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In a letter to Union Finance Minister Nirmala Sitharaman, Karnataka Chief Minister Siddaramaiah referred to the Finance Commission’s report for 2020-21 recommending Rs 5,495 crore in special grants to the state.
According to economists, Faster tax devolution is likely to encourage states to continue on the path of capital spending.
The previous Finance Commission submitted its report on 9 November, 2020, for the 5 fiscals -- 2021-22 to 2025-26 -- to the President.
The government on Thursday released two instalments of tax devolution to states totalling over Rs 1.16 lakh crore to help accelerate their capital expenditure.
This is in line with the commitment of Government of India to strengthen the hands of states to accelerate their capital and developmental expenditure, the Ministry of Finance said in a statement.