The Aam Aadmi Party (AAP)-led Delhi government has sought a share of at least ₹5,000 crore from Central taxes every year, arguing that its share has been stagnant at ₹325 crore for the past 15 years. It also pledged its “full support” to the introduction of Goods and Services Tax at the earliest.
This is part of the recommendations of the Delhi government for the upcoming Union Budget, submitted to Finance Minister Arun Jaitley by Deputy Chief Minister Manish Sisodia last weekend.
Hinting at excise duty hike on diesel vehicles in his speech at the Finance Ministers’ meeting here, Sisodia said: “We do not want to increase VAT (value added tax) on diesel vehicles, as it leads to opening up of opportunities geographical tax arbitrage.” The AAP government, which is locked in a battle with BJP-controlled municipal corporations in Delhi, whose workers are on strike demanding salary clearance, also sought at least ₹2,000 crore as basic and performance grants for local bodies similar to that of the neighbouring States. “This will facilitate tiding over the financial crisis in East and North Municipal Corporations,” it said in the wake of garbage piling up.
To improve health delivery systems, it also sought excise exemption for medical and surgical equipment,
Sisodia also highlighted some “peculiar problems” faced by the city government. “Land is a valuable resource, which we don’t have. We don’t control land use. We don’t have share in Central taxes. Our tax base is narrow because 87.5 per cent of Gross State Domestic Product is from services.”
The other recommendations include, minimum support price at least 50 per cent more than the weighted average cost of production and fair and remunerative price for diverse crops, including pulses, millets, and oilseeds, through direct procurement or timely market intervention.