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Monday, April 12, 2021

Delhi: Across sectors, tax collection in red

In 2015-16, 2016-17, 2017-18, and 2018-19, tax collection grew by 13.61%, 3.03%, 14.70% and 2.54% respectively.

Written by Sourav Roy Barman | New Delhi |
March 9, 2021 3:51:23 am
L-G Anil Baijal, CM Kejriwal and Assembly Speaker Ram Niwas Goel before the start of the budget session on Monday. Prem Nath Pandey

Annual tax collection of the Delhi government had slipped into the red zone even before the pandemic, registering a dip of 0.16% in 2019-20 as compared to the previous year, in a first since the AAP took office. Fiscal deficit, which refers to expenditure over earnings, grew during the period, rising to Rs 3,227.79 crore in 2019-20 (provisional) as compared to Rs 1,489.38 crore in 2018-19, as per the economic survey report.

In his 2019-20 budget, Finance Minister Manish Sisodia had proposed to collect Rs 42,500 crore as tax revenue. However, the economic survey presented by him Monday showed that the government could collect Rs 36,565 crore, as compared to Rs 36,624 crore in 2018-19.

Until then, records show, tax collections never entered the red zone under the AAP, which took office in 2015. In 2015-16, 2016-17, 2017-18, and 2018-19, tax collection grew by 13.61%, 3.03%, 14.70% and 2.54% respectively.

As the economy reeled under the pandemic last August, Sisodia had expressed concern over Delhi’s tax revenue in terms of its GSDP. Later, the government had signed a contract with the Centre for Effective Governance of Indian States to find ways to augment tax revenue. “Though Delhi is one among the higher per capita income states in the country, its position is 22nd in terms of Own Tax/GSDP ratio (4.40%) during 2019-20,” says the economic survey report 2020-21.

In the 2020-21 budget, the government had proposed to collect Rs 44,100 crore as tax revenue. However, due to the pandemic, this is expected to remain way below the target.

According to the survey, the dip in tax collection was across sectors in 2019-20 — from stamps and registration (including land revenue) to excise. The survey also pointed out that Delhi government’s fiscal deficit “increased significantly from Rs 1,489.38 crore during 2018-19 to 3,227.79 crore during 2019-20… Delhi’s outstanding debt at the end of March, 2020 was Rs 34461.83 crore…Thus, the outstanding debt of Delhi Government constitutes 4.15% of GSDP during 2019-20.”

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