Karnataka’s tax devolution has reduced as the share of cess and surcharge in gross tax revenue has risen from 8.1% in 2010-11 to 14% in 2024-25, said Revenue Minister Krishna Byre Gowda, in a pre-Budget 2025-26 presentation made to Union Finance Minister Nirmala Sitharaman.
On behalf of Karnataka and Chief Minister Siddaramaiah, he urged their (cess and surcharge) inclusion in the divisible pool for equitable revenue sharing. He also recommended an amendment in the GST Act to absorb the cess into SGST, empowering States to bridge revenue deficits (post-GST) effectively.
Mr. Gowda further informed the Finance Minister that the State was impacted because of the delay in the release of 15th Finance Commission grants. He sought immediate release of the State-specific grants to the tune of ₹6,000 crore, special grants of ₹5,495 crore and cumulative shortfall of ₹3,300 crore for ULBs, PRIs, health grants, and SDRF.
On social security pensions, Mr. Gowda said, the Centre’s contributions covered only 14.14 lakh beneficiaries out of 68.66 lakh supported by Karnataka. For instance, in FY 2023-24, the State government spent ₹10,554 crore on social security pensions, while the Centre contributed only a mere ₹471 crore (4% of the total expenditure), he said.
“Karnataka urges expanded coverage and a long-overdue revision of Central contributions,” the Revenue Minister said.
He further informed the Finance Minister that anganwadi workers and helpers, as well as ASHA workers, in the State were under-compensated. The State currently pays ₹7,300 to anganwadi workers and ₹5,000 to ASHA workers, while the Centre provided only ₹2,300 and ₹2,000, respectively, under the NHM, he explained.
Mr. Gowda apprised Ms. Sitharaman that Ayushman Bharat excluded many families in the State, with coverage limited to 69 lakh as per the SECC data.
“Karnataka recommends aligning it with the 1.14 crore families covered under the National Food Security Act for equitable health coverage,” he said.
He further sought an increase in the Central share under PMAY (Urban) to ₹5 lakh per beneficiary from ₹1.5 lakh and also a hike in Central share under PMAY (Grameen) to ₹3 lakh per beneficiary from ₹72,000.
On railways and road networks, Mr. Gowda said, Karnataka requested additional railway lines, expedited projects, and Central support for 50% of land acquisition and 100% of construction costs. “The State also urges approvals for road infrastructure proposals, including new ring roads and upgrades to national highways,” he said.
“Karnataka also would like to propose a comprehensive scheme for urban infrastructure covering housing, transportation, and sanitation. “Cities like Bengaluru, Mysuru, and Hubballi require substantial upgrades,” Mr. Gowda told the Finance Minister.
River and irrigation projects
Under the Upper Bhadra Project, aimed at irrigating 2.25 lakh hectares and augmenting reservoirs at a cost of ₹16,125.48 crore, the State sought recognition as a national project and release of ₹5,300 crore announced in the 2022-23 Union Budget, he demanded.
Meanwhile, under Upper Krishna Project Stage-III, designed to irrigate 5.94 lakh hectares at a cost of ₹51,148.94 crore, Karnataka requested appraisal of the DPR and recognition as a national project.
Aimed at providing drinking water to Bengaluru and generating 400 MW of power, the State demanded appraisal of the DPR and necessary clearances, in connection with the Mekedatu project, he said.
According to the Minister, in connection with the Kalasa and Bandura Nala Diversion Project, aimed at improving drinking water supply at a combined cost of ₹1,760 crore, Karnataka was seeking requisite clearances.
With regard to special grants to Kalyana Karnataka region, the State allocated ₹5,000 crore annually for the region, however, was expecting additional Central support to address disparities in education, healthcare, and infrastructure, Mr. Gowda added.
He also sought a State-specific grant of ₹10,000 crore over five years for sustainable development and disaster resilience in the ecologically sensitive Western Ghats.
Published – December 21, 2024 12:07 am IST
