Karnataka Chief Minister Siddaramaiah has raised concerns about the unfair distribution of taxes by the Union government and invited the Chief Ministers of eight states to a conclave in Bengaluru. The meeting aims to address issues related to fiscal federalism and advocate for a more equitable allocation of resources. Siddaramaiah argues that states with higher economic performance, such as Karnataka, are being penalized with lower tax allocations, undermining cooperative federalism and threatening the financial autonomy of progressive states.
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- Karnataka CM Siddaramaiah has written to the Chief Ministers of eight states about unfair tax devolution by the Union government.
- Siddaramaiah has invited these CMs to a conclave in Bengaluru to discuss fiscal federalism and address the issue of resource allocation.
- The Chief Minister emphasized the need for the Finance Commission to shift focus and create incentives for growth and better tax mobilization.
- States with higher Gross State Domestic Product (GSDP) per capita, like Karnataka, are reportedly receiving disproportionately lower tax allocations.
- This approach, according to Siddaramaiah, undermines cooperative federalism and threatens the financial autonomy of progressive states.
- He highlighted that previous Finance Commissions have overemphasized equity at the expense of efficiency and performance.
- The 16th Finance Commission is currently deliberating, and Siddaramaiah has urged them to examine the impact of prioritizing equity on resource devolution.
- The reduction in central financial transfers to well-performing states limits their ability to invest in infrastructure.
- Siddaramaiah stressed the expectation of taxpayers in states contributing significantly to national tax revenue to receive a fair share of their taxes.
- A one-day conclave of finance ministers from five states, including Kerala and Tamil Nadu, is also being held to discuss the Finance Commission’s issues.
