MLAs urged to speak up on Centre’s treatment of Karnataka

Predicting “dark days” ahead for Karnataka in terms of finances, Leader of the Opposition in the Assembly Siddaramaiah on Wednesday appealed to all MLAs to raise their voice against Union Finance Minister Nirmala Sitharaman for not accepting the 15th Finance Commission’s recommendation to provide a special grant of ₹5,495 crore to the State.

Participating in a debate on State Budget in the Legislative Assembly, Mr. Siddaramaiah said the Finance Commission had come out with the recommendation as Karnataka had lost out a lot in the devolution of Central funds. But the Finance Minister had, on January 30, written to the chairman of the commission asking him to reconsider the recommendation.

“Should we tolerate this and keep quiet?” he asked. “It is an injustice to Karnataka. Take up the demand for accepting the Finance Commission’s recommendations with the Union Finance Minister.”

Expressing concern over Karnataka losing out on over ₹11,000 crore of Central funds, including compensation towards GST losses, the Congress leader cautioned that if this was tough, darker days were ahead for the State. The system of compensating losses on account of GST ends in 2022. Also, the projections of the Finance Commission indicate that there will be a reduction in the annual devolution of funds to the State in the coming years, he said.

“This will mean that the State will have to face a revenue deficit of about ₹30,000 crore in 2022-23 and ₹46,000 crore in 2023-24,” he said. He said this would put the State in a precarious position, leaving it with no funds to take up development schemes as the available resources would go into meeting the “committed expenditure” such as salaries, pensions and grants to local bodies.

He blamed such a scenario on the reduction in collection of Central taxes to the extent of ₹2.26 lakh crore, which he argued was because of the impact of demonetisation and the GST regime.

Seeking to debunk the claims of Chief Minister B.S. Yediyurappa that he had given emphasis to the agricultural sector in his Budget, Mr. Siddaramaiah said that, in reality, there was a reduction of 24% in terms of fund allocation to the sector.

Similarly, there was a reduction in allocation to various social and economic services sectors, he said. He also alleged that funds had been reduced particularly for welfare schemes meant for SCs, STs, OBCs and minorities.

Will look to borrow from World Bank: CM

Seeking to allay fears that development schemes may not get adequate funding due to the State’s precarious financial position, Mr. Yediyurappa on said Karnataka would try to raise loans from the World Bank to fund ongoing irrigation work and other schemes.

“We will try to get World Bank loan... Already we have held consultations with the NABARD authorities,” he told the Legislative Assembly. “It is my commitment to the State that none of the major development works will be affected.”

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Printable version | Aug 4, 2020 5:48:23 PM | https://www.thehindu.com/news/national/karnataka/mlas-urged-to-speak-up-on-centres-treatment-of-karnataka/article31112613.ece

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