Urging the Centre to adopt a pro-growth approach in tax devolution among the States by the 16th Finance Commission, Chief Minister Siddaramaiah on Tuesday highlighted the developmental challenges in Karnataka.The Chief Minister, during his meeting with Union Finance Minister Nirmala Sitharaman in Delhi on Tuesday, highlighted the developmental challenges in Bengaluru, Kalyana Karnataka, and Malnad regions, and argued that a fair and pro-growth devolution would accelerate the State’s growth.Special grantsThe State has sought special grants to Bengaluru since it requires ₹1.15 lakh crore to undertake capital work, while grants have been sought for the Malnad region affected by floods. The State has also sought grants for the Kalyana Karnataka region that is covered under the Article 371 J providing special status, but is yet to receive money from the Centre.Claiming that Karnataka has lost a total of ₹80,000 crore during the award period of the 15th Finance Commission, the Chief Minister said that Karnataka’s share in tax devolution declined from 4.713% to 3.647%, while the State was also not allocated ₹11,495 crore of the special grants. A major reason for this, he pointed out, was the over-reliance on the income distance criterion, which received 45% weightage under the 15th FC. “The State government has requested the 16th FC that the weightage for income distance should be reduced by 20 percentage points and reallocated to fiscal contribution, which is the State’s share in the national GDP,” he said.The Chief Minister told reporters in Delhi that his meeting with the Finance Minister followed his earlier meeting with the chairperson and members of the 16th Finance Commission. He said that an additional memorandum has been submitted. “Karnataka’s population constitutes 5% of the country’s population, but the State contributes 8.7% to the GDP, which is third in the country. In GST collection, we are second in the country.”Revenue deficit grantsKarnataka has also requested the Centre to discontinue the Revenue Deficit Grants in their current format since they are against the principles of fiscal discipline as proposed in the Fiscal Responsibility and Budget Management framework. The State has proposed that the same amount — which was 1.92% of the gross union receipts under the 15th FC — should be redistributed among all States using the horizontal devolution formula. The Chief Minister said, “Deficit grants have been given to Kerala and Tamil Nadu also. Give it to all States or remove it.”Published - June 24, 2025 09:26 pm IST