Karnataka govt’s claims on ‘special grants’ utterly false, says Nirmala Sitharaman

MYSURU: Union Finance Minister Nirmala Sitharaman has termed the claims of the Congress goverment in Karnataka over Rs 5,495 crore ‘special grants’ as “utterly and totally false”.

Speaking at an interaction organised by the Thinkers Forum at the convention hall of the Karnataka State Open University (KSOU) on Sunday evening, the minister said that the Finance Commission, in its final report, did not recommend any such ‘special grant’. “To repeatedly say it was recommended by the commission but you (BJP government) did not accept it, you are an MP from Karnataka and you are doing injustice, I’m sorry, it’s totally false”.

Further, she said the 12th Finance Commission recommended 30.5 per cent as shareable with states, the 13th Finance Commission recommended 32 per cent, but the Congress leaders did not speak anything. “The 14th Finance Commission report, which was submitted after 2014, recommended 42 per cent. Prime Minister Modi agreed and accepted it and is following it till today. Under the 15th Finance Commission, after J&K and Ladakh became Union Territories, the shareable came down to 41 per cent. But when they were getting far lesser earlier, no one made any noise”, she said.

As regards GST collections, the Union Finance Minister said, “The GST rates, formulation and payments are decided in the GST council where the finance minister of Karnataka and other states are the decision-makers. An attempt is being made by the current government in Karnataka to say GST itself is wrong, which is what their ever-launching young neta keeps saying as ‘Gabbar Singh Tax’. The Congress wanted to introduce it when Pranab Mukherjee was Finance Minister, but could not as no state government trusted them. But because the tireless efforts of Arun Jaitley ji and Prime Minister Modi, it got introduced in 2016 and is running successfully till today”.

Nirmala Sitharaman pointed out that indirect tax collection is increasing every month. “It is not because the rates are being increased on any one item, but because of efficiency in collection, cutting down on evasion and plugging loopholes, making more people come on board and become part of the tax net”.

“Every penny, every paise due to Karnataka is given and given on time. Tax devolution is done as per a formula given by the Finance Commission. Tax devolution has increased under Prime Minister Modi between 2014 and 2024 by 258 per cent, which is 3.5 times more compared to the 10 years during the UPA. Grants-in-aid has increased 273 per cent, which is 3.7 times more than what is was previously”, the minister noted.

The Union minister said that between 2004-14, the money received by the state per year was Rs 81,795 crore under tax devolution. Between 2014 and February 2024, this amount has gone up to Rs 2, 93,226 crore. “To be wrongly accused of not being given money that is due to Karnataka, I’m sorry, please look at the figures. To mislead the people is not being responsible at all”.

As regards grants-in-aid, Nirmala Sitharaman said that betwee, 2004-14 it was Rs 60,779.84 crore which rose to Rs 2,26,832 crore between 2014-24. “The state government should not mislead the people of Karnataka. After Covid, Prime Minister Modi instructed that interest-free funds for 50 years be allotted to states to spend on ongoing infrastructure work, create more infrastructure. Under this category, Karnataka received Rs 7,130 crore since 2020-21.