Hiking share in central taxes: Centre agrees to Delhi's demand

Last Updated: Thursday, January 17, 2013 - 19:37

New Delhi: The Delhi government on Thursday said the Centre has agreed to consider its demand to hike its share in central taxes from the current Rs 325 crore to Rs 3500 crore and to treat the capital on par with other states on funding from Central Finance Commission to civic bodies.

Chief Minister Sheila Dikshit made these demands at a pre-budget consultation meeting with Union Finance Minister P Chidambaram on Wednesday.

At the meeting, Dikshit demanded a substantial hike in the Central Taxes share which stands frozen at Rs 325 crore since 2001-02 despite size of Annual Plan going up from Rs 8973 crore in 2001-02 to Rs 33,436 crore in 2012-13.

She also exhorted the finance minister to consider Delhi on par with all other states as far as direct funding from the Central Finance Commission to its civic bodies are concerned.

"The city government through better tax administration in VAT, excise, registration of properties and motor vehicle tax has been able to generate its own resources to fill the gap arisen due to inadequate share in Central Taxes," she told the meeting, according to an official release.

"Chidambaram assured to give due consideration of the issues raised by the Chief Minister," it said.

Delhi has enhanced its internal resource mobilisation to a huge extent in the last 15 years. It has been frozen at the astonishingly low figure of Rs 325 crore.

"The amount of Rs 325 crore was fixed when our Annual Budget was Rs 8973 crore in 2001-02 and the same figure has been maintained even though the Annual Budget rose to Rs 33,436 crore in 2012-13. The share should be fixed at at least Rs 3500 crore as Delhi requires additional funds," she said.

She justified her demand by saying that it has huge expenditure on development of world-class infrastructure, implementation of number of schemes through Direct Cash Transfer Mode, allocation of 65 percent of its budget for social sector schemes and ever-increasing population.

As Delhi is not a state but a Union Territory with a Legislature, hence, it is not being treated as a state in spite of having its own consolidated fund.

Apart from this, Delhi is also not being treated as UT, hence, not getting generous financial support from the Union Government, Dikshit said.

"Delhi is releasing a substantial amount of its resources to the local bodies as per the recommendations of the Delhi Finance Commission.

"Delhi is being denied to access its just share in central funds as per the recommendations of the Central Finance Commission i.E. Grant to civic bodies out of central funds as applicable in case of other states," she said.

Dikshit stressed upon the need for inclusion of Delhi in terms of reference of Central Finance Commission to enable the city government to claim for a reasonable share in central taxes and access to central funds like other states.


First Published: Thursday, January 17, 2013 - 19:37

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