The Karnataka government has renewed its charge that the Central government has shortchanged the state in budgetary allocations, despite Karnataka being one of the highest contributors to India’s GDP and tax revenues.
The Congress-led government argues that while Karnataka generates substantial direct and indirect taxes, it receives disproportionately lower Central funds, affecting spending on infrastructure, education, health and welfare schemes. Ministers claim that the current funding formula penalises economically progressive states.
Officials point out that after the abolition of the Planning Commission, fund distribution is largely guided by Finance Commission norms and the GST framework, which prioritise population and backwardness over contribution. The role of NITI Aayog, the state says, is limited and lacks financial authority.
The BJP has dismissed the allegations, calling the Union Budget inclusive. However, Karnataka maintains that the issue reflects a structural imbalance in Centre–state fiscal relations, keeping the budget row firmly in the political spotlight.
