Karnataka plans fiscal conclave in October
Bengaluru: Karnataka is planning to host a two-day conclave of 10 or more states in the first week of October to discuss fiscal federalism and stir a national debate on devolution, Chief Minister’s Economic Advisor Basavaraj Rayareddi said.
Rayareddi told DH that he wrote to Chief Minister Siddaramaiah on September 4 urging him to decide on the conclave.
A week later, on September 11, Siddaramaiah announced that he had invited his counterparts in Kerala, Tamil Nadu, Andhra Pradesh, Telangana, Maharashtra, Gujarat, Haryana and Punjab to attend the conclave in Bengaluru.
“We are discussing the formation of a reception committee for the conclave. We’re also discussing a committee comprising officials to finalise the agenda for the conclave,” Rayareddi said.
The senior lawmaker said Siddaramaiah will speak with other chief ministers over phone. “After September 20, Revenue Minister Krishna Byre Gowda and I will visit the states to invite CMs,” he said, adding that the government will reach out to more states other than the eight mentioned above.
“The idea behind the conclave is to have a national debate on devolution,” Rayareddi said, pointing out that Karnataka lost heavily when its (horizontal devolution) share in the divisible tax pool dropped from 4.71 per cent in the 14th Finance Commission to 3.64 per cent under the 15th Finance Commission. Rayareddi said Karnataka’s share should be 5 per cent.
Through the conclave, Karnataka will look to bring other states on board the demand for vertical devolution to increase from 41 per cent to 50 per cent.
Another point of discussion at the conclave will be sharing of GST revenues. At present, 50 per cent of IGST collection is shared with the states while it is 41 per cent in the case of CGST. Rayareddi said this must be shared in a 40:60 ratio in favour of the states. “Karnataka is in favour of this because the tax collection effort is made by the states. Therefore, the states must get a bigger share,” he said.
Rayareddi expressed hope that more states will attend the conclave. “The ideas that will be discussed at the conclave will benefit the states,” he said.