Karnataka leads the southern states’ protest against squeeze of funds by Modi regime

Declaring that Karnataka has lost Rs 1.87 lakh crore under the 15th Finance Commission and that Congress’ protest in New Delhi this week is to fight this “big injustice” to the state. This remark made on February 5 by chief minister Siddaramaiah announced his protest in Delhi today, February 7 evinced a defensive remark from union finance minister, Nirmala Sitharaman. All Congress MPs and MLAs from Karnataka, led by Siddaramaiah, will protest at Jantar Mantar on February 7. “I invite BJP MPs, MLAs and leaders to join the protest to raise our voice for the state’s rights,” Siddaramaiah told a news conference here. The CM also specified that he is not against giving money to states that are financially weak but that disbursement needs to follow the patterns set by the 14^th Financial Commission and should be discussed publicly, be transparent and accountable..

Making a strong and emotive point, with statistics, Siddaramaiah said Karnataka’s share in central taxes came down to 3.64% under the 15th Finance Commission from 4.71% under the 14th Finance Commission. “This decrease resulted in a loss of Rs 62,098 crore,” he said. Pointing a clear finger at Finance Minister Nirmala Sitharaman, Siddaramaiah said Karnataka was not given Rs 11,495 crore of special grants recommended by the 15th Finance Commission. “Altogether, Karnataka missed out on a total of Rs 73,593 crore,” he said.

The complete stoppage of the GST compensation has hurt Karnataka, Siddaramaiah said. “Before GST, our state’s tax collection growth was at 15%…compensation was discontinued in June 2022. This has significantly impacted our ability to achieve a 15% tax collection growth rate again,” he said. With cess and surcharges not devolved to the states, Karnataka is losing another Rs 45,322 crore, Siddaramaiah said.

“Karnataka is the second-highest tax collector after Maharashtra. The state contributes Rs 4.30 lakh crore in tax revenue. However, the state receives only around Rs 12-13 out of every Rs 100 in taxes,” Siddaramaiah explained. Siddaramaiah refuted claims by BJP leaders that Karnataka received more funds under the NDA government.

“In 2017-18, the union budget size was Rs 21.46 lakh crore. We got Rs 47,980 crore under devolution and grant-in-aid. In 2018-19, the union budget size was Rs 24.42 lakh crore and we got Rs 51,157 crore. In 2019-20, the union budget size was Rs 27.86 lakh crore and we got Rs 54,814 crore. In 2023-24, the union budget size is Rs 45.03 lakh crore. But the state is receiving Rs 50,257 crore. How is it that the state got more funds?” Siddaramaiah said.

Siddaramaiah also said that Karnataka did not get Rs 5,300 crore for the Upper Bhadra Project as announced in the previous union budget.

Kerala

Finance Minister KN Balagopal’s fourth Budget speech that lasted for around two-and-a-half hours was marked by liberal criticisms of the Union government for neglecting the needs of the state. He referred to the alleged denial of the state’s legitimate share of plan fund allocation, centrally collected taxes, and central government-sponsored projects.

The finance minister said: “The Centre provides only ₹ 21 against Kerala’s tax collection of every ₹ 79. That is, only ₹ 21 out of ₹ 100 is the Centre’s contribution. Uttar Pradesh gets ₹ 46 out of ₹ 100 from the Centre.”

Balagopal said Kerala would have to consider “Plan B” if the Centre’s neglect towards the state continued. However, he did not specifically detail the plan. The minister said the Budget has thrown open the gates for private investment to salvage Kerala from a severe financial crisis. He said he was expecting a revenue of ₹1,38,655 crore and an expenditure of ₹1,84,327 crore in the next financial year.

Balagopal pegged the revenue deficit at ₹27,846 crore, 2.12 percent of the state’s GDP, and the fiscal deficit at ₹44,529 crore, 3.4 percent.

“Futuristic technological strides, an exponential rise in demand, and the resultant economic development define the sunrise sectors. This is unlike the sunset sectors, which have weakening demand and are driven by technologies destined for obsolescence,” Balagopal said in his opening statement.

Tamil Nadu

Meanwhile, PTI reports that Tamil Nadu also announced a ‘black shirt demonstration’ in New Delhi on Thursday, February 8 at the Gandhi statue outside Parliament. Condemning what the party called the union government’s ‘partiality’ in not appropriately funding the State to tackle the situation arising out of damage caused by the recent cyclone, rains and flood, DMK MP and the party’s Parliamentary party leader, T R Baalu said MPs from alliance parties, including the Congress have been requested to join them in the national capital.

According to the state’s claim, in the interim union budget, there was no announcement on Tamil Nadu’s representation seeking relief to the tune of about Rs 37,000 crore following the cyclone, unprecedented rains and flood in December 2023.

“Also, there was no announcement in the interim budget on fund allocation for Tamil Nadu’s development projects including establishment of the AIIMS in Madurai,” a DMK release said.

The DMK Parliamentarians will stage the protest demonstration at 10 am on February 8 near the Gandhi statue in the Parliament complex.

Following the interim budget presentation, DMK President and Chief Minister M K Stalin condemned the Centre for making ‘no announcements on financial allocation’ to Tamil Nadu.

(Report has been compiled with inputs from Deccan Herald, Print, SouthFirst and PTI)

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