Kejriwal Writes To FM Sitharaman Over 'Stepmotherly' Treatment, Demands Fair Share In Central Taxes

Chief Minister Arvind Kejriwal said, Delhites paid 1.78 lakh crore just as income tax in FY22, however, Delhi received only 350 crores in FY23 when it should have received 7,378 crores. 

Ahead of constitution of the 16th Central Finance Commission, the Delhi CM demanded the fair treatment of the UT by the Legislature. 

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Delhi Chief Minister Arvind Kejriwal on Tuesday sent a letter to Union Finance Minister Nirmala Sitaraman, expressing concern over the Centre's "stepmotherly and unfair" treatment of Delhi for the past 23 years. Ahead of constitution of the 16th Central Finance Commission, CM Arvind Kejriwal demanded the fair treatment of Delhi as a UT with Legislature. 

In the letter to Nirmala Sitharaman, Chief Minister Arvind Kejriwal wrote, "Delhites paying 1.78 lakh crore just as income tax in FY 2021-22 the second highest among all states and Union Territories in India after Maharashtra."

However, Delhi received only 350 crores in FY23 when it should have received 7,378 crores. 

"Unfortunately, Delhi's share from the Central pool of taxes has been stagnant at 350 crore since 2001-02, when the budget of Delhi was 8,93 crore. To our utter surprise, in FY2023-24, when the budget of Delhi has increased by 8 times to 73,760 crore, Delhi's share in central taxes has been reduced to 0," he further added. 

Explaining Delhi’s case, the CM requested for Delhi to be considered a unique case. The chief minister said it was understood that since Delhi's name has been removed (for being a Union Territory) from the 'Terms of Reference' of the Finance Commission, it does not fall under the purview of tax devolution and hence, is not treated like other states.

"But Delhi is a special case of 'Union Territory with Legislature' and has the character of the state as well, with Delhi managing its finances similar to other states," he stated.

Kejriwal appealed to the Union Finance Minister to treat Delhi as a "unique case" and include it in the 'Terms of Reference' of the 16th Finance Commission. He emphasized the need for fairness and urged for Delhi to receive a reasonable share similar to other states.

The Central government is expected to establish the 16th Finance Commission this year, which will determine the tax division ratio between the Centre and states for the next five years, starting from April 1, 2026.

According to the Delhi CM, the 14th and 15th Finance Commissions allocated grant-in-aid of Rs 2,87,436 crore for 2015-2020 and Rs 4,36,361 crore for 2021-26, respectively, to the local bodies across the country. This equates to Rs 500 per capita per year for urban local bodies, as per his statements.

"The MCD currently caters to two crore Delhiites and is responsible for providing primary education, healthcare facilities, and solid waste management, similar to what urban local bodies in other states perform. Based on the above recommendations of Central Finance Commissions, the cash-starved MCD would have received additional Rs 7,000 crore since 2015," Kejriwal said.

Adding "MCD (Municipal Corporation of Delhi) has been facing extreme unjust behaviour over the last few years, with it receiving nothing from the Central Government."

“The cash-starved MCD would have received additional Rs 7000 crore since 2015," Kejriwal said. Further explaining that this would have been a boon for the cash-strapped MCD, which is facing huge budget deficits, "leading to late payments to vendors, delayed salaries to its employees and in turn, is not able to deliver at its full potential.”