Karnataka Chief Minister Siddaramaiah has addressed a letter to the Chief Ministers of eight states, expressing concerns about what he describes as "unfair" tax devolution by the Union government. He has also extended an invitation to a conclave in Bengaluru to discuss issues related to fiscal federalism. Siddaramaiah highlighted that states with higher Gross State Domestic Product (GSDP) per capita, including Karnataka, are receiving disproportionately lower tax allocations compared to their economic contributions.

In his correspondence, Siddaramaiah emphasized that this inequitable distribution undermines the principles of cooperative federalism and jeopardizes the financial autonomy of economically progressive states. He has invited the Chief Ministers of Kerala, Tamil Nadu, Andhra Pradesh, Telangana, Maharashtra, Gujarat, Haryana, and Punjab to join the discussion.

Siddaramaiah criticized the 16th Finance Commission for focusing too heavily on equity at the expense of efficiency and performance. He noted that previous Finance Commissions have led to states with high GSDP per capita receiving diminishing shares of central fiscal transfers, despite their substantial contributions to the country's tax revenues. He stressed that this trend restricts their ability to invest in critical infrastructure and development.

The Chief Minister argued that taxpayers in states contributing significantly to the national economy expect a fair return of their taxes and called for the Finance Commission to strike a better balance between equity, efficiency, and performance. He underscored the importance of recalibrating the fiscal policies to support both economic growth and fair distribution of resources.

Siddaramaiah's call for a conclave aims to address these disparities and advocate for a more balanced approach to tax devolution, ensuring that well-performing states are adequately supported in their development efforts.