“Centre Discriminating Against Karnataka, Other Southern States”

Karnataka Chief minister Siddaramaiah led a protest in New Delhi, on Wednesday , against the alleged systematic attack against Karnataka and other southern states in the devolution of taxes.

This comes weeks after West Bengal Chief Minister Mamata Banerjee, held a similar demonstration in the Capital in December 2023.

Attended by hundreds of Congress leaders and workers the protest at Jantar Mantar is the “clarion for justice” Siddaramaiah said. He also dismissed the Bharatiya Janata Party (BJP)’s allegation that the protest was aimed at dividing the north and south. He added that the Congress wants the country to be united but there should be no discrimination against the southern states.

“We are raising the issue of discrimination meted out by the government of India to the state of Karnataka and other southern states,” Siddaramaiah said. He added that he had written to all BJP and the Janata Dal (Secular) members of Parliament and asked them to participate in this agitation.

“The silence of BJP and JDS MPs and MLAs is deafening. Their absence is not just a personal failing; it is a betrayal to the people of Karnataka. We are here, committed to fighting for justice, equity, and the prosperity of our state, yet those who were elected from BJP and JDS to represent and champion Karnataka’s causes have chosen to turn their backs on us,” Siddaramaiah said while addressing the party workers.

He said the formula used to devolve taxes to the states, especially Karnataka, under the 14th Finance Commission was changed. He called for reverting to the old formula to stop the revenue loss of Karnataka.

Siddaramaiah’s deputy CM, D. K. Shivakumar, said Karnataka ranks second in Goods and Services Tax (GST) collection and is the biggest contributor to the country’s revenue. He added they were asking for their rights and share. Shivakumar said Karnataka sought drought relief funds but not even a single rupee was given.

“When there was this double-engine government (in the state), Nirmala Sitharaman had promised various grants to the people of Karnataka. Even after one year, not even a single rupee has been given. I wish to remind Nirmala Sitharaman, who is representing Karnataka (in the Rajya Sabha),” Shivakumar added.

Asking the Centre to treat all states equally, he said, “They have given Gift City to Gujarat. Give us a Gift City also. Let them give an opportunity to Tamil Nadu, Telangana and Maharashtra. India is a united country, it is not just one state.”

On Tuesday, Tamil Nadu CM, M. K. Stalin wrote a letter backing Kerala CM Pinarayi Vijayan’s protest and accusing the Union government of “arbitrarily” restricting the borrowing limit of the states by “misusing” its powers. Stalin said the fundamental principle of fiscal federalism the Constitution makers envisioned was under grave threat.

Vijayan and his Cabinet colleagues are scheduled to stage a protest in Delhi against the Union government’s alleged negligence towards the state on Thursday.

Karnataka, Tamil Nadu, and Kerala have alleged that the Union government has restricted their borrowing and the fund flow has been reduced due to the recommendations of the 10th to 15th Finance Commission.

Union finance minister Nirmala Sitharaman told Lok Sabha on Monday that there was no discrimination against any state as the disbursement of funds was as per guidelines of the Finance Commission and the Comptroller and Auditor General (CAG) reports.

Mahatma Gandhi National Rural Employment Guarantee Scheme funds for West Bengal have been stopped following CAG objections as the state failed to submit utilisation certificates.

Siddaramaiah has said Karnataka has suffered ₹1.87 lakh crore losses during the tenure of the 15th Finance Commission because of the decline in Central grants. He said the state’s devolution of funds has decreased from 4.71% under the 14th Finance Commission to 3.64% under the 15th Finance Commission, resulting in a loss of approximately ₹45,000 crore over the past four years. The cumulative loss over five years amounts to ₹62,098 crore.

Speaking to The Citizen Murbagra Srinivas, District President at Karnataka’s Kolar district said that this is a “stepmother” like behaviour by the Central government towards the state.

“Our leader CM and deputy CM are running the government in Karnataka. But there are cuts in the country. Karnataka is the highest tax paying state but at the same time the tax that we are paying, we are not even getting half the budget to run the state,” Srinivas said.

He also questioned how the state will function properly without proper findings. “Central government is taking more tax from Karnataka and dividing it to the other states,” Srinivas added.

The Karnataka CM has alleged that the state share of central taxes have reduced from 4.71% in 14th Finance Commission to 3.64% in 15th Finance Commission. “This has led to a staggering loss of approximately Rs 62,098 crore over five years,” he added.

He also alleged that the implementation of GST, “which was promised to be a boon, has turned into a bane due” to the discontinuation of compensation in June 2022.

“This abrupt halt has severely crippled our fiscal health, making it a Herculean task to regain the tax collection growth rate of 15% that we once proudly maintained. Karnataka has lost about Rs 59,274 crore due to unscientific implementation of GST,” he further said.

Despite Karnataka’s substantial contribution of Rs 4,30,000 crore in tax revenue every year, the state alleged it has received just about Rs 50,000 crore from the Union Government.

While a memorandum was given, Siddaramaiah said that as a sitting CM he had reached out to Finance Minister Nirmala Sitharaman various times but to no avail.

“Nirmala Sitharaman says ‘I do not want to interfere in the report of the Finance Commission’. Why are you lying? This is all based on facts. Anybody can verify from the budget documents of the Government of India,” Siddaramaiah said.

Radha, member of Karnataka Pradesh Mahila Congress said that the issue is serious and has forced them to come out and protest. “Our chief minister kept reaching out to the central government but received no reply. He is giving money to Andhra but not to Karnataka,” she said.

In Bengaluru, meanwhile, BJP legislators protested in front of the Mahatma Gandhi statue on the Vidhana Soudha premises against the state government’s failure in tackling drought. Leader of the Opposition R Ashok, BJP state president BY Vijayendra and former chief minister Basavaraj Bommai and other legislators tried to close down the secretariat as none of the ministers were present. They were stopped and detained by the police.

Meanwhile, BJP parliamentary board member B. S. Yediyurappa told reporters that the Congress government had failed to tackle drought and drinking water issues.

Calling the Delhi protest a “big drama”, Yediyurappa said that Siddaramaiah had taken all Congress legislators to Delhi to hide their failures. “They should think to what extent this was right. Their objective is to gain publicity and not to solve the issue”.