From Our Special Correspondent
Daijiworld Media Network

Bengaluru, Aug 26: Chief Minister Basavaraj Bommai has urged Union Finance Minister Nirmala Sitharaman to extend the GST compensation to States by another 3 years and also enhance the Central Grants to the State under the 15th Finance Commission.

The Chief Minister, who called on Sitharaman in Delhi on Thursday, sought to impress upon the Union Government the plight of poor revenue mobilisation by State Governments which had been severely affected by the Covid pandemic and the various lockdowns and said it would take a few years for normalcy to return.

The only alternative to rescue the States is extending the GST compensation payable to the State Governments by another 3 years, he said.

Bommai pointed out that the grants to the State has come down from 4.71% under the 14th Finance Commission to 3.647% under the 15th Finance Commission award for the period of 2021 to 2026.

The demand of the State Government for changing the norms for allocating grants under the Central devolution of funds has not been accepted by the Finance Commission. This anomaly in the sharing of funds from the Consolidated Funds of the country has resulted in a big loss to Karnataka even when compared to other southern states, he said.

Under the State specific recommendation, the 15th Finance Commission has allocated a grant of Rs 6,000 crore towards the augmentation of water resources in Bengaluru and the Peripheral Ring Road. However, in the Explanatory Memorandum to the Union Government, the Finance Commission has not included the recommendation. "This has resulted in further reduction of the already lesser devolution of grants to the State from the Consolidated Fund,’’ he said and urged the Minister to set right the discrepancy.

The Chief Minister Karnataka was contributing a lot to the country’s economy through Information Technology and Start-Up ventures with Bengaluru emerging as the IT and Start-Up Capital.

Naturally, Bommai said development of Bengaluru’s infrastructure would help in attracting larger investment and urged the Union Finance Minister to release larger allocation of funds for improving Bengaluru’s infrastructure facilities.