Centre short-changing Karnataka: Siddarmaiah

The central government has short-changed Karnataka by reducing its share of financial support to some of its schemes and dropping other schemes, Chief Minister Siddaramaiah said on Saturday.

"Though the central government claimed that more funds would be allotted to states on the recommendation of the 14th Finance Commission, the union budget for the new fiscal (2015-16) has reduced the financial support to its welfare and social schemes," Siddaramaiah told reporters here.

A day after presenting the state's budget for ensuing fiscal (FY 2016), he said while the central government gave an impression that states would hugely benefit from devolution of funds, it had drastically reduced its share of resources to Karnataka.

"Centrally-sponsored schemes like JNNURM and Backward Regions Grants Funds have been dropped while budgetary share has been reduced to some social schemes like drinking water supply, agriculture, nutrition and child development (mid-day meal) and the Integrated Child Development Services (ICDS)," Siddaramaiah said.

The Jawarharlal Nehru National Urban Renewal Mission (JNNURM) was one of the previous UPA government's flagship progarmmes, launched to help states improve civic amenities in tier-one and tier-two cities across the country.

Ironically, budgetary support to the NDA government's flagship programme "Swachh Bharat" (Clean India) has been pruned for the ensuing fiscal.

"As a result, we will get Rs.7,031 crore instead of Rs.11,721 crore as our share of central grants for its schemes. Though we spend Rs.16,245 crore on its schemes as our share every year, we have to make up for the Rs.4,690-crore budgetary gap in the ensuing fiscal," said the chief minister.

Observing that the central government would give from one hand only to take away from other hand, Siddaramaiah said the state had to increase its share of funding in most of the central sector schemes, negating the benefit of higher devolution.

The 14th Finance Commission, headed by former Reserve Bank of India governor Y.V. Reddy, had recommended increasing the share of the central devolution to the states to 42 percent from 32 percent.

"The dual policy of the central government will result in a net loss of Rs.1,987 crore for the state in the ensuing fiscal," Siddaramaiah said.

The chief minister also objected to the finance panel's recommendation based on the methodology of the central statistical organisation (CSO) in estimating the gross state domestic product (GSDP), as it had undervalued the contribution of the robust IT (information technology) sector in the state's growth.

"The gross value added (GVA) of the booming IT sector in the state has been assumed by the CSO at 15-16 per cent in contrast to the state's 33-35 percent share of software exports. The CSO's methodology has affected our borrowing capacity as a proportion to the GSDP," Siddaramaiah said.