Union FM Nirmala Sitharaman asserts timely payments in response as Karnataka Govt approaches Supreme Court for drought relief.
Union Finance Minister Nirmala Sitharaman stated on Sunday that all funds owed to Karnataka by the Union Government were paid on time, responding to Chief Minister Siddaramaiah’s plan to approach the Supreme Court regarding a “five-month delay” in releasing drought relief funds. As Karnataka’s representative in the Rajya Sabha, Sitharaman refuted the state’s allegations of financial discrimination by the central government, during a session held by the Thinkers Forum in Bengaluru.
She clarified, “The assertion that a special grant of Rs 5,495 crore for Karnataka was withheld is entirely unfounded. The final report of the Finance Commission did not endorse any such special grants.”
Sitharaman further mentioned that Karnataka’s share of the GST collections, amounting to Rs 1.06 lakh crore for the duration from 2017 to 2022, was completely disbursed and no GST compensation was outstanding for the state as of March 2024.
Following the Centre’s failure to respond to their requests for financial assistance from the National Disaster Response Fund (NDRF) for five months, Chief Minister Siddaramaiah and Revenue Minister Krishna Byre Gowda announced their intention to seek the Supreme Court’s intervention on Saturday. “It’s a combined duty of the state and the Centre to assist farmers during disasters. We patiently awaited the Centre’s action for five long months before being compelled to pursue legal recourse,” stated the Chief Minister.
With Karnataka facing severe water scarcity, affecting 223 of its 236 taluks, the state government has requested ₹18,171 crore from the NDRF. According to the Chief Minister, these funds were legally due by November 2023.
As general elections approach, the issue of fund allocation has sparked a dispute between the central government and the opposition-governed southern states. The southern states have criticized the central government’s tax revenue distribution policy through a campaign named “my-tax-my-right” last month. In February, ministers from Karnataka, Tamil Nadu, and Kerala protested in Delhi, accusing the central government of deliberately withholding development and drought-relief funds to target opposition-governed states.
Sitharaman defended the GST system, pointing out the increase in indirect tax collection rates from 11.68% in the pre-GST era to 15% currently. “Opposition claims of exaggerated numbers cannot negate the fact that GST is enhancing state revenues,” she remarked.
Highlighting the federal government’s initiatives, Sitharaman emphasized their beneficial impact on Bengaluru, particularly through direct taxes and investments in sectors like semiconductors, spurred by the “Make in India” campaign.
This comes as Kerala had previously approached the Supreme Court in December, arguing that the central government’s fiscal policies were leading it towards a severe financial crisis.
Source from: https://www.a2ztaxcorp.com/blogs/6602795d3360f45bafee88a2/details