Kejriwal writes to FM Sitaraman, says Delhities are facing discrimination

New Delhi, July 25 (IANS) Delhi Chief Minister Arvind Kejriwal on Tuesday wrote to the Union Finance Minister Nirmala Sitarama about the Delhites facing ‘discrimination’ over the last 23 years.

The Chief Minister urged Finance Minister for fair treatment in the upcoming 16th Central Finance Commission.

It said that Delhites paid 1.78 lakh crores in income taxes but Centre has reduced Delhi’s share to zero in FY-2023-24.

He wrote that Delhi’s share of central taxes was frozen for the last 23 years and that Delhi received only 350 crores in FY 2022-2023 when it should have received 7,378 crores.

Explaining Delhi’s case, the CM requested for Delhi to be considered as a unique case and include it in Terms of Reference of 16th Finance Commission.

“I want to draw your attention to the discrimination that the people of Delhi have been facing for the last 23 years. This step-motherly and unfair treatment by the Central Government towards the Delhites has been flagged innumerable times by the Delhi Government.

“Multiple requests have been made by the Delhi Government to give Delhi its legitimate share in the Central Taxes, but no action has been taken in this regard. As you are well aware, NCT of Delhi enjoys a unique ('sui generis') status among all states and Union Territories in India.

“While it falls in the broad category of a Union Territory with Legislature, it has been working similarly to other states in financial matters. It has a separate Consolidated Fund, w.e.f. December 01, 1993,” the letter reads.

Further in his letter, the Kejriwal has explained that the pattern of funding of Delhi’s Budget is more or less at par with the other states.

“The financial transactions of Government of NCT of Delhi including servicing of small savings loans are being met out of its own resources like other states. Delhi is also devolving funds to Local bodies, out of its net proceeds.

“But despite this, the Government of NCT of Delhi neither gets legitimate grants in lieu of share of central taxes nor any share to supplement the resources of its Local Bodies as is the case with other states,” the letter reads.

Kejriwal has expressed concern that despite having a separate Consolidated Fund and managing its finances like other states, Delhi has been deprived of its legitimate share in the Central Taxes for the past two decades.

The share of Delhi has been stagnant at an astonishingly low amount of 350 crores since 2001-02, even as its budget has increased significantly to 73,760 crores in FY 2023-24.

Compared with neighbouring states having similar populations, the disparity becomes evident. In FY 2022-23, Haryana received 10,378 crores, and Punjab received 17,163 crores from the Central pool of taxes, while Delhi received only 350 crores. Shri Arvind Kejriwal stressed that if treated fairly, Delhi's share should have been 7,378 crores.

Furthermore, he drew attention to the financial plight of Delhi's Urban Local Body (ULB) - the Municipal Corporation of Delhi (MCD). Despite catering to 2 crore Delhites and providing essential services like primary education, healthcare facilities, and solid waste management, the MCD has received no grant-in-aid from the Central Government.

“The Urban Local Bodies (ULBs) were constituted on the basis of the 73rd and 74th constitutional amendment. To ensure the smooth and efficient functioning, it is of utmost importance that the ULBs are supported with sufficient financial resources. Following the same, the 14th and 15th Central Finance Commission has repeatedly allocated grant- in- aid for the local bodies.

“The 14th Central Finance Commission allocated grant-in-aid of Rs 2,87,436 crore for the local bodies for the award period 2015-2020. Similarly, the 15th Central Finance Commission recommended Rs 4,36,361 crore for the year 2021-26. This amounts to Rs 500 per capita per year to the ULBs,” the letter reads.

“But Delhi’s ULB, MCD (Municipal Corporation of Delhi) has been facing extreme unjust behaviour over the last few years, with it receiving nothing from the Central Government. MCD currently caters to 2 crore Delhites and is responsible for providing primary education, healthcare facilities, and solid waste management, similar to what ULBs in other states perform.

“Based on the above recommendations of Central Finance Commissions, the cash-starved MCD would have received additional Rs 7000 cr since 2015. 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,” the letter further states.

The Chief Minister has called upon the Union Finance Minister to recognise Delhi as a unique case and include it in the Terms of Reference of the 16th Finance Commission.

“Government of NCT of Delhi has been raising this issue of financial discrimination for many years now. It has been understood through past communications that since the name of Delhi, for it being a Union Territory, has been removed 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.

“It is my request to kindly consider Delhi as a unique case and include it in the Terms of Reference of the 16th Finance Commission, following the requisite procedure.

“It is high time that justice be done and Delhi gets its reasonable share similar to what other states get.Delhites shall always be grateful for your help,” the letter reads.