Karnataka Chief Minister Siddaramaiah met with 16th Finance Commission Chairman Arvind Panagariya on Friday, demanding a larger allocation for the state from the central tax pool for the five-year period beginning April 1, 2026.
“The meeting was very cordial and the chairman was very receptive to our demands. I have submitted an additional memorandum seeking higher allocation to the state from the central tax pool,” Siddaramaiah told reporters after the meeting.
The chief minister also demanded that if the centre’s collection of cess and surcharge crosses more than 5 per cent then it should come under divisible pool.
“The Centre collects cess and surcharge on various commodities. We don’t have a share in it. It is kept by the government of India. If they collect more than 5 per cent it should come under the divisible pool,” he said.
He said the commission is a constitutional body and requested the chairman not to do injustice to any state.
The CM said Karnataka’s share of central tax revenues dropped significantly under the 15th Finance Commission (2021-26) to 3.64 per cent, down from 4.71 per cent during the 14th Finance Commission period (2015-20).
The overall share allocated to all states from central taxes was reduced to 41 per cent for 2021-26, as against 42 per cent in the previous cycle, primarily due to the creation of Union Territories of Jammu and Kashmir and Ladakh.
This resulted in both a percentage and absolute decline in Karnataka’s tax allocation.
The chief minister was accompanied by Chief Secretary Shalini Rajneesh, Principal Secretary of Finance Ritesh Singh, and other state officials.
The 16th Finance Commission, established in December 2023, is tasked with recommending tax revenue distribution between the central government and states for 2026-31. The commission is currently conducting consultations and must submit its recommendations by October 31, 2025.
Source form: https://money.rediff.com/news/market/karnataka-demands-higher-central-tax-share/28464720250613
