Karnataka to be the worst-affected state under Modi govt’s tax sharing formula

News Network
February 5, 2020

Bengaluru, Feb 5: Despite installing a BJP government in Karnataka through disguised operation Kamala, the Prime Minister Narendra Modi-led union government has continued its step motherly attitude towards this south Indian state.

Under the new formula adopted to share central taxes among states Karnataka will be the worst-affected. Though the 15th Finance Commission has recommended a special grant of Rs 5,495 crore for the state for 2020-21, the Centre appears reluctant to pay up and instead has asked for the proposal to be reviewed.

During the Union budget, the report of the 14th Finance Commission headed by NK Singh for 2020-21 was tabled in Lok Sabha. It shows besides Karnataka, Telangana, Mizoram and Kerala saw their central tax share decrease, while Uttar Pradesh, Bihar and Maharashtra were top gainers.

Karnataka's share has decreased from 4.7% provided by the previous finance commission, to 3.6%. Acknowledging there is a steep decline in Karnataka's share from 2019-20, the finance commission has recommended a special grant of Rs 5,495 crore for the state.

Its share in 2019-20 was Rs 36,675 crore, but under the new formula, Karnataka will get only Rs 31,180 crore in 2020-21 from the divisible pool of Rs 8.5 lakh crore - a decline of 22.5%.

Also, the decrease for Karnataka comes on the back of a shortfall in 2019-20. While the state was entitled to Rs 39,806 crore from the divisible pool, it got only Rs 36,675 crore as the Centre suffered a tax revenue shortfall of Rs 1.5 lakh crore.

What is more disheartening though is the Centre's refusal to pay the special grant. Instead, the Union finance ministry has asked the finance commission to reconsider the recommendation. This has prompted the state to take up the issue with the Centre.

"The decline in central taxes devolution comes at a time when the state is going through a tough financial situation. Steps are being taken to ensure Karnataka gets justice," said chief secretary TM Vijay Bhaskar.

Officials said besides corrective measures for 2020-21, the focus will be on ensuring a fair share in subsequent years. However, Karnataka has little chance of getting its dues as the Centre is known to be prudent when distributing tax proceeds among states.

"The Centre has certain views on devolution. We have done our duty by submitting the interim report. It's up to the states to convince the Centre," said Ravi Kota, joint secretary of 15th Finance Commission.

Under the new formula, the commission changed the weightage for some of the six criteria it considers - population, area, forest cover, income distance, demographic performance and tax effort.

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News Network
March 15,2025

Mangaluru: Parents in coastal Karnataka are facing a significant financial burden as private schools across the region have implemented a sharp 20% or higher fee hike for the new academic year. This marks a drastic increase compared to the 6-15% annual hikes over the past four years. Schools justify the rise by citing increased teacher salaries and rising operational costs.

A parent from a CBSE school in Moodbidri reported that last year, his child's school fee was Rs 23,000, excluding transport and books. This year, it has jumped to Rs 29,000. "Fees for all classes in our school have been hiked by Rs 6,000," he shared.

Similarly, Jean D'Souza, whose two children study at an ICSE school in Mangaluru, said the school has increased fees by Rs 5,000 this year, from Rs 46,000 to Rs 51,000. Another parent from an ICSE school on the outskirts of the city reported a 20% hike and urged the government to intervene and regulate school fee increases.

Additional Costs Add to Parents’ Burden

Parents highlighted that beyond tuition fees, they also bear expenses for transport, uniforms, and books. Monthly transport fees range between Rs 1,500 and Rs 2,500, while book costs amount to Rs 5,000 to Rs 6,000 per child annually. However, some relief comes from schools allowing fee payments in installments. "Many schools permit two to four installments, which helps ease the financial strain for parents," said a school management representative.

Schools Defend the Fee Hike

A school principal explained the reasons behind the steep fee increase this year. "Most schools refrained from major fee hikes after the pandemic. However, teacher salary demands have increased, and with a shortage of trained educators, retaining them is difficult without annual pay raises," he said.

Other rising costs include electricity, water, building maintenance, government fees, and general operational expenses. School managements argue that these factors make the fee hike necessary to sustain quality education.

While parents express frustration over the rising costs, the debate over striking a balance between affordability and sustaining quality education continues. Many now call for government intervention to regulate private school fee structures, ensuring that education remains accessible to all families.

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News Network
March 21,2025

Bengaluru: The Karnataka Assembly on Friday passed Bills doubling the salaries of the chief minister, ministers, and legislators, adding an annual burden of ₹62 crore on the exchequer.

The CM's monthly salary will increase from ₹75,000 to ₹1.5 lakh, while ministers will see a 108% hike, from ₹60,000 to ₹1.25 lakh. MLAs and MLCs will get ₹80,000 per month, up from ₹40,000, and their pension will rise from ₹50,000 to ₹75,000.

The Karnataka Ministers Salaries and Allowances (Amendment) Bill and the Karnataka Legislature Salaries, Pensions and Allowances (Amendment) Bill were passed without debate, as the Opposition BJP protested in the well of the House.

The Bills cited the rising cost of living as justification for the hike. The Assembly Speaker and Legislative Council chairperson will now receive ₹1.25 lakh per month, up from ₹75,000.

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News Network
March 18,2025

Mangaluru: The Bharatiya Janata Party (BJP) has strongly criticized the Karnataka government's decision to reserve 4% of government contracts for Muslims, calling it an unconstitutional move that promotes division in society. Dakshina Kannada MP Captain Brijesh Chowta reaffirmed the party’s commitment to challenging this policy both legally and politically.

Speaking to the media, Capt. Chowta stated that Dr. B.R. Ambedkar had introduced reservations specifically for Scheduled Castes (SC), Scheduled Tribes (ST), and Other Backward Classes (OBCs) to uplift marginalized communities. He accused Chief Minister Siddaramaiah of misusing the concept of AHINDA politics to cater to specific organizations rather than working for the welfare of all backward communities in Karnataka.

“The Congress government’s decision is an unconstitutional and religion-based move aimed at appeasement politics. It is a betrayal of backward communities and a clear attempt to divide society along religious lines,” said Capt. Chowta. He further asserted that the BJP would not remain silent and would oppose the decision at every level.

The BJP plans to file a writ petition in the High Court seeking to overturn the government's move, which it believes is a calculated effort to gain religious vote banks. Capt. Chowta also condemned the government’s allocation of Rs 1,000 crore under the "Minority Colonies Development Fund" in the state budget, arguing that such policies undermine the principles of equality enshrined in the Constitution.

He emphasized that the Supreme Court has repeatedly ruled against religion-based reservations and reiterated that Dr. Ambedkar himself opposed such policies during the drafting of the Constitution. “Previous attempts to introduce religion-based reservations in other states have been struck down by courts, yet the Siddaramaiah government continues to push its vote-bank agenda. We will fight until this unconstitutional decision is revoked,” he added.

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