Nirmala SitharamanUnion Finance Minister Nirmala Sitharaman has dismissed Karnataka’s assertions regarding the withholding of funds by the Centre, describing them as misleading and false. She delivered a scathing rebuke, alleging that the Congress, the state’s ruling party, is trying to fracture the nation’s unity.
Addressing the issue, Sitharaman today told reporters, “Using taxpayers’ money, the government of Karnataka has disseminated full-page national newspaper advertisements. Among the six claims made, two are egregiously false. Firstly, the claim of zero allocation for drought and disaster relief by the Central Government is baseless. In fact, a total of Rs 12,476 crores has been disbursed for disaster management and capital investment combined…
She added, “Secondly, the assertion of a special grant is unfounded, as it was not even part of the final recommendations of the Finance Commission. I must emphasize that these claims stem from a singular mindset – one of separatism – as articulated by the Deputy CM’s brother. Congress is aligning with separatist sentiments today.”
Sitharaman’s remarks allude to comments made by Karnataka Deputy Chief Minister DK Shivakumar’s brother and Congress MP DK Suresh, who recently sparked controversy when he said there was no choice but to demand a “separate country” for South India as the Centre was collecting funds from the South and diverting them to the North.
“Injustice is being done to South India,” said DK Suresh while reacting to the Interim Budget presented by Finance Minister Nirmala Sitharaman on February 1.
Suresh’s statements drew sharp criticism and were perceived as endorsing separatist tendencies.
Highlighting the Centre’s stance, Sitharaman highlighted factual inaccuracies, erroneous financial claims, and selective presentation of losses by the Karnataka government. The Centre contends that Karnataka’s claims, including projected shortfalls for upcoming financial years, are inflated and lack substantive basis. Even according to these purportedly inflated figures, the actual tax devolution percentage has reportedly increased since 2015-16, contradicting Karnataka’s allegations of mistreatment by the Centre, she said.
The Congress, which assumed power in Karnataka last year, has echoed grievances voiced by states, such as West Bengal, regarding perceived fiscal disparity and inadequate returns from the Centre.
Earlier this month, the Karnataka Congress released figures asserting that despite Karnataka’s significant role as one of the key drivers of India’s economic growth, it receives minimal returns. Karnataka Congress spokesperson M Lakshmana said while Karnataka’s contribution under corporate and other taxes was to the tune of ₹ 2.25 lakh crore for 2023-24, it could only expect ₹ 37,252 crore by way of tax devolution.
The ongoing dispute underscores broader tensions between non-BJP state governments and the Centre over resource allocation and fiscal autonomy, reflecting underlying political dynamics and economic concerns.