Home >politics >policy >Karnataka hits out at centre on tax revenue sharing formula

Bengaluru: Karnataka agriculture minister Krishna Byre Gowda on Thursday hit out at the centre over its policy on devolution of tax to states, which according to the southern state penalizes progressive and better-performing states.

“The latest and most disturbing move pertains to the devolution of tax revenue to the states. The disquiet amongst progressive/southern states, which contribute proportionately higher tax revenue than they receive in return, has only increased since the central government altered the devolution formula, through Terms of Reference (TOR) for the XV finance commission," Gowda said in a statement.

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The statement comes days before all southern states are expected to meet on 10 April over the contentious issue. With assembly elections scheduled for 12 May, the Siddaramaiah-led Congress government in Karnataka is attacking the centre for being unfair in its allocations, a refrain that runs through the party’s campaign rallies across the state.

The Congress is citing the alleged ‘injustice’ to bolster its case that the central government led by Prime Minister Narendra Modi has made no contribution to the progress of Karnataka.

“Moves like Hindi imposition, ignoring vernacular, cultural and regional diversity, or tacit efforts to favour the North over the South by creating a rift within federal constituents, is weakening cooperative federalism instead of strengthening it," Gowda said in the statement.

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Southern states are contesting the centre’s decision to change the finance commission’s decision g 2011 census data instead of 1971 census data to decide the allocation of tax revenue to states.

The statement added that states such as Karnataka, which are far ahead in implementing socio-economic programmes without depending on or waiting for the Union government to come up with centrally sponsored schemes, will not be eligible for grants from the 15th finance commission.

“The central government, instead of linking incentives to their flagship programs, could have linked incentives to achievement of key national priorities. This would reward all states that will achieve or have already achieved national socio-economic goals. This would have had the double benefit of putting focus on results instead of merely spending money without necessarily achieving results," Gowda said.

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The TOR of the 15th finance commission also includes incentives and disincentives to force states to “control/reduce populist programs", Gowda said in his statement.

He said mid-day meals and milk, free or subsidised ration (Anna Bhagya), affordable meals (Indira Canteens), free laptops etc, may arbitrarily be branded as populist by the latest finance commission. The Siddaramaiah government has announced a number of populist schemes centered around food security in the last five years.

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