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CM slams Centre’s GST reform
Karnataka CM Siddaramaiah accuses the Centre of using GST reforms for political gain, claiming the state faces significant financial losses and unfair fund allocation.
Chief minister Siddaramaiah on Friday accused the Centre of using tax policy for political ends, arguing that the recent reforms to the Goods and Services Tax (GST) would cost the state billions while simultaneously failing to ensure fair fund allocation.
Speaking in Mysuru, the chief minister said that the Centre was celebrating the slashed GST rates ahead of the Bihar elections, even though Karnataka stood to lose nearly ₹15,000 crore each year as a result of the revised slabs. “The Centre was responsible for GST hikes and collected at higher rates from people all these years. Now, will they return all the surplus GST to the people?” asked Siddaramaiah.
He also alleged that the Centre was denying Karnataka its appropriate fund allocations, as recommended by statutory bodies. He said the state was entitled to nearly ₹17,000 in grants but had received only ₹3200 crore. In contrast to the state’s 3.5% share of central tax distribution, he said, Uttar Pradesh received a share of 18%, despite Karnataka’s annual tax contribution amounting to around ₹4.5 crore. “We get only 14 paise for every rupee,” he said.
“If needed, as we did before, we will go to the courts to secure Karnataka’s share,” said Siddaramaiah, referring to pending allocations such as ₹5,490 crore, as recommended by the Fifteenth Finance Commission, ₹3,000 crore each for developments of roads and water bodies, and ₹5,000 crore for the Bhadra Upper Canal Project.
Siddaramaiah accused the Centre of favouring NDA-ruled states, and alleged selective extension of GST compensations, while Karnataka was forced to manage its welfare guarantees with fewer resources. The state’s BJP MPs, he said, were “only busy praising Modi” instead of addressing the state’s concerns.
Union Minister for Parliamentary Affairs and senior BJP leader Prahlad Joshi rejected Siddaramaiah’s claims, highlighting instead a festive-season release of central funds to all states. He said the Union Finance Ministry had transferred ₹1,01,603 crore in additional tax devolution to 28 states, of which Karnataka received ₹3,705 crore.
“As per the vision of Prime Minister Narendra Modi, the Union Finance Ministry has released a total of ₹1,01,603 crore in additional tax devolution funds to all 28 state governments, including Karnataka,” Joshi told reporters in Delhi.
The minister said the allocation was intended to accelerate capital expenditure and support development and welfare programs, with states receiving the additional sum in advance of their regular October 10 installment. He urged state governments to ensure the money is directed toward development.
Joshi also pointed to steps taken to support farmers facing heavy losses due to excessive rain across Karnataka. He said the Centre had directed procurement of tur, urad, soybean and groundnut at support prices and recently announced the highest-ever minimum support prices for several rabi crops, including wheat, safflower, barley, lentils, mustard and gram. “We have provided support price benefits for various crops. The state government must ensure these benefits reach farmers properly,” he said.
Meanwhile, Siddaramaiah defended his government against criticism from the Opposition, saying allegations that it had failed farmers were politically motivated. He also confirmed that the state’s caste survey was nearing completion, with data from three crore individuals already recorded and enumeration scheduled to finish by October 7
