'Separatist mindset': Nirmala Sitharaman refutes Karnataka's 'fund injustice' claim

The Congress is with those who want 'tukde tukde' (divide) of the country, Finance Minister Nirmala Sitharaman said on Wednesday, as she lashed out at the Karnataka government over Chief Minister Siddaramaiah's protest at the Jantar Mantar in Delhi.

Speaking in the Lok Sabha, the Finance Minister also accused the state government of harbouring a "separatist" mindset and spreading a "false narrative" on the issue of funds allocated by the Centre to states.

Listing out a point-by-point rebuttal to the claims made by the Karnataka government, Sitharaman accused Siddaramaiah and his colleagues of making "outrageously false" allegations and said no GST compensation amount was due to the state.

Top Congress leaders from Karnataka, led by Chief Minister Siddaramaiah, on Wednesday, held a protest in Delhi against the Centre over alleged injustice to the southern state in devolution of taxes, sparking a fierce slugfest between the party and the Modi government. The leaders upped the ante with their 'Chalo Delhi' protest at Jantar Mantar just weeks ahead of the Lok Sabha polls.

"These claims come from a separatist mindset. The Congress is with those who want 'tukde tukde' (break) of the country," she said, claiming that the advertisement promotes such a language.

In this context, she also cited the remarks of Deputy Chief Minister DK Shivakumar's brother and MP DK Suresh, who had suggested that "South India may seek a separate country" if the Centre's alleged discrimination continues, to slam the Opposition party.

Sitharaman, who is a Rajya Sabha member from Karnataka, gave out figures of the funds allocated to the state from the Centre to reject the charges. She claimed that the Siddaramaiah government is feeling the heat due to the financial burden of nearly Rs 58,000 crore for the implementation of his party's poll promises.

She said the state government has claimed that the Centre has not given a special grant of Rs 5,495 crore as recommended by the 15th Finance Commission.

"I want to clearly state that the recommendation did not form part of the final report of the 15th Finance Commission. The question of not accepting does not arise at all," the Finance Minister said.

Over and above the recommendation of the Finance Commission, the Centre has, however, provided Rs 6,279.94 crore as an interest-free loan for 50 years to the state.

The Finance Minister also asserted that the devolution of taxes and grants to Karnataka and all other states had been done in line with the Finance Commission award with no discrimination whatsoever.

During the 14th Finance Commission (FC) five-year award period (2015-15 to 2019-20), Karnataka received Rs 1,51,309 crore as tax devolution.

However, in the first four years of the current 15th FC period, Karnataka would have already received Rs 1,29,854 crore by March 2024, she said.

The Centre has projected a further release of Rs 44,485 crore in the Interim Budget for FY2024-25, taking the total to Rs 1,74,339 crore in five years. This is higher than the 14th FC period despite the precipitous drop in revenue during the Covid-19 period, she said.

"In short, despite the exceptional circumstances arising from the pandemic which depressed central revenues, the Government of Karnataka will be getting substantially more as devolution during the first five years of the 15th FC period than in the 14th FC period," she said.

She alleged that to inflate its false claims, the Karnataka government even included shortfalls for the next two financial years.

The Karnataka government's claims on cess and surcharge are "misleading and self-serving", Sitharaman claimed, adding that a large part of the cess collection comprises the GST compensation cess. This cess does not belong to the Centre and goes entirely for the benefit of the states.

She also rebutted the state government's claim that it has suffered huge losses due to the 15th Finance Commission, saying that it is factually "full of errors" and "a politically motivated claim."

Sitharaman said the Karnataka government had projected a massive false claim of GST compensation dues. But in reality, there is no GST compensation amount due to the state.

"The GST compensation period ended in June 2022 and in the first five years of the transition period, we have already given Rs 1,06,258 crore to the state. No amount is due to Karnataka," she added.

On the state government's charge of the allocation of funds for drought relief, Sitharama said the Centre has already allocated the state disaster relief fund (SDRF) and any relief over and above SDRF is released upon submission of a memorandum by the state.

She also said that the Centre has made a budget provision for the Upper Bhadra Project, and it will be sanctioned.

Here's a glimpse of the Finance Minister's speech in the Lok Sabha

On Wednesday, the protesters demanded that the Centre set right the losses to the tune of Rs 1.87 lakh crore allegedly incurred by Karnataka under the 15th Finance Commission.

Siddaramaiah said this protest was not against the BJP but discrimination against Karnataka.

Dismissing the BJP's allegation that the protest was aimed at raking up the north-south divide, he said the Congress wants the country to be united but there should be no discrimination against the southern states.