Balance equity with efficiency: Siddaramaiah to 16th Finance Commission

Economically advanced States are committed to supporting poorer States, but this should not come at the expense of their own residents or economic efficiency, Karnataka Chief Minister Siddaramaiah said on Thursday.

In his address to Chairman of the 16th Finance Commission Arvind Panagariya and its members at a meeting here, he said the panel needs to carefully examine the impact of extremely high emphasis given to equity on the incentives of well performing states.

"Moreover, the taxpayers of such states expect their taxes to work for them. This creates public trust. The Finance Commission therefore needs to do a tightrope walk while balancing equity with efficiency and performance," Siddaramaiah said.

Noting that cesses and surcharges are not part of the divisible pool, the Chief Minister said over the years, the Union Government has increased its reliance on them.

This has led to the divisible pool not growing in the same proportion as the Gross Tax Revenue, he said. This has cau