‘Centre collected Rs 6 lakh crore in cess and surcharge, but not a paisa shared with states’, says Karnataka CM Siddaramaiah

Karnataka Chief Minister Siddaramaiah accused the Centre of ignoring the state’s demand to treat cess and surcharges collected from the state as part of the divisible pool, saying Sunday's Union Budget did not address the issue despite the state flagging it to the 16th Finance Commission.

Karnataka CM Siddaramaiah accuses Centre

In his reply to the discussion on the motion of thanks to the governor's address on Monday in the assembly, Siddaramaiah said the Central government collected a staggering Rs 6 lakh crore in cess and surcharges, but did not share a paisa with the states.

He said Karnataka's loss from GST revenue since 2022 was around Rs 18,000-20,000 crore annually, which totalled to Rs 75,000-80,000 crore in four years.

The Minister also reiterated that Karnataka was not given the Rs 11,495 crore recommended by the 14th Finance Commission.

CM Siddaramaiah said Karnataka's share in devolution fell from 4.7% under the 14th Finance Commission to 3.6% under the 15th. He claimed that it resulted in a loss of Rs 1.2 lakh crore over five years.

He urged all state representatives to question the funding cut and added that if Karnataka paid Rs 4.5 lakh crore in taxes, it received only Rs 55,000-60,000 crore in return.

"The central govt collected higher GST for eight years and then suddenly reduced it because of the Bihar election. Karnataka lost Rs 12,000 -15,000 crore in GST revenue, affecting seven crore Kannadigas," he said.

"The governor is basically a good person. We are not against him, we are against the central govt. Article 176 mandates the governor read the speech,” Siddaramaiah said.

“But he did not read it. If he had read the full speech, people of Karnataka would have learnt of the injustice the Centre has meted out to the state,” he added.

Siddaramaiah said that the speech was only about "injustice from the Centre" and insisted the government had not used any unconstitutional words.

On allegations of price hikes, the Karnataka Chief Minister said excise duty, stamp duty, registration fee and tax on petrol and diesel were lower compared to other states.

"Even though there have been price revisions in the budget over the past three years, the increase is significantly lower compared to other states. The allegation of excessive taxation is far from the truth," he said.

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