be self-defeating. Hence, the ongoing struggle in Delhi holds significant importance.

Q: Bengaluru contributes a significant amount in taxes. Consequently, the Center is pointing out whether funds can be disproportionately allocated to Bengaluru alone, neglecting regions like North Karnataka or Kalyan Karnataka. How do you respond to this?

A: As I’ve previously mentioned, we are all part of one federal system – like siblings. We are not asking for the return of all of the Rs 100 we contributed, but rather to ensure its fair distribution. Ultimately, we seek the allocation of resources based on the genuine needs of each region.

Translated from interview in Kannada by Vinaykumar Chandaragi