Bengaluru, April 1 Karnataka Chief Minister Siddaramaiah launched a scathing attack on the Centre on Wednesday, questioning whether its financial policies towards the state amounted to "tax terrorism or tax plunder".
Launching a tirade against the union government, he alleged that it returns only 15 paise against every rupee contributed by the people of the state.
He charged that BJP leaders from Karnataka opted to speak against the state government instead of supporting it.
“For every one rupee contributed by Kannadigas in taxes, the Union Government returns only 15 paise. Should this be called tax terrorism or tax plunder? Do BJP leaders in the state have the courage to answer this?” asked Siddaramaiah.
In a statement, the Chief Minister said that in the last financial year, the Centre collected over Rs 4.50 lakh crore from Karnataka through taxes, cess, and surcharges. In return, the state received only Rs 79,000 crore.
He recalled that over the past three years, the Congress government in Karnataka repeatedly raised this injustice with the Centre.
“We have even protested in Delhi, voicing our concerns in front of Parliament. At that time, BJP leaders like former CM Basavaraj Bommai and the leader of opposition in the Karnataka Assembly, R Ashoka remained silent, failing to stand up for the interests of seven crore Kannadigas. Today, they choose to speak against us,” Siddaramaiah said.
He underlined that Karnataka has emerged as a leading state in GST performance and ranked second in total GST collections, first in growth rate, recording a 17 per cent increase.
Yet, despite this strong contribution, the state receives only about 52 per cent in return, the Chief Minister said, adding the "flawed and unscientific implementation" of GST has resulted in significant financial losses for Karnataka, amounting to thousands of crores of rupees.
“The Union Government has further weakened the state’s financial position by denying our rightful share under the 15th Finance Commission, not sharing cess and surcharge revenues, failing to compensate GST losses, and underfunding centrally sponsored schemes. This has forced Karnataka into a situation where borrowing becomes unavoidable,” Siddaramaiah alleged.
According to him, if Karnataka receives its fair share in tax devolution, GST compensation, and adequate funding for centrally sponsored schemes, the state can manage its finances without borrowing even a single rupee.
He questioned whether the BJP leaders were willing to accept this challenge.
Karnataka is the second-largest contributor of taxes to the Centre after Maharashtra, Siddaramaiah pointed out and said despite consistently contributing more to the nation’s wealth, the state’s rightful share has steadily declined over the years.
The CM accused the BJP leaders, who exaggerate Karnataka’s borrowing, of conveniently "ignoring" the growing debt burden imposed by the Centre on every Indian.
"When Prime Minister Narendra Modi took office in 2014, the national debt stood at Rs 51.06 lakh crore. By the 2026–27 Budget, it has risen to Rs 214 lakh crore. This amounts to an average debt burden of around Rs 1.5 lakh per citizen," Siddaramaiah said.
“This burden also falls on the seven crore people of Karnataka - a fact that leaders like Bommai and Ashoka would do well to acknowledge before making statements.”
Siddaramaiah had on Tuesday criticised State BJP president B Y Vijayendra's demand for a "white paper" on the government's finances, calling it a reflection of his poor understanding of economics and political maturity.
He said the allegation that the state is bankrupt stems from the "helplessness, frustration, and jealousy" of BJP leaders who are unable to confront his government politically.
In response, Vijayendra on Wednesday said presenting a long-term budget is not the same as issuing a white paper, nor is it an achievement.
“Your real ‘achievement’ is pushing the state into a debt trap. You appear to have been completely unsettled by my demand to release a white paper on the state’s financial condition,” the BJP state chief said in a post on ‘X’.