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
Let the Truth be known. If you read VB and like VB, please be a VB Supporter and Help us deliver the Truth to one and all.
Commercial LPG hike: Delhi restaurant owners warn of higher menu rates, job losses
New Delhi (PTI) A day after a 50 per cent rise in commercial LPG cylinder prices, Delhi's food business, with restaurant owners and street vendors have warned of higher menu rates, financial strain and potential job losses if the trend persists.
The price of commercial LPG was hiked by a steep Rs 993 per 19 kg cylinder, marking the third consecutive monthly hike amid rising global energy prices linked to the West Asia conflict.
For many in the restaurant industry, the spike has been both sudden and steep.
Manpreet Singh, honorary treasurer of the National Restaurant Association of India, said that eateries are already grappling with supply challenges alongside rising costs.
"There is a huge difficulty in getting these cylinders, and black marketing is also increasing in many unregulated sectors," he said, noting that prices that were once around Rs 1,600, often dropping to nearly Rs 1,300 with discounts, have now surged to between Rs 3,000 and Rs 4,000 per cylinder.
He further added that a medium-sized restaurant typically uses between two and five cylinders daily, making the increase particularly burdensome as costs mount.
Singh further said that as costs mount, smaller establishments could struggle to stay afloat. Instead, the association has advised restaurants to shift towards piped natural gas connections through Indraprastha Gas Limited as a more sustainable alternative.
"If this problem continues, PNG is the only long-term solution," he said, adding that temporary measures like coal offer limited relief due to slower cooking times and that it can largely be used only for tandoors.
Echoing similar concerns, Kabir Suri, owner of Mamagoto in Khan Market, said the impact is already visible across the industry. "There has been almost a threefold increase in cylinder prices for restaurants," he said, adding that rising fuel and logistics costs are compounding the pressure.
"If this continues, it will become a significant financial burden, and food prices will inevitably go up. Adding to this burden, higher fuel costs are also affecting logistics and transportation, making a price rise unavoidable. The extent of the impact will vary between small eateries and large chains depending on their scale," he said.
Global oil prices have surged nearly 50 per cent following disruptions in energy supply chains due to the West Asia conflict, pushing up commercial fuel costs and transport expenses.
A West Delhi-based restaurateur said they are trying to manage rising costs while keeping their staff secure. "We are trying to ensure that our staff, from kitchen workers to waiters, are paid on time and do not face immediate hardship," the owner said.
"We are a small restaurant with seating for about 20 to 25 people at a time. But if this continues for long, we will have to take difficult calls. There is only so much we can absorb, and menu prices will have to go up. We hope this does not continue for a longer period," he said.
Another restaurant owner in North Delhi, who did not wish to be named, said operational adjustments alone may not be enough. "We are checking our costs very carefully and trying to cut wherever possible, but if fuel prices remain high, it will eventually affect how we run the business," the owner said.
"Coal helps in tandoor cooking, but it takes more time," the owner further added.
The strain is even more acute among street vendors, many of whom operate on thin margins. A vendor in Saket said he had recently expanded his business, moving from a mobile cart to a rented outlet.
"I have a family to feed and more responsibilities now. Earlier, I managed with a moving cart, but after renting the place, expenses increased," he said. "Whenever cylinders were unavailable, I had to buy them at higher rates in the black market. Now even regular supply is too expensive, and if this continues, we may have to shut down," he added.
In Laxmi Nagar, another vendor said they are struggling to keep the business running. "Sometimes we even used domestic cylinders from home when supply ran out because we had to keep the stall running," he said, adding that rising costs leave little choice but to increase prices or bear losses.
On April 1, the rates of commercial LPG cylinders were hiked by Rs 195.50 per cylinder, followed by a Rs 114.5 hike on March 1, taking the total increase over the past three months to Rs 1,303. With the latest revision, a 19 kg commercial LPG cylinder now costs Rs 3,371.5 in Delhi, up from Rs 2,078.5 earlier.
The prices of domestic LPG cylinders used for household cooking have remained unchanged. They were last increased by Rs 60 per 14.2 kg cylinder on March 7 and currently cost Rs 913 in Delhi.
