Delhi CM Kejriwal writes to Centre on “frozen” tax share.

NEW DELHI: Chief Minister Arvind Kejriwal wrote to Union Finance Minister Nirmala Sitharaman in advance of the formation of the 16th Central Finance Commission to draw attention to Delhi’s “frozen” portion in the central tax pool while also requesting that the city be recognised as a “unique case” due to its “frozen” tax share.

Kejriwal accused the Centre of giving Delhi “unfair” treatment and claimed that for the past 23 years, Delhi’s part of the central pool of taxes has been “frozen at an astonishingly low” figure of Rs 350 crore. “Delhi’s share would have been Rs 7,378 crore had it been treated impartially,” he claimed.

Additionally, according to Kejriwal, the MCD has been treated with “extremely unjust behaviour” for the past few years and has received nothing from the Centre. The CM stated that it was understood that since Delhi’s name had been removed from the “Terms of Reference” of the Finance Commission (due to it being a Union Territory), it did not fall under the ambit of tax devolution and was therefore not handled like other states.

However, he added, Delhi is a unique example of a “Union Territory with Legislature” and has the characteristics of a state as well, managing its budget similarly to other states. He added that it was past time that justice was served that Delhi received its fair share, similar to what other states receive, and asked Sitharaman to consider Delhi a “unique case” and put it in the “Terms of Reference” of the 16th Finance Commission.

The 16th Finance Commission, which will likely be established by the federal government this year, will likely provide recommendations about the distribution of taxes between the federal government and the states for a five-year period beginning on April 1, 2026. He said that the country’s local bodies received grants in help from the 14th and 15th Finance Commissions totaling Rs 2,87,436 crore for 2015–2020 and Rs 4,36,361 crore for 202–26, respectively.