‘Delhi should get share of central taxes’
The Delhi state government should get a share of the Union government’s taxes devolved to states as per a formula to be set by the Finance Commission, finance minister of Delhi Atishi Singh said on Tuesday.
“Our suggestion is that Delhi should get its share of central taxes. Delhiites give more than ₹2 trillion in income tax (to the union government). Delhi is one of the engines of growth for the national economy,” the minister said in an interview.
“We are not saying give us everything that Delhi gives, but give us something. If funds do not come for Delhi’s development, it is akin to killing the goose that lays the golden egg.”
Delhi does not get tax devolution because of its special status—while it has an elected legislature, it also has a lieutenant governor as with union territories.
The Sixteenth Finance Commission, led by Arvind Panagariya, is expected to recommend a formula for devolution of a part of the tax colimplementing lected by the union government to states for the five years from FY27.
Singh said that while Delhi doesn’t receive a share of taxes collected by the union government, it still has to devolve its tax revenues to local bodies.
Singh’s plea comes a day after she presented a ₹76,000-crore state budget for
FY25, slightly bigger than the FY23 budget of ₹74,900 crore but without the aid of the union government’s tax devolution or GST compensation.
FY25 will be the first year without GST compensation but the state still managed to increase the budget size without having to borrow, she said. The modest increase in the state budget for FY25 comes after a 16.83% jump in the budget size in FY23.
The Delhi state budget, presented by Singh on Monday, showed that GST compensation from the union government for the state’s losses from the 2017 indirect-tax reform is no longer a revenue stream for the state. In FY23, the state received ₹12,917 crore as GST compensation. In FY24, it had budgeted ₹3,800 crore as GST compensation, but this was revised down to ₹1,500 crore, the receipt budget showed.
Singh said the state still managed to increase the budget in FY25, which “actually means there’s been record growth in revenue”.
The state has projected a tax-revenue increase of 6.4% in FY25 to ₹58,750 crore over the revised estimates for FY24. The minister said revenue from value-added tax, GST and stamp duty has been rising, and that the state has been running a budget surplus for nine years.
Delhi has been paying off loans taken during the previous Congress regime, Singh said.
She added that Delhi’s gross state domestic product has doubled from ₹4.95 trillion in FY15 to over ₹11 trillion, while revenue collections have shot up by two-and-a-half times over this period.
“That means we have an efficient tax-collection machinery as well.”
Singh’s plea comes a day after she presented a ₹76,000 crore state budget for FY25