Delhi Deputy Chief Minister Manish Sisodia today said the Centre must compensate state governments for their "revenue loss due to demonetisation", saying development works being implemented by the Delhi government may suffer as the city administration may not achieve the target of tax revenue.
Sisodia's suggestion came at a Pre-Union Budget consultation meeting of all state Finance ministers chaired by Union Finance Minister Arun Jaitley.
The Deputy CM, who also holds the Finance portfolio, said that due to the scrapping of high value notes, the growth of tax revenue has shown a negative growth in December this year as compared to December 2015.
"Deputy CM suggested that the Central government must compensate the state governments for their revenue losses due to demonetisation," stated a statement issued by the Delhi government.
It also stated the Deputy Chief Minister also pointed out that as a result of demonetisation, it will not be possible to achieve the target of tax revenue in the current financial year and as a result, all developmental works being implemented by the Government may suffer due to lack of resources.
Chief Minister Arvind Kejriwal and the ruling Aam Aadmi Party have criticised Prime Minister Narendra Modi, terming as "failure" the demonetisation move.
At the meeting, Sisodia suggested withdrawal of service tax 15 per cent which is applicable on 40 per cent of the total revenue collected from air conditioned bus service imposed by the Central government as per Notification dated February 29, 2016.
"Deputy CM informed that Delhi government is making all efforts to promote public transport to mitigate the air pollution in the city and to offset the additional liability of service tax imposed by Centre, about 6% of the fare of AC Buses needs to be increased which will discourage the common man to use the public transport.
"He further pointed out that the Central Excise Duty of about 12.625% on fully built CNG buses may also be exempted by the central government to reduce the cost of public transport," the statement also stated.
Sisodia also demanded that the Union Government should increase Delhi's share in the central taxes, which is Rs 325 crore for 15 years.
"The local bodies are not getting any basic and performance grants as recommended by 14th Central Finance Commission to all Local Bodies of other states," he said.
Deputy CM also raised the issue that the Centre treated
Delhi as a Union Territory for payment of share in Central Taxes and as a State when 100% central funding of Centrally Sponsored Schemes to Union Territory comes into the picture.
He informed that the Sub-Group of Chief Ministers constituted by the Government of India on rationalisation of Centrally Sponsored Schemes had recommended 100% central funding for Union Territories since the devolution of Finance Commission Grant is not applicable to Union Territories.
However, the NITI Aayog in its office memorandum issued in the month of August, 2016 stated that all CSS would be funded 100% by Centre in all UTs (without Legislature) and for UTs (with Legislature) existing funding pattern will be followed, Sisodia further said.
