DMK Backs Siddaramaiah’s Proposal To Discuss “Unfair” Sharing Of Taxes

The ruling Dravida Munnetra Kazhagam (DMK) in Tamil Nadu has come out in support of Karnataka Chief Minister Siddaramaiah’s proposal to convene a conclave of chief ministers to discuss the “unfair” sharing of taxes with states and fiscal federalism. 

Siddaramaiah, in a letter to several chief ministers, including those of Kerala, Tamil Nadu, Andhra Pradesh, Telangana, Maharashtra, Gujarat, Haryana, and Punjab, has highlighted what he called the unfair devolution of taxes by the Union government. He has argued that states with higher gross state domestic product (GSDP) per capita are being penalised for their economic performance and receiving disproportionately low tax allocations.

Echoing Mr Siddaramaiah’s concerns, DMK spokesperson SAS Hafeezullah said the party has already raised these issues and pointed out that Tamil Nadu receives only 29 paise for every rupee of tax paid to the Centre.

Mr Hafeezullah further criticised the Union government for betraying states by bypassing the Goods and Services Tax (GST) and collecting cess without sharing it with them, and failing to uphold the constitutionally mandated fiscal federalism. He also accused the Centre of allocating too little to non-BJP ruled states.

While welcoming Siddaramaiah’s call in principle, Mr Hafeezullah rubbished the BJP’s argument that states, including Tamil Nadu, receive a larger tax allocation than they did under the UPA. He emphasised that comparing the current funding to states against what it was during the UPA regime is like comparing apples to oranges. 

He noted that the NDA government’s budget has increased threefold compared to the UPA era, and that, at the time, states were able to levy taxes because there was no GST.

The DMK and the Congress are allies and part of the opposition INDIA grouping. The alliance swept the recent Lok Sabha polls winning all 39 seats in Tamil Nadu, with the DMK and Congress emerging victorious in 22 and nine seats respectively 

To a specific question on whether Tamil Nadu Chief Minister MK Stalin should not have boycotted the Niti Aayog meeting in July so that he could have pressed these issues, Mr Hafeezullah called the boycott a protest to expose the BJP and said the DMK has no regrets.