Karnataka sees marginal rise in tax share under 16th Finance Commission; SDRF and grants for local bodies disappointing, says CM Siddaramaiah

A statement issued by Chief Minister Siddaramaiah noted that the tax share for Karnataka under the 14th FC was 4.71 per cent. “This had dipped to 3.64 under 14th FC, resulting in a 23 per cent loss. Due to this reason, we had petitioned the 16th FC that the injustice could be addressed if Karnataka’s share was more than what it received under the 14th FC. We submitted memorandums (to 16th FC) after multiple rounds of discussion. However, we did not get the release we expected,” he said.

The allocation under 16th FC was still 14.1 per cent lower than the allocation under 14th FC, the statement said.

According to the 16th FC report, total allocation under SDRF for the five-year period from 2026-27 to 2030-31 is Rs 5,135 crore. In contrast, Maharashtra will be eligible to receive Rs 23,697 crore under SDRF, Uttar Pradesh Rs 12,256 crore and Bihar Rs 10,891 crore.

Similarly, under the State Disaster Mitigation Fund (SDMF), allocation for Karnataka is Rs 1,284 crore, compared to Rs 5,921 crore for Maharashtra, Rs 3,064 crore for Uttar Pradesh and Rs 2,723 crore for Bihar.

In terms of grants for Urban Local Bodies (ULBs) and Rural Local Bodies (RLBs), Karnataka will receive around Rs 37,372 crore for the five-year period. Whereas ULB and RLB grants for Uttar Pradesh are Rs 1.16 lakh crore for the said period.

Siddaramaiah said that allocation under SDRF, ULB and RLB grants was below expectations. “We had sought special grants for irrigation projects, development of Kalyana Karnataka, Bengaluru, Malnad and the coastal region. There are no recommendations regarding the same,” the CM said.

The state government had requested the FC to increase the total divisible pool of taxes for states from 41 per cent to 50 per cent (of taxes collected), apart from Rs 27,093 crore for Bengaluru’s development. “It is unfortunate that the FC did not honour these demands,” the CM added.