Karnataka Chief Minister Siddaramaiah has reached out to his counterparts in eight states calling for a joint discussion on what he describes as the unfair devolution of taxes by the Union government. In his letter to the Chief Ministers, he proposed a conclave in Bengaluru to discuss the issue, said an official on Thursday.
In his letter to the CMs of Kerala, Tamil Nadu, Andhra Pradesh, Telangana, Maharashtra, Gujarat, Haryana, and Punjab, Siddaramaiah highlighted that states with higher per capita Gross State Domestic Product (GSDP), like Karnataka, are being unfairly penalised for their economic performance, receiving disproportionately lower tax allocations.
He argued that this approach undermines cooperative federalism and threatens the financial autonomy of progressive states.
Siddaramaiah pointed out that previous Finance Commissions have overemphasised equity at the expense of efficiency and performance, resulting in economically strong states receiving progressively smaller shares of central fiscal transfers.
“As the 16th Finance Commission begins its deliberations, there is an urgent need to reassess the tax devolution formula,” Siddaramaiah said in his letter.
“States with significant contributions to the country’s GDP and gross tax revenue deserve a fairer share in fiscal transfers,” he said.
“I look forward to a collective dialogue to advocate a formula that supports growth and better tax mobilization,” he added.
The Karnataka Chief Minister noted that specific dates for the conclave would be shared once they are finalised. UNI BDN RC
