CM Shivakumar Hints at Good News on Karnataka’s Long-Pending Central Grants

Karnataka Chief Minister D K Shivakumar on Thursday hinted at a possible breakthrough on the state’s long-pending central grants following a meeting with Union Finance Minister Nirmala Sitharaman, while opposing the proposed criminal action against GST defaulters.

Speaking to reporters at Karnataka Bhavan in New Delhi after the GST Council meeting, Shivakumar said his discussion with Sitharaman had been positive but declined to disclose details of the development. “I discussed our state's long-pending grants with the Finance Minister, and she has shared some good news. I won't talk about it right now; I will speak on it later,” he said. The chief minister also said the GST Council meeting had gone well, adding that Karnataka’s concerns had received support from other states.

Shivakumar, however, raised objections to the proposal to initiate criminal proceedings and arrest individuals who fail to pay the Goods and Services Tax (GST). He argued that such measures were inappropriate and called for enforcement provisions similar to those followed by the Income Tax Department.

“I argued that rules and regulations similar to the Income Tax Department should be followed, and that it is inappropriate for officials to unnecessarily arrest business owners,” he said. Emphasising the need to recover outstanding tax dues, Shivakumar said authorities should focus on collecting the amounts owed rather than resorting to arrests.

“We should focus on collecting whatever amount is due from them; arresting them is not right,” he said. The Karnataka chief minister further claimed that all states, except one, had supported the state's position on the issue. His remarks come amid discussions within the GST Council on tax administration and enforcement measures. The proposed provisions concerning criminal action against GST non-payers have raised concerns over the possible impact on businesses and the manner in which tax defaults are handled.

While Shivakumar indicated that Karnataka could receive positive news on its pending central grants, he did not specify the amount involved, the nature of the assistance or when a formal announcement might be made. The state government has been seeking the release of pending funds from the Centre.