Karnataka Faces ₹10,000–₹15,000 Crore Revenue Loss
Karnataka is set to lose between ₹10,000 crore and ₹15,000 crore due to the recommendations of the 16th Finance Commission, Chief Minister Siddaramaiah said. He stated that the proposed changes to tax devolution would reduce the state’s share compared with earlier expectations.
Impact on Development Spending
The Chief Minister said the reduction would put pressure on state finances, affecting spending on development projects and welfare schemes. He argued that Karnataka’s contribution to the national economy and its fiscal discipline were not adequately reflected in the revised sharing formula.
Centre–State Fiscal Debate
Siddaramaiah criticised the approach taken in finalising the recommendations, saying they could widen regional imbalances and penalise better-performing states. He added that Karnataka would raise its concerns through appropriate constitutional and political channels. The Finance Commission’s recommendations determine how central tax revenues are distributed among states for the coming years.
The issue has renewed debate on fiscal federalism, with several states expressing concern over changes in tax devolution and resource allocation.
