Drop penalties for populist schemes, Karnataka tells Centre

BENGALURU: Facing challenges in generating resources for funding its five poll guarantee schemes, the Congress government in Karnataka has reached out to the Centre, requesting the removal of clauses concerning "control on populist schemes" in order to secure the full amount owed under funds' devolution. The response comes following the Centre's call for suggestions from state governments to formulate the terms of reference (TOR) for the 16th Finance Commission.

High-ranking officials revealed that the Karnataka government has voiced objections to a clause in the TOR of the 15th Finance Commission, which involves "control or lack of it in incurring expenditure on populist measures". This clause is considered one of the benchmarks for measurable performance-based incentives for states. The official communication from the Siddaramaiah government strongly asserts, "Such criteria should not be included in the TOR for the 16th Finance Commission..."

This assertive letter from the state government followed the Centre's criticism of states participating in what PM Narendra Modi has often referred to as the "revadi culture", viewing it as detrimental to national development.

The Karnataka government, however, maintained that state governments possess the "liberty" to design their own schemes. It contended that a body like the Finance Commission, appointed externally, should not "prescribe" to elected state governments the definition of development or the classification of policies as populist. The government defended its five poll guarantees, characterising them as "schemes" rather than populist measures.