Central funds help Karnataka; government staff to get salary on time

B V Shiva Shankar | TNN | Apr 22, 2020, 08:02 IST

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BENGALURU: In good news for lakhs of state government employees and pensioners, the Karnataka government is likely to pay salaries and pension on schedule this month as it received Rs 1,678 crore from the Centre on Tuesday as first instalment from the tax-devolution pool.
Thanks to the weeks-long lockdown that has left its coffers dry, the BJP government was looking at deferring a part of the salary for the next three months or opting for an overdraft facility to pay its employees to tide over the crisis in the near term.
The delayed handout from the Centre has eased the financial situation of Karnataka for now. The relief is temporary, though.
Karnataka is entitled to a devolution fund of Rs 31,180 crore from the central-tax pool for 2020-21 as per 15th Finance Commission recommendations. The Centre owes Rs 8.55 lakh crore to states. In the first tranche, the Centre released Rs 46,038 crore and states like Uttar Pradesh (Rs 8,255 crore) and Bihar (Rs 4,631crore) got more than Karnataka.
State likely to get special grant of Rs 5,495 crore
Also, Karnataka is likely to get a special grant of Rs 5,495 crore from the Centre. The Finance Commission had recommended the special grant since Karnataka’s share from the central pool had come down from Rs 36,675 crore in 2019-20 to Rs 31,180 crore in 2020-21.
Union finance minister Nirmala Sitharamanm, who had initially rejected the recommendation for extra grant, reportedly did a turnaround after chief minister BS Yediyurappa presented the dire financial situation of Karnataka.
The state has been urging the Centre to release pending dues of Rs 4,500 crore under GST compensation. “We hope the Centre releases it quickly,” said BT Manohar, member of GST advisory council to the Karnataka government.