Kejriwal wants bigger share of central tax kitty

As Finance Minister Arun Jaitley presents his Budget for 2016-17 on Monday, the Delhi Government would expect a bigger share of the central tax kitty and incentives for urban housing, education and sops for solar power installations and electric vehicles.

Aid for Yamuna’s cleaning, infrastructure and augmentation of security facilities, especially for Women, is also high on list of its expectations.

Chief Minister Arvind Kejriwal has pointed out on a number of occasions that the city’s  share in central taxes and duties of Delhi government, collected by the central government, has remained stagnant at Rs 325 crore for the last 14 years.

In the run-up to the Union Budget for 2016-17, Kejriwal wrote a letter to Jaitley seeking a share in central taxes amounting to Rs 25,000 crore over a span of five years.

Citing the example of Punjab and Haryana, whose central tax share allocation has been doubled for 2015-2020, Kejriwal reminded Jaitely to end the “step-motherly treatment” of Delhi in terms of share in central taxes.

“Delhi residents pay Rs 1.30,000 crore tax to central government and the city’s share in central tax pool is just Rs 325 crore,” Kejriwal said during the AAP government’s Budget presentation in June last year.

However, the biggest hurdle in Delhi getting a higher share in central tax kitty is its ‘Union Territory’ tag which denies it any scope for comparison with other full-fledged states.

In his letter, Kejriwal pointed to the recommendations of the 14th Central Finance Commission report on Delhi that suggest an increased allocation  under heads of central tax, Basic Grant and local body performance grant. 

Deputy Chief Minister Manish Sisodia is looking for Rs 11,000 crore for Delhi in the Union Budget 2016-17.

Sisodia wants the city’s share in central taxes to increase from Rs 325 crore to Rs 5,000 crore, apart from Rs 4,000 crore for public transport improvement and Rs 2,000 crore for the local bodies. 

The AAP government’s expectations of increase in central funding for the city is also linked to its own shortfall of about Rs 3,000 crore in tax and revenue collection in the current fiscal.

If Jaitely losens his purse strings by increasing central allocation for the city government, it would, hopefully, also help the BJP-controlled MCDs as greater central financial support may encourage the Delhi government to implement the recommendations of the Fourth Finance Commission on improving financial health of municipal agencies. 

Under the President Rule in 2014, Jaitely had presented Delhi Budget in July 2014. If the minister continues to take his agenda for the city forward then Delhi might get more funds for solar power installations, electric vehicles, cleaning of the Yamuna, housing of the urban poor, education, transportation and quality of life.

Central schemes for Union Territories touch all these aspects of challenges linked to urbanaisation might take centre stage in the Union Budget on Monday.