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Prior to the formation of the 16th Central Finance Commission, Chief Minister Arvind Kejriwal had written to Union Finance Minister Nirmala Sitharaman, referring to Delhi’s “frozen” stake in the CTA even as he demanded that Delhi be treated as a “unique case”.
Alleging “stepmother and unfair” treatment by the centre, Kejriwal said Delhi’s stake in the Central Tax Pool has been “frozen at an astonishingly low amount” of Rs 350 crore over the past 23 years.
In his letter to Sitharaman, he said, “If Delhi had been treated in an unbiased manner, its share would have been Rs 7,378 crore”.
He said Delhi’s share has been frozen at Rs 350 crore since 2001-02. “It was reduced to zero in 2022-23 when Delhi’s budget increased eightfold over 2001-02, to the tune of Rs.73,760 crore,” he said.
“It is difficult to even imagine this happening despite the people of Delhi paying Rs 1.78 crore in income tax in the fiscal year (2021-22), which is the second highest among all the states and union territories of India after Maharashtra,” the prime minister said.
Kejriwal also said that the Delhi Municipal Corporation (MCD) has been facing “extremely unfair behaviour” for the past few years, as it has not received anything from the central government.
The Prime Minister said it was the understanding that since the name Delhi (being a Union Territory) was removed from the ‘Terms of Reference’ of the Finance Commission, it does not fall under the remit of taxes and, therefore, is not treated like other states.
“But Delhi is a special case of ‘Union Territory with Legislature’ and has the character of a state too, with Delhi managing its finances similar to other states,” he said.
Kejriwal asked the Union Finance Minister to consider Delhi as a “unique case” and include it in the 16th Finance Committee’s “Terms of Reference” and added that it was time for justice to be done and Delhi got its reasonable share similar to what other states get.
The central government is likely to form the 16th Finance Committee this year to propose, among other things, the proportion at which taxes will be divided between the center and the states for a period of five years, starting from April 1, 2026.
The director of the Delhi Center said the 14th and 15th Finance Committees have allocated grant assistance — Rs. 2,87,436 crore for the period 2015-2020 and Rs. 4,36,361 crore for the period 2021-26, respectively — to local bodies in the country. He said this amounts to 500 rupees per person per annum for urban local authorities.
“MCD currently caters to the crore population of Delhi and is responsible for the provision of primary education, healthcare facilities and solid waste management, similar to what urban local authorities are doing in other states. Based on the above recommendations from the Central Finance Committees, the cash-starved MCD would have received an additional Rs 7,000 crore since 2015,” said Kejriwal.
“As you know, the 16th Central Finance Commission will be formed soon and its recommendations will cover the five years starting from 1st April 2026. As the Finance Commission plays an important role in fiscal federalism in India, I would like to draw your attention towards the discrimination faced by the people of Delhi for the past 23 years,” Kejriwal said in his letter.
He said that the center’s “unfair and stepmother treatment” towards Delhi followers had been reported countless times by the Delhi government with requests to give Delhi its “legitimate share” in central taxation, but no action was taken in this regard.
The prime minister said that Delhi has a “unique” status among all the states and union territories in India. He said that while it falls into the broad class of Union territories with a legislature, it functions similarly to other states in financial matters.
He pointed out that the funding pattern of Delhi’s budget is more or less on par with other states, and the financial transactions of the Delhi government are fulfilled from its own resources, and the funds are transferred to the Middle East and Central Asia Department from the net proceeds.
“But in spite of this, the NCT government in Delhi does not get legitimacy grants in lieu of the central tax quota nor any quota to supplement the resources of its local bodies as is the case with other states,” he complained.
In his letter, Kejriwal claimed that Delhi’s neighboring states with similar populations like Haryana and Punjab took Rs 10,378 crore and Rs 17,163 crore in 2022-23 as their share of the central pool of taxes.
(This story was not edited by the News18 staff and was published from a syndicated news agency feed – PTI)
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