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"So, as long as there are set rules for it I don't see any issue in states having their flags," Tharoor said in Bengaluru in an address.
"There should be clear rules that flag of states cannot be [a] substitute of a national flag and it should be smaller and fly lower," he added.
The Karnataka government constituted a nine-member committee to submit a report on the possibility of designing a separate flag for the state.
Journalist-writer and president of Karnataka Vidyavardhaka Sangha, Dharward, Patil Puttappa and social worker Bheemappa Gundappa Gadada had submitted a representation to the government, following which the committee was constituted.
They had urged the government to design a separate flag for Kannada 'naadu' and accord statutory standing for that.
Earlier on Tuesday, Karnataka Chief Minister Siddaramaiah defended the demand for a separate flag for the state, asking if there is any provision in the Constitution that prohibits the state from having its own flag.