Karnataka CM meets Sitharaman, seeks pro-growth tax devolution from 16th Finance Commission
New Delhi, Jun 24 (PTI): Karnataka Chief Minister Siddaramaiah on Tuesday met Union Finance Minister Nirmala Sitharaman to seek the Centre's support for a pro-growth approach in tax devolution among states by the 16th Finance Commission.
During the meeting, Siddaramaiah briefed Sitharaman on Karnataka's significant losses under the 15th Finance Commission award and demanded a larger allocation for the state from the central tax pool under the 16th Finance Commission starting April 1, 2026.
"I met the Union Finance Minister and informed that Karnataka faced a cumulative loss of over Rs 80,000 crore due reduction in the state's share of tax devolution by the 15th Finance Commission," Siddaramaiah told reporters after the meeting.
The CM submitted an additional memorandum and urged the Centre to rectify a persistent imbalance in fiscal transfers from the Centre to states.
Under the 15th Finance Commission, the state's share in tax devolution declined from 4.713 per cent to 3.647 per cent -- a reduction of over 23 per cent. Karnataka was also denied Rs 11,495 crore in special grants, resulting in a total loss of Rs 80,000 crore during the award period.
The chief minister attributed this decline primarily to the over-reliance on the income-distance criterion, which received 45 per cent weightage under the 15th Finance Commission.
Karnataka has requested the 16th Finance Commission to reduce the weightage for income-distance by 20 percentage points and reallocate it to fiscal contribution -- the state's share in national GDP.
The state has also proposed discontinuing Revenue Deficit Grants in their current format, arguing they contradict fiscal discipline principles outlined in the FRBM framework. Instead, Karnataka suggested redistributing the same amount -- 1.92 per cent of Gross Union Receipts under the 15th Finance Commission -- among all states using the horizontal devolution formula.
Siddaramaiah highlighted the developmental challenges facing Bengaluru, Kalyana Karnataka and Malenadu regions, emphasising that fair and pro-growth devolution would accelerate the state's growth trajectory.
The chief minister clarified that Karnataka's proposals were not a request for special treatment but would improve overall national resource mobilisation and foster cooperative and competitive federalism.
The meeting concluded with Siddaramaiah requesting the finance minister to include these proposals in the Union government's memorandum to the 16th Finance Commission, arguing that growth-friendly devolution would empower all states to contribute effectively to India's development journey.
The Finance Commission gives suggestions on financial relationship between the Centre and states.
The 16th Finance Commission, set up in December 2023 under the chairmanship of Arvind Panagariya, is expected to give its recommendations by October 31, 2025, which will be applicable for a five-year period beginning April 1, 2026.
The 15th Finance Commission headed by N K Singh had suggested that states be given 41 per cent of the divisible tax pool of the Centre for a five-year period from April 2021 to March 2026.
Met Union Finance Minister Smt. @nsitharaman today and urged the Govt of India to ensure a pro-growth and fair tax devolution by the 16th Finance Commission.
— Siddaramaiah (@siddaramaiah) June 24, 2025
Karnataka’s share was slashed from 4.713% to 3.647% under the 15th FC - resulting in a loss of ₹80,000 crore.
I’ve… pic.twitter.com/wV5MF0K6Ej
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State will send ₹850 crore proposal to Centre for development of Malpe harbour: Min Mankal Vaidya
Udupi: The State will submit a Rs 850 crore proposal to the Union government for the overall development of the Malpe fishing harbour, Karnataka Minister Mankal S. Vaidya announced while laying the foundation stone for a Rs 12.52 crore modernisation project of the harbour under the Pradhan Mantri Matsya Sampada Yojana (PMMSY).
“If the Union government does not consider the proposal, the State government will finance the proposed project,” The Hindu quoted Vaidya, state's Minister for Fisheries, Ports and Inland Water Transport, as saying.
Vaidya noted that Coastal Regulation Zone (CRZ) rules continue to hinder coastal development in Karnataka, preventing the implementation of projects worth Rs 2,034 crore. He stressed the need for CRZ norms in the state to be aligned with those in other states, where such regulations do not pose a barrier to coastal infrastructure and development initiatives.
Speaking at the event, Udupi-Chikkamagaluru MP Kota Srinivas Poojary said the PMMSY has revitalised the fisheries sector, enabling the implementation of several projects that benefit fishing communities nationwide. He urged the state government to prioritise dredging of estuaries and upgrading fisheries jetties to ensure year-round navigability and the safety of fishing vessels.
The Rs 12.52 crore modernisation project will focus on enhancing sanitation and water supply at the harbour, upgrading fish handling capacity, and strengthening security at the port, The Hindu quoted fisheries and ports officials as saying.
A reliable water supply and improved handling facilities are expected to speed up auctions and vessel turnarounds, while upgraded wastewater systems will help tackle long-standing issues of odour and contamination at the harbour.
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