Recommend capping cesses, surcharges at 5% of gross tax revenue: CM to Finance Commission
Bengaluru (PTI): Karnataka Chief Minister Siddaramaiah on Thursday requested the 16th Finance Commission to recommend capping of cesses and surcharges at five per cent of gross tax revenue, and anything exceeding that should be a part of the divisible pool.
In his address to Chairman of the 16th Finance Commission Arvind Panagariya and its members at a meeting here, he also requested the panel to recommend that vertical devolution should be at least 50 per cent of the divisible pool.
All non-tax revenues of the Centre should be included in the divisible pool of taxes by bringing the necessary Constitutional amendment, Siddaramaiah said.
The Chief Minister said economically advanced States are committed to supporting poorer States, but this should not come at the expense of their own residents or economic efficiency.
The Commission needs to carefully examine the impact of extremely high emphasis given to equity on the incentives of well performing states.
"Moreover, the taxpayers of such states expect their taxes to work for them. This creates public trust. The Finance Commission therefore needs to do a tightrope walk while balancing equity with efficiency and performance", Siddaramaiah said.
Due to the disproportionate weightage given to equity by the 15th Finance Commission, Karnataka and similarly placed States ended up getting penalised for their good performance, both fiscally and demographically, the Chief Minister said.
Noting that cesses and surcharges are not part of the divisible pool, the Chief Minister said over the years, the Union Government has increased its reliance on them.
This has led to the divisible pool not growing in the same proportion as the Gross Tax Revenue, he said. This has caused substantial loss to all the States.
The loss to Karnataka on account of the non-sharing of cesses and surcharges from the divisible pool is Rs. 53,359 crore during the period 2017-18 to 2024-25, according to him.
The Chief Minister said reduction in central financial transfers is placing severe limitations on the ability of the States to invest in physical and human infrastructure, adding, this issue must be addressed urgently.
"Economically advanced States are committed to supporting poorer States, but this should not come at the expense of their own residents or economic efficiency," Siddaramaiah said. "A larger proportion of resources generated by the States should be shared with them."
He requested the Commission to take a bold view and approach, whereby equity considerations are balanced with sufficient reward for efficiency and performance.
Karnataka recommends that 60 per cent of contribution of a state to the divisible pool, for inter se allocation among states, should be given to that state, Siddaramaiah said.
Karnataka, the Chief Minister said, has been central to India's growth story, adding, it contributes approximately 8.4 per cent to the national GDP with only about five per cent of the population. The State ranks second in total GST contribution to the country.
Despite Karnataka's substantial contribution of about Rs four lakh crore to the Gross Tax Revenue of the Union every year, the state gets about Rs 45,000 crore in the form of devolution and about Rs. 15,000 crore grant-in-aid.
"This means that for every rupee Karnataka contributes, only 15 paise is returned to the state," he pointed out.
The Chief Minister said Karnataka requires greater devolution by the Centre as it faces regional imbalances, especially in the Kalyana Karnataka region, and the challenges of urbanisation.
Bengaluru, Siddaramaiah said, needs an investment of Rs. 55,586 crore over the next five years out of which the State requested for a grant of Rs 27,793 crore.
Similarly, for the equitable development of the Kalyana Karnataka region, the State is investing Rs 25,000 crore and requested a matching grant of Rs.25,000 crores over five years from the 16th Finance Commission.
To ensure effective disaster mitigation and timely relief and rehabilitation measures in the highly vulnerable region of Western Ghats, the State requested a grant of Rs.10,000 crore.
According to him, the 15th Finance Commission’s award reduced Karnataka’s share sharply from 4.713 to 3.647. This has led to a loss of Rs. 68,275 crore during the five-year period from 2021-26, he said.
The Finance Commission was conscious of the drastic cut Karnataka received and recommended state specific grants of Rs.11,495 crore, the Chief Minister said, adding, the Government of India, however, has not accepted the recommendation.
"So, Karnataka was deprived of these grants as well. The total of all the losses amount to Rs 79,770 Crores during the 15th Finance Commission period,", Siddaramaiah said.
Karnataka, he said, has seen a revenue transfer of Rs 35,000-40,000 crore per year to other States, amounting to 1.8 percent of its GSDP, during the 15th Finance Commission period.
"The figure is astounding because the net transfers outside of Karnataka amount to about 50 to 55 percent of the total revenues it generates."
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Rahul Gandhi sends gift to barber shop in Raebareli who trimmed his beard during campaign
Raebareli (UP) (PTI): Rahul Gandhi has sent a gift after almost three months to the barber's shop here, where he got his beard and hair trimmed during the Lok Sabha election campaign.
Barber Mithun has expressed happiness after receiving the gift.
Rahul Gandhi, Leader of Opposition in the Lok Sabha and Congress MP from Rae Bareli parliamentary seat, had attended a public meeting in Lalganj on May 13 during the Lok Sabha election campaign. While leaving, Gandhi stopped at barber Mithun's shop in Brijendra Nagar and got his beard trimmed.
Mithun on Friday said that Rahul Gandhi had talked to him for a long time.
"After more than three months, suddenly on Thursday, a vehicle stopped near my shop. Two people unloaded two chairs, a shampoo chair, inverter set, etc. from that vehicle and handed them over," Mithun said.
Mithun was told that these goods were sent by Rahul Gandhi, a party office bearer said, and added that Mithun was happy at this and expressed gratitude towards Gandhi.
Spokesperson of UP Congress Anshu Awasthi said, "Rahul Gandhi always meets different sections of the people, understands their needs and their work on the ground. During the Lok Sabha elections, Rahul Gandhi got his hair and beard trimmed at Mithun's salon in Lalganj, Raebareli."
"Rahul Gandhi sent Mithun the barber the things he needed for his work, including a shampoo chair, two hair-cutting chairs and an inverter battery. He does this work, so that people in politics, the social sector and Congress leaders and workers also promote this kind of support and encouragement. It is a matter of pride for us," Awasthi said.
The president of the district Congress unit of Raebareli, Pankaj Tiwari said, "The information about the goods being sent by the MP was received through social media. If the goods have arrived, then it is a very good thing."
Earlier, on July 26, Rahul Gandhi had made an unscheduled surprise visit to Ram Chet's shop in Vidhayak Nagar on the outskirts of Sultanpur on his way back to Lucknow from Sultanpur after appearing in a district court in connection with a defamation case.
A day after Leader of Opposition in Lok Sabha Rahul Gandhi made a brief halt at his shop, cobbler Ram Chet on July 27 got a sewing machine from the Congress leader.
During the Loksabha election campaign, @RahulGandhi Ji visited a local salon in Raebareli and got a haircut from Mithoon.
— Shahrukh Khan Kayamkhani (@Shahrukh_NSUI_) September 13, 2024
Now, he has sent a shampoo chair, 2 hair cutting chairs and 1 inverter for his shop.
Jan-Nayak for a reason 👏🏻 pic.twitter.com/sYhiJ0nNSx
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