CM urges Centre to hike Budget allocation fund

| | NEW DELHI
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CM urges Centre to hike Budget allocation fund

Friday, 19 July 2019 | Staff Reporter | NEW DELHI

Delhi Chief Minister Arvind Kejriwal  has written to the Centre to increase budget allocation fund for the national Capital Territory of Delhi. In a letter addressed to Home Minister Amit Shah and Finance Minister Nirmala Sitharaman, Kejriwal urged to escalate budget amount for Delhi on the ground of net distributable proceeds, percentage of the divisible pool of the net proceeds of income tax to be assigned to the States and share of each State in the divisible pool.

This is not the first time when Kejriwal Government has petitioned the Centre to increase budget allocation to Delhi, Deputy Chief Minister Mansih Sisodia along with Kejriwal met Sitharaman for the same before announcement of  Union Budget for 2019-20.   

In his letter to both the Ministers, Kejriwal said that I would like to bring to your attention that the Government of NCT of Delhi has a separate Consolidated Fund w.e.f. December 1993.

“The pattern of funding of Delhi’s Budget has been changed from the year 1994-95 and is at par with other States. The financial transactions of Government of NCT of

Delhi including servicing of small saving loans are being met out of our own resources like other States,” the letter quoted.

Importantly, citing the article 270 (3) of the constitution, Kejriwal mentioned that 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.

“However, in the year 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,” the letter stated.

  Kejriwal in his letter further said that the unfortunate omission of article 270(3) resulted in an anomaly which has adversely affected the finances of the NCT of Delhi.

“The transfer of grants in lieu of share in Central Taxes has remained stagnant at Rs 325.00 crore per annum since the year 2000 which happened to be the last year of the duration of the Tenth Finance Commission. Leaving out 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,” he mentioned in the letter.

Attributing the recommendations of  10th Finance Commission, Chief Minister Kejriwal wrote,  “Out of the net distributable proceeds of income tax, a sum equal to 0.927 per cent shall be deemed to represent the proceeds attributable to Union Territories.” 

“As regards, the additional duties of Excise, the share of the Union Territories should be treated as one unit, and their share determined on the same basis as that of all the States,” the Chief Minister wrote in the letter.

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