Bengaluru: After a two-day meeting with representatives of the Karnataka government, the 15th Finance Commission on Tuesday raised concerns over the poverty level in Karnataka and stagnant or negative agriculture growth.
"We were told that poverty rate here is 21 per cent. Considering the per capita income of the state, it should be significantly lower. We expected this to be well below 20 per cent. This represents the classic irony of two different Karnatakas," said Nand Kishore Singh, chairperson of the Commission.
The Commission, however, said that the state had given an exceedingly well articulated and well-argued presentation while raising its concerns and demands.
"Karnataka is among India's most prosperous states contributing close to 8% of GDP. In terms of its performance of multiple developmental parameters, it is an example which other states can emulate. Karnataka was the first to introduce the Fiscal Responsibility and Budget Management even before the country did it," said Singh.
While appreciating the state's initiatives in the agriculture sector, the commission said that the results of the initiatives did not reflect positively in the performance of the sector.
"If we look at Karnataka, for the last 7-8 years agriculture growth is stagnant or slightly shrinking. It is slightly negative at minus 0.3 per cent. Even if they are facing drought, there are other states facing drought more frequently like Rajasthan but their growth rate is 3 per cent. Is there something fundamentally wrong then?" said Ramesh Chand, member of the commission.
The commission stressed on the importance of rain water harvesting and not depending completely on ground water. The state has sought Rs 53,000 crores for a mega project to supply water to all households.
Karnataka placed the issue of revenue post GST implementation before the commission arguing that the state had better avenue in the pre-GST era.
"Karnataka was upfront in pointing out that prior to GST their revenue was high. This has changed after GST. We have received the formal memorandum and one of the points is how purposefully finance commission can engage with GST. What can be done to improve outcome from GST. We had written to former Finance Minister Arun Jaitley and the current Finance Minister Nirmala Sitharaman on the need to have a dialogue between the commission and the GST council," said Singh.
Karnataka Chief Minister HD Kumaraswamy who also holds the finance portfolio said that he was hopeful that the commission will address the state's concerns. "We requested finance commission that whatever we lost during 14th commission, whatever commitment they hadn't fulfilled, we requested them to fulfill it this time. I think they will consider our request," said Kumaraswamy.
The biggest concern during the state's presentation was about depleting water tables.
"They did make a fairly cogent case on the fact that considering their proneness to disasters, particulary drought, and the allocations we have made under the state disaster management fund would deserve a very careful reconsideration. While looking at the overall picture we will certainly ensure this will not escape our attention," Singh added.
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