Kejriwal demands ‘due share’ in Central taxes

Meets Finance Commission chairman

Chief Minister Arvind Kejriwal and Deputy Chief Minister Manish Sisodia on Friday called on the Chairman of the Finance Commission and submitted a memorandum demanding that Delhi gets its “due share” in Central taxes.

Mr. Kejriwal, the Delhi government said in a statement, told Finance Commission Chairman N.K. Singh that Delhi has been subjected to “gross injustice” over the last two decades, arguing that while the Capital gives ₹1.75 lakh crore as income tax to the Centre towards national growth, it gets back “only ₹325 crore” from the Centre for its own growth.

“Till 2000, the Constitution provided for money for Delhi in line with what the other States were getting. However, the Constitution was amended in 2000 and Delhi was removed from the list. As a result, Delhi stopped getting money from the Centre,” the Chief Minister was quoted as having said.

“Our request to the Finance Commission is that Delhi should also get funds for development like other States. Finance Commission decides on funds to be given to a particular State and thus we have made a request with them. If the post-2000 formula is implemented, Delhi will get ₹6,000 crore annually,” Mr. Kejriwal was quoted saying.

‘₹6,500 crore per year’

In his letter to Mr. Singh, the Chief Minister, according to the statement, said: “The government of NCT of Delhi would be getting its legitimate share in Central taxes of at least ₹6,500 crore per annum with an appropriate annual enhancement like other States to finance development needs.”

“Under Article 270(3) of the Constitution, the share of the net proceeds of income tax ‘attributable to the Union Territories’ had to be prescribed. Accordingly, all the Union Finance Commissions till the Tenth Finance Commission had been giving recommendations for resource sharing not only between the States and the Union but also for the Union Territories including Delhi…” Mr. Kejriwal wrote.

“However, in 2000, the Constitution (Eightieth Amendment) Act, 2000 was passed by the Parliament, primarily for the purpose of including corporation tax with the personal income tax for the purpose of resource sharing between the States and Union of India…In the new Article 270, the erstwhile article 270(3) which had the enabling provision for the Finance Commissions to give recommendations in respect of Union Territories had been omitted…” Mr. Kejriwal stated further.

Terming the omission of Article 270(3) of the Constitution “unfortunate”, Mr. Kejriwal argued that it resulted in an “anomaly” which has “adversely affected the finances of the NCT of Delhi”. He said that the transfer of grants in lieu of share in Central taxes had remained “stagnant” at ₹325 crore per annum since 2000, which happened to be the last year of the duration of the Tenth Finance Commission.

“Leaving Union Territories out of the ambit of Finance Commissions has only affected the Union Territories with legislature since the Budget of the other Union Territories is entirely met from the Consolidated Fund of India,” Mr. Kejriwal wrote in his letter.

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