Why different rules for Karnataka in release of Central grants, asks Eshwar Khandre

Rural Development and Panchayat Raj Minister Eshwar B. Khandre on Friday questioned the Centre’s decision to withhold ₹2,186.20 crore in grants due to Karnataka under the 15th Finance Commission, alleging that the State was being subjected to conditions not applied to Assam, Bihar, Gujarat and Uttarakhand.

Responding to questions on the financial position of gram panchayats, Mr. Khandre attributed the shortage of funds to what he termed the Centre’s discriminatory approach towards Karnataka.

Under the Finance Commission recommendations, grants meant for gram panchayats are released by the Centre to the State, which is required to transfer them to the panchayats within 10 days. The receipt details are to be uploaded on the e-Gram Swaraj portal, failing which the amount is required to be paid with interest, he said.

Technical glitches

Mr. Khandre said Karnataka had received ₹2,133.25 crore for gram panchayats in 2024-25, while receipts amounting to ₹1,907 crore had been reflected on the e-Gram Swaraj portal. The difference of about ₹225 crore was due to technical issues and, according to him, the amount had physically reached the gram panchayats and works had been taken up.

“Citing such a minor technical issue as a reason for withholding ₹2,186 crore is a grave injustice to Karnataka,” he said.

He cited the release of funds to other States to question the Centre’s approach. Uttarakhand, he said, had received ₹470 crore for 2025-26 despite no receipts being reflected on the portal.

Similarly, Gujarat had received ₹2,619 crore, while receipts of ₹2,104 crore were reflected on the portal, leaving a difference of ₹515 crore. Assam had received ₹1,315 crore against portal receipts of ₹447 crore, a difference of ₹868 crore, while Bihar had received ₹4,109 crore against receipts of ₹1,775 crore, leaving a gap of ₹2,334 crore.

“Why is a condition that is not being applied to Assam, Bihar, Gujarat and Uttarakhand being applied only to Karnataka?” Mr. Khandre asked.

Discrimination

He alleged that the Centre was following a “discriminatory policy” and said the State had been denied funds due to it under the Finance Commission recommendations.

Mr. Khandre said the State government had repeatedly taken up the issue with the Centre. The Rural Development and Panchayat Raj Department had written to the Centre on December 8, 2025, January 19, March 25, April 4 and April 17, 2026, he said.

Chief Minister Siddaramaiah had also written to the Union Finance Minister and the concerned Minister on February 25, April 6 and July 16 seeking release of the funds, he said, pointing out that he had also written to Members of Parliament and met Union Ministers seeking the release of the pending amount.

The Minister said the State was considering approaching the Supreme Court over the issue. “At a time when the State is facing the impact of drought, withholding funds is inhumane,” he said.