K'taka CM seeks special central funding for Bengaluru

Bengaluru: Chief minister HD Kumaraswamy on Tuesday sought special funding from the Centre for Bengaluru considering its growth.
In his interaction with the Fifteenth Finance Commission’s chairman NK Singh, the CM urged the commission to consider certain state-specific requests. He called for upgradation of facilities in urban local bodies in view of the increasing urbanisation due to migration from rural areas.

“In fact, Bengaluru city alone is continuously growing and requires substantial amount of funding year on year. The city plays an important role in employment generation for the country and is a growth engine for the national economy and therefore merits special funding,” the CM told Singh.

The base tax rates in the VAT regime in Karnataka, Kumaraswamy said, were much higher and today on account of reducing the GST rates for several items, the actual tax collection for Karnataka has been affected adversely.

“I urge the commission to recommend to the central government to continue the compensation for another five years beyond 2022 or at least protect the compensation level of the year 2022 for an additional five years,” he said.

In a memorandum, the CM said: “The commission must ensure that once the sharing formula is decided, the central government should not reduce the funding under the centrally sponsored schemes both in terms of size as well as in the sharing pattern between the Centre and the state. During the past five years we have seen that while on the one hand the Fourteenth Finance Commission has increased the devolution to states from 32% to 42%, the central government, on the other hand, reduced its share in centrally sponsored schemes. As a result, most of the additional money received under the devolution formula had to be allocated towards states' share of the CSS schemes.”