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15 Feb 2026·Source: The Hindu
4 min
Polity & GovernanceEconomyNEWS

Karnataka CM Criticizes Centre, Unveils 'Sixth Guarantee' Scheme

Karnataka CM launches 'Bhu Guarantee' scheme, criticizes Centre for injustice in fund allocation.

Karnataka CM Criticizes Centre, Unveils 'Sixth Guarantee' Scheme

Photo by Srusti Valakamadinni

Karnataka Chief Minister Siddaramaiah launched the "Bhu Guarantee" scheme, distributing title deeds to beneficiaries and criticizing the central government for alleged injustice in fund allocation to the state. He questioned the silence of former Chief Ministers and current MPs on the issue. Siddaramaiah claimed his government has fulfilled 243 assurances and credited ₹1,18,000 crore to bank accounts through various guarantees.

The Leader of the Opposition in the Karnataka Assembly, R. Ashoka, termed the Congress government's 1,000 days as "dark days."

Key Facts

1.

Karnataka CM Siddaramaiah launched the "Bhu Guarantee" scheme.

2.

The scheme involves distributing title deeds to beneficiaries.

3.

Siddaramaiah criticized the central government for alleged injustice in fund allocation.

4.

He questioned the silence of former Chief Ministers and current MPs on the issue.

5.

The government claims to have fulfilled 243 assurances.

6.

₹1,18,000 crore has been credited to bank accounts through various guarantees.

UPSC Exam Angles

1.

GS Paper II: Functions and responsibilities of the Union and the States, issues and challenges pertaining to the federal structure, devolution of powers and finances up to local levels and challenges therein.

2.

Connects to the syllabus by highlighting the ongoing debates and challenges in fiscal federalism and resource allocation between the Union and the States.

3.

Potential question types include statement-based MCQs on the role of the Finance Commission, the impact of GST on state finances, and the constitutional provisions governing fiscal relations.

In Simple Words

The Karnataka government is saying the central government isn't giving it enough money. The Chief Minister is upset and wants the state to get its fair share of funds. It's like when you feel your sibling gets more allowance even though you do the same amount of chores.

India Angle

In India, states depend on the central government for funds to run various schemes and development projects. If a state feels it's not getting enough money, it can affect everything from road construction to welfare programs for the poor.

For Instance

Think of it like a Resident Welfare Association (RWA) collecting maintenance fees. If one building feels it's contributing more but getting fewer services, it will likely complain to the RWA president.

This matters because if the state doesn't have enough money, it can impact the services you receive, like good roads, clean water, and efficient healthcare.

When states and the central government argue over money, it's your daily life that ultimately gets affected.

Visual Insights

Karnataka Government's Achievements

Key statistics from the Karnataka CM's announcement regarding fulfilled assurances and fund transfers.

Assurances Fulfilled
243

Demonstrates the government's commitment to its promises. Important for assessing governance effectiveness.

Funds Credited to Bank Accounts
₹1,18,000 crore

Indicates the scale of direct benefit transfers under various guarantee schemes. Relevant for understanding welfare spending.

More Information

Background

The concept of federalism is fundamental to the Indian Constitution, outlining the division of powers between the Union and the States. This division is enshrined in the Seventh Schedule, which specifies the subjects under the Union List, State List, and Concurrent List. Disputes over resource allocation between the Union and States are common, often leading to debates about fiscal autonomy and fairness. The Finance Commission, a constitutional body, plays a crucial role in recommending principles governing the distribution of tax revenues between the Union and the States. These recommendations are usually implemented with some modifications. States often argue for a larger share of central taxes to address their specific developmental needs and to compensate for any perceived imbalances in resource distribution. The recommendations of the Finance Commission are not binding on the Union Government but hold significant weight. Article 280 of the Indian Constitution deals with the establishment and functions of the Finance Commission. The Commission is constituted every five years or earlier, and its recommendations cover a period of five years. The Commission's recommendations cover various aspects of fiscal relations, including the principles governing grants-in-aid to the States under Article 275.

Latest Developments

Recent years have seen increased scrutiny of the criteria used by the Finance Commission for horizontal tax devolution, particularly concerning the weightage given to population, area, and fiscal discipline. Some states have voiced concerns that the current formula disadvantages them due to their progress in population control or their adherence to fiscal responsibility norms. The Goods and Services Tax (GST) regime has also altered the fiscal landscape, impacting the revenue autonomy of states and their dependence on central government transfers. The COVID-19 pandemic further strained the fiscal relations between the Union and the States, with states demanding greater financial assistance to manage the health crisis and its economic fallout. The central government has implemented various measures, including special grants and increased borrowing limits for states, to alleviate the financial burden. However, debates persist regarding the adequacy and timeliness of these measures. The role of NITI Aayog in fostering cooperative federalism and facilitating dialogue between the Union and the States on fiscal matters remains crucial. Looking ahead, the focus is on strengthening cooperative federalism and ensuring a more equitable distribution of resources between the Union and the States. This involves revisiting the criteria for tax devolution, addressing the concerns of states regarding revenue losses due to GST, and promoting greater fiscal autonomy at the state level. The Sixteenth Finance Commission, to be constituted soon, will play a key role in shaping the future of fiscal federalism in India. The recommendations will likely address issues related to climate change financing and sustainable development goals.

Frequently Asked Questions

1. What is the 'Bhu Guarantee' scheme launched by the Karnataka government, and what is its primary objective?

The 'Bhu Guarantee' scheme involves distributing title deeds to beneficiaries. The scheme aims to provide land ownership and security to eligible residents of Karnataka.

2. What are the key issues in Centre-State financial relations highlighted by the Karnataka CM's criticism, and how are these relevant for UPSC Mains?

The Karnataka CM criticized the central government for alleged injustice in fund allocation. This highlights ongoing debates about fiscal federalism, resource distribution, and the criteria used by the Finance Commission. Understanding these issues is crucial for answering questions related to Centre-State relations, fiscal autonomy, and cooperative federalism in the UPSC Mains exam.

3. What is fiscal federalism, and how does the 'Bhu Guarantee' scheme relate to the concept of state government welfare programs?

Fiscal federalism refers to the division of financial powers and responsibilities between the central and state governments in a federal system. The 'Bhu Guarantee' scheme is an example of a state government welfare program aimed at land distribution, which falls under the state's responsibility to promote social and economic justice.

4. Why is the Karnataka CM criticizing the central government now, and what could be the political motivations behind it?

The Karnataka CM is criticizing the central government for alleged injustice in fund allocation, potentially to highlight the state's needs and demand greater financial support. Politically, this could be aimed at consolidating support within the state by portraying the central government as being unfair to Karnataka.

5. What are the recent developments regarding Centre-State financial relations that are relevant to the current situation in Karnataka?

Recent developments include increased scrutiny of the criteria used by the Finance Commission for horizontal tax devolution. Some states have voiced concerns that the current formula disadvantages them. These concerns are relevant to Karnataka's situation, as the CM has raised similar issues regarding fund allocation.

6. What is the role of the Leader of the Opposition in a democracy, as exemplified by R. Ashoka's criticism of the Karnataka government?

The Leader of the Opposition plays a crucial role in holding the government accountable and providing alternative perspectives. R. Ashoka's criticism of the Karnataka government's 1,000 days as 'dark days' exemplifies this role, highlighting the opposition's duty to scrutinize and challenge the ruling party's policies and performance.

Practice Questions (MCQs)

1. Consider the following statements regarding the Finance Commission in India: 1. It is a constitutional body established under Article 280 of the Constitution. 2. Its recommendations on the distribution of tax revenues between the Union and the States are binding on the government. 3. The Finance Commission is constituted every ten years. Which of the statements given above is/are correct?

  • A.1 only
  • B.2 only
  • C.1 and 3 only
  • D.1, 2 and 3
Show Answer

Answer: A

Statement 1 is CORRECT: The Finance Commission is indeed a constitutional body established under Article 280 of the Indian Constitution. It is responsible for recommending the principles governing the distribution of tax revenues between the Union and the States. Statement 2 is INCORRECT: The recommendations of the Finance Commission are advisory in nature and not binding on the government. The government can accept or reject these recommendations. Statement 3 is INCORRECT: The Finance Commission is constituted every five years or earlier, not every ten years.

2. Which of the following schedules of the Indian Constitution deals with the division of powers between the Union and the States?

  • A.Fifth Schedule
  • B.Sixth Schedule
  • C.Seventh Schedule
  • D.Eighth Schedule
Show Answer

Answer: C

The Seventh Schedule of the Indian Constitution deals with the division of powers between the Union and the States. It contains three lists: the Union List, the State List, and the Concurrent List. The Union List contains subjects over which the Union government has exclusive power to legislate. The State List contains subjects over which the State governments have exclusive power to legislate. The Concurrent List contains subjects over which both the Union and State governments can legislate.

3. Assertion (A): States often demand a larger share of central taxes. Reason (R): States require funds for developmental activities and to address regional disparities. In the context of the above, which of the following is correct?

  • A.Both A and R are true and R is the correct explanation of A
  • B.Both A and R are true but R is NOT the correct explanation of A
  • C.A is true but R is false
  • D.A is false but R is true
Show Answer

Answer: A

Both the assertion and the reason are true, and the reason correctly explains the assertion. States demand a larger share of central taxes because they require funds for developmental activities and to address regional disparities. This is a fundamental aspect of fiscal federalism in India, where states rely on central transfers to finance their expenditures.

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