(MENAFN- IANS) Bengaluru, Jan 31 (IANS) While placing key demands in the Union Budget for 2025-26, the Karnataka Chief Minister Siddaramaiah said on Friday that states should not be treated merely as revenue-generating units; instead, the central government must respond to their financial difficulties with empathy.
The Chief Minister in a statement stated that key demands from the state have been submitted to Union Finance Minister Nirmala Sitharaman for inclusion in the 2025-26 Union Budget on behalf of Karnataka State.
CM Siddaramaiah said the discriminatory approach of the central government towards Karnataka is well known.
For our federal system to be strong, the central government must adopt a fair, transparent, and non-discriminatory policy, he advised.
The distribution of resources, including tax shares, should be based on scientific criteria, he urged.
Particularly, the development priorities of leading states like Karnataka must be recognised, and resource allocation should be more favourable towards them. Addressing their demands positively will benefit the nation as a whole, as the progress of these states contributes to the overall growth of the country, he claimed.
"In this context, our government has consistently brought to the Centre's attention the repeated injustices Karnataka has faced and has been pressing for their resolution. Ahead of the Union Budget presentation on February 1, 2025, we had already submitted our list of demands to the central government," the CM said.
The key demands included, "Karnataka is being denied its rightful share from the cess and surcharges collected by the central government. The share of cess and surcharges in total taxes has increased from 8.1 per cent in 2010-11 to 14 per cent in 2024-25, reducing Karnataka's tax share. Additionally, central assistance grants are decreasing yearly. Hence, cess and surcharges should either be abolished or added to the total tax pool and distributed among states," he stated.
The service tax limit has remained unchanged since 1985. Given economic growth over the years, a constitutional amendment is necessary to increase the maximum service tax limit, the CM maintained.
The central government owes Karnataka Rs 2,461.49 crore under the Minimum Support Price (MSP) scheme. Since the state government has already paid farmers from its treasury, this pending amount must be released immediately, CM Siddaramaiah asked.
In 2023, 223 out of 236 taluks in Karnataka faced drought, affecting 48 lakh hectares and causing a loss of Rs 35,162 crore. Despite seeking Rs 18,171 crore in relief, Karnataka received only Rs 3,454 crore from the NDRF. Further, Bengaluru suffered heavy losses due to floods in 2024, but no assistance has been provided yet.
The National Disaster Response Fund (NDRF) and State Disaster Response Fund (SDRF) allocations to Karnataka have been consistently unfair. The NDRF process must be reformed to ensure transparent and timely relief allocation, with criteria revised to better support drought-affected states, the CM said.
Railway projects, though under the Union List, impose a heavy financial burden on state governments. Karnataka currently bears the full cost of land acquisition and 50 per cent of construction costs. This should be revised so that the central government covers the full construction cost and half the land acquisition cost, CM Siddaramaiah stated.
The Mahadayi Kalasa Nala project, approved in March 2023 at Rs 995.30 crore, is stalled due to Goa's objections over 26,925 hectares of forest land. The National Wildlife Board (NBWL) and National Tiger Conservation Authority (NTCA) must expedite approvals. Similarly, the Banduri Nala diversion project, requiring 28 hectares of forest land, must be approved without delay, he demanded.
The Krishna Water Dispute Tribunal allocated 173 TMC of water to Karnataka in 2010. Of this, 130 TMC is planned for the Rs 51,148 crore third-phase Krishna Upper Basin Project. However, the central government refuses to publish the tribunal's verdict in the Gazette due to objections from other states. The Centre must resolve this issue swiftly, CM Siddaramaiah stated.
The Mekedatu project, designed to supply drinking water to Bengaluru and generate 400 MW of power, must receive immediate central approval, he said.
Karnataka's Western Ghats region faces unique environmental challenges. The Centre should allocate Rs 10,000 crore over five years for its development and conservation, CM Siddaramaiah demanded.
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