Archive · 25 Sep 2026
Karnataka Says Centre Withheld Rs 2,186 Crore Grants
Karnataka says the Union government has not released Rs 2,186.20 crore in grants.
The money was meant for the 2025-26 financial year.
Minister Eshwar Khandre says the state is being treated differently from some other states.
He says some money reached village councils but was not recorded online because of a technical problem.
Karnataka says the online record showed about Rs 225 crore less than the amount received in 2024-25.
The minister says other states received their grants even when their online records had bigger gaps.
Karnataka has sent several letters asking for the money.
The state plans to take the issue to the Supreme Court.
Karnataka Minister Eshwar Khandre alleged the Union government withheld Rs 2,186.20 crore due to the state for 2025-26.
Khandre said Karnataka was subjected to a portal-related condition not applied to Assam, Bihar, Gujarat or Uttarakhand.
He said Rs 225 crore in 2024-25 grant receipts was missing from the e-GramSwaraj portal because of a technical issue.
The minister claimed other states received full grants despite larger differences between released and portal-acknowledged amounts.
Khandre said Karnataka would approach the Supreme Court and described the withholding of funds during drought conditions as inhumane.
- Who
- Karnataka Minister Eshwar Khandre and the Karnataka government; the Union government is accused of withholding the funds.
- What
- A dispute over Rs 2,186.20 crore in 2025-26 Finance Commission grants allegedly withheld from Karnataka.
- When
- The issue concerns the 2025-26 financial year; Khandre raised it on Friday and cited letters sent between December 8, 2025, and July 16, 2026.
- Where
- Karnataka, including its gram panchayats; the minister said the state may approach the Supreme Court.
- Why
- Khandre says funds were withheld because grant receipts were not fully acknowledged on the e-GramSwaraj portal, despite the discrepancy allegedly arising from a technical issue.
Karnataka's Allegation
Union Government's Reported Position
Different treatment of states
Karnataka's Allegation
Eshwar Khandre alleges the Union government applied a portal-related condition to Karnataka while releasing full grants to Assam, Bihar, Gujarat and Uttarakhand despite larger discrepancies.
Union Government's Reported Position
The article does not report a response from the Union government explaining the differing grant decisions or conditions.
Portal records and fund use
Karnataka's Allegation
Khandre says the missing Karnataka entries resulted from a technical issue, while the funds physically reached gram panchayats and work had begun.
Union Government's Reported Position
The article provides no Union government statement addressing Karnataka's explanation or confirming whether the portal discrepancy justified withholding funds.
Impact of withholding funds
Karnataka's Allegation
Khandre calls the withholding discriminatory and inhumane, particularly while Karnataka faces drought conditions, and says the state will seek judicial relief.
Union Government's Reported Position
No response from the Union government is included regarding the drought-related impact or Karnataka's planned Supreme Court action.
- Amount allegedly withheld
- Rs 2,186.20 crore for Karnataka in 2025-26
- Karnataka grant received in 2024-25
- Rs 2,133.25 crore for gram panchayats
- 2024-25 portal discrepancy
- About Rs 225 crore was not reflected on e-GramSwaraj, according to Khandre
- Transfer deadline
- Karnataka must transfer Finance Commission grants to gram panchayats within 10 days, or pay interest, Khandre said
- Uttarakhand comparison
- Rs 470 crore was released in 2024-25, while portal acknowledgement was reportedly zero
- Gujarat comparison
- Rs 2,619 crore was released and Rs 2,104 crore was acknowledged, according to Khandre
- Planned legal action
- Karnataka is expected to approach the Supreme Court