New Delhi: Ahead of constitution of 16th Finance Commission, Delhi Chief Minister Arvind Kejriwal on Tuesday wrote a letter to Union Finance Minister Nirmala Sitharaman alleging that the capital’s share of central taxes was frozen for the last 23 years.

The 16th Finance Commission plays a pivotal role in India’s fiscal federalism, will soon be constituted, and its recommendations will cover the five-year period commencing from 1st April 2026.

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In a letter, Kejriwal said, “Delhi’s share of central taxes was frozen for the last 23 years. Delhi received only 350 crores in FY 2022-2023 when it should have received 7,378 crores. Delhiites paid 1.78 lakh crores in income taxes but Centre has reduced city’s share to zero in FY-2023-24.”

Alleging ‘step-motherly and unfair treatment’ by the Central Government, Kejriwal stated, “I want to draw your attention to the discrimination that the people of Delhi have been facing for the last 23 years. This step-motherly and unfair treatment by the Central Government towards the Delhites has been flagged innumerable times by the Delhi Government.”

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“Multiple requests have been made by the Delhi Government to give the national capital its legitimate share in the Central Taxes, but no action has been taken in this regard. As you are well aware, NCT of Delhi enjoys a unique (‘sui generis’) status among all states and Union Territories in India. While it falls in the broad category of a Union Territory with Legislature, it has been working similarly to other states in financial matters. It has a separate Consolidated Fund, with effect from December 01, 1993,” the letter read.

“The financial transactions of Delhi Government including servicing of small savings loans are being met out of its own resources like other states. Delhi is also devolving funds to Local bodies, out of its net proceeds. But despite this, the Delhi Government neither gets legitimate grants in lieu of share of central taxes nor any share to supplement the resources of its Local Bodies as is the case with other states,” Kejriwal underlined.

“Despite having a separate Consolidated Fund and managing its finances like other states, Delhi has been deprived of its legitimate share in the Central Taxes for the past two decades. The share of Delhi has been stagnant at an astonishingly low amount of 350 crores since 2001-02, even as its budget has increased significantly to 73,760 crores in FY 2023-24,” Kejriwal said in his letter.

While comparing the Capital’s budget with other states, he asserted, “Compared with neighbouring states having similar populations, the disparity becomes evident. In FY 2022-23, Haryana received 10,378 crores, and Punjab received 17,163 crores from the Central pool of taxes, while Delhi received only 350 crores.”

Kejriwal further said that if treated fairly, the national capital’s share should have been 7,378 crores to date in the central tax pool.