Karnataka Budget: Siddaramaiah slams Centre, says it left state poorer by Rs 59,000 crore

Karnataka Chief Minister Siddaramaiah on Friday (February 16) stepped up attack on the Centre while presenting the state’s budget, accusing it of perceived injustices in fund allocation and reduced tax devolution to the state.

Originating from Siddaramaiah’s ‘Chalo Delhi’ campaign, the ongoing feud took centre stage during the Budget Session in the state assembly, turning it into a political battleground between the ruling Congress and the Opposition BJP.

Condemning the “flawed implementation” of the GST, the chief minister lashed out at the Union government for falling short of its promised 14 percent growth rate. Siddaramaiah highlighted a significant shortfall in GST revenue, lamenting a loss of Rs 59,274 crore to the state due to what he termed as the “unscientific implementation” of GST over the last seven years.

‘Anti-people decisions’

In a bold move, Siddaramaiah and his entire cabinet travelled to Delhi on February 7, demanding justice for Karnataka, branding the campaign, ‘My tax, my right’. This strategic move garnered attention, prompting governments in Kerala and Tamil Nadu to follow suit.

As a follow-up, Siddaramaiah announced during his budget presentation that a detailed memorandum, analysing statistics, would be prepared under the guidance of the state cabinet and subject experts. The memorandum will be submitted to the 16th Finance Commission, seeking a larger share for Karnataka under central devolution and grants.

In a scathing attack on the Modi government, Siddaramaiah denounced what he dubbed “anti-people decisions” by the Union government over the past decade. He asserted that these decisions had resulted in alarming consequences such as widening inequality and crony capitalism. He emphasised that the state government had undertaken tasks neglected by the Central government, as the latter “had abdicated its responsibility”.

Flays previous regime

Even the previous BJP government in Karnataka did not escape Siddaramaiah’s scrutiny, as he accused it of failing to rectify the injustices resulting from the interim report of the 15th Finance Commission applicable for FY 2020-21. The chief minister pointed to severe losses incurred by the state in the final report of the 15th Finance Commission, attributing them to changes in the method of calculating state income. He said, “It is estimated that during the six-year period of the 15th Finance Commission, the loss to the state under devolution of central taxes comes to Rs 62,098 crore.”

In addition, Siddaramaiah flayed the rejection of the 15th Finance Commission's recommendations for Rs 5,495 crore in special grants and Rs 6,000 crore for the development of Bengaluru by the Central government. Despite claims of a double-engine government in the state, the previous regime proved incapable of securing Rs 11,495 crore in special grants from the Centre, he said.

‘Not getting due’

Continuing his offensive against the Modi government, Siddaramaiah highlighted a surge in cesses and surcharges collected by the Central government, stating that the states aren't receiving their due share. The collection for 2023-24 has surged by 153% as compared to 2017-18. If shared, this would amount to Rs 11,34,301 crore for all states, but due to denial of the same, Karnataka suffered a loss of Rs 45,322 crore in the last 7 years, according to the chief minister.

He emphasised the adverse impact of the unscientific GST implementation, escalating cesses, surcharges, and a change in the allocation formula. He pointed out that these injustices, combined with a short release of funds to the states have taken a toll on their finances.

Negative propaganda

Siddaramaiah also used the budget presentation to make a sarcastic attack at the top BJP leadership. He hailed the Central government for conferring the Bharat Ratna on noted agriculture scientist MS Swaminathan, but at the same time urged it to extend MSP to the farmers based on the recommendations of the Swaminathan Commission.

Siddaramaiah also accused the Opposition of spreading negative propaganda against the state government’s guarantee schemes. He argued that those who had previously claimed the state government was bankrupt were now attempting to portray the schemes as their own, referring to the Union government and other state governments ruled by the BJP. He underlined the global appreciation for the schemes, pointing to their positive economic and social impact. He expressed satisfaction in fostering prosperity and reiterated his confidence in the guarantee schemes, citing tangible benefits observed among their beneficiaries.

BJP’s walkout

Vehemently protesting Siddaramaiah's strong criticism of the Centre’s alleged economic bias during the budget presentation, Opposition leader R Ashok hit back, saying, “You are here to present the budget, not to condemn the Union government.” Subsequently, other BJP MLAs joined in, causing a commotion.

However, despite the disruption caused by the Opposition, Siddaramaiah persisted in presenting the budget. Following the chaos agitated BJP MLAs chose to boycott the proceedings, shouting slogans against the government as they staged a walkout. The protest outside the assembly took a dramatic turn, with BJP members chanting “Enilla Enilla, Burude Burude” (nothing…nothing, zero achievements). They proceeded to affix a poster on the entrance of the state assembly, symbolising their outrage and dissent against the chief minister's remarks. This incident marked a contentious episode in the ongoing political feud between the ruling Congress and the Opposition BJP in Karnataka.

Political analyst C Rudrappa observed that Siddaramaiah utilised the budget presentation as an opportunity to target his opponents, turning the session into a platform for political manoeuvring. The BJP responded with a walkout and protests, highlighting how political parties are resorting to political one-upmanship on every issue, with the Lok Sabha elections fast approaching, said Rudrappa.