Bengaluru: Deputy Chief Minister DK Shivakumar, along with Heavy Industries Minister MB Patil and Forest and Environment Minister Ishwar Khandre, have responded to the request of Legislative Council Member Dinesh Gooligowda to initiate action against water pollution in the Cauvery River.
Legislative Council member Dinesh Gooli Gowda, who has made an announcement in this regard, said, “Deputy Chief Minister DK Shivakumar has ordered the Managing Director of the cauvery irrigation corporation to conduct a site inspection regarding complaints of wastewater discharge into the Cauvery River and to discuss measures taken by local authorities to prevent this pollution.”
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Similarly, Heavy Industries Minister MB Patil has also issued a directive to the Principal Secretary of the Department of Commerce and Industry, instructing to take appropriate measures to prevent the pollution of river water. Forest and Environment Minister Ishwar Khandre in the meantime has directed the Principal Secretary of the Forest Department to form a committee in collaboration with relevant departments. This committee is tasked with submitting a detailed report within two weeks.
Dinesh Gooli Gowda stated that, “I had requested the Chief Minister Siddaramaiah and Deputy Chief Minister DK Shivakumar to form a committee to prevent wastewater contamination. Now the government has now responded to this request and is actively working to clean the polluted river.”
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New Delhi: The Union government is considering reducing the share of tax revenue allocated to states, sources familiar with the matter have said.
The proposal will be submitted to the constitutionally-appointed Finance Commission of India, which makes recommendations on tax sharing and other aspects of Union-state fiscal relations. The commission, headed by economist Arvind Panagariya, is expected to submit its recommendations by October 31, with implementation set for the 2026-27 fiscal year. The recommendations are binding.
According to one source, the Union government intends to lower the states' share of tax revenue from the current 41% to at least 40%. A cabinet decision on the proposal is expected by the end of March before being forwarded to the Finance Commission. A 1% reduction in states' share would give the Union government approximately ₹35,000 crore ($4.03 billion), based on current tax projections.
The Ministry of Finance and the Finance Commission have not yet responded to queries regarding the proposal.
The share of central taxes allocated to states has increased from 20% in 1980 to 41% at present. However, the Union government’s spending requirements, particularly during economic slowdowns, have led to calls for a reduced allocation to states. India's fiscal deficit is projected at 4.8% of GDP for 2024-25, while state deficits stand at 3.2% of GDP.
States account for over 60% of total government expenditure, primarily focusing on social infrastructure such as health and education. Meanwhile, the Union government allocates more resources to physical infrastructure. The introduction of the Goods and Services Tax (GST) in 2017 has limited states' ability to generate independent revenue. Additionally, since the COVID-19 pandemic, the Union government has increased the share of cesses and surcharges, taxes not shared with states, to over 15% of gross tax revenue, up from 9-12% earlier.
The Union government is also expected to propose measures to discourage states from offering cash handouts, debt waivers, and other welfare schemes often labeled as "freebies" for political gains. One possibility under consideration is linking Union grants to states' adherence to specific fiscal conditions.
Over the past five years, revenue-deficit grants to states have declined from ₹1.18 lakh crore ($13.61 billion) in 2021-22 to an estimated ₹13,700 crore ($1.58 billion) for 2025-26. It remains unclear whether grants will be denied to states that continue to offer such welfare schemes.