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The Union Finance Ministry has firmly ruled out any alternative mechanism to compensate producing States such as Karnataka for revenue loss after the end of the GST compensation regime in June 2022. Minister of State for Finance Pankaj Chaudhary informed Parliament that no such proposal is under consideration and clarified that Karnataka has no pending special assistance grants, signalling that the State must rely on its own GST growth and existing fiscal transfers. Backing its stand, the Centr
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FAQ :
No, the Union Finance Ministry has stated that there will be no alternative mechanism to compensate producing states like Karnataka for revenue loss after the GST compensation regime ended in June 2022.
The ministry points to Karnataka's strong GST performance over the past four years, with significant growth in collections, and increased central fiscal transfers to the state.
Karnataka's gross GST collections saw a sharp rise from Rs 95,926 crore in 2021-22 to Rs 1,59,563 crore in 2024-25, indicating robust economic activity.
Yes, Karnataka received Rs 13,026 crore under the Special Assistance Scheme for Capital Investment (SASCI), which the Centre considers adequate financial support.
Yes, concerns exist regarding the state's own revenue mobilisation beyond GST, particularly from the Registration and Stamps Department, which has missed targets due to digitisation issues and operational bottlenecks.
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