Acceptance of the 14th Finance Commission’s recommendations by the Union government is likely to cost the State dear, particularly in implementation of Centrally sponsored schemes.
Karnataka is expected to feel the pinch despite higher allocation in the form of its share from Central taxes. The hike in the Central pool of taxes is likely to be nullified with reduction in allocations proposed in the Union Budget for 2015–16 for Centrally sponsored schemes, sources in the Finance Department told The Hindu .
The commission has recommended hike in the share of States in Central taxes from 32 per cent to 42 per cent. The State is expected to get Rs. 1,86,078 crore in the next five years (2015–16 to 2019–20) from Central taxes against Rs. 74,346.3 crore during 2010–15 as per the 13 Finance Commission report.
Karnataka’s share in Central taxes has increased from 4.328 per cent as per the 13th Finance Commission report to 4.713 per cent as per the 14th commission report.
Chief Minister Siddaramaiah, who has been holding pre-budget meetings with various stakeholders, pointed out that increase in devolution of taxes to States by 10 per cent had been neutralised by the huge reduction of funds for the Centrally sponsored schemes in the Union Budget, increasing burden on States.
Minister of State for Agriculture Krishna Byre Gowda said the State agriculture plan was likely to be cut by Rs. 500 crore in 2015–16 following reduction in funding by the Centre. The Centre has allocated Rs. 4,500 crore in 2015–16 for the Rashtriya Krishi Vikas Yojana (RKVY) against Rs. 8,400 crore in 2013–14. The Union Budget allocation for housing and education schemes had been cut by Rs. 14,287 crore and Rs. 32,912 crore respectively. Funding for Centrally sponsored schemes such as Sarva Shiksha Abhiyan, Rastriya Uchchatar Shiksha Abhiyan, the RKVY, are expected to face shortage of funds.
