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Target 2047: Delhi’s common man should earn as much as Singapore’s

The tax revenue target for the next financial year is marginally lower than last year’s Rs 44,100 crore, of which only around Rs 29,300 crore could be collected, with the economy battered by the pandemic. In 2019-20, the government could collect Rs 36,565 crore against the target of Rs 42,500 crore.

Written by Sourav Roy Barman | New Delhi |
March 10, 2021 1:28:24 am
CM Kejriwal with Deputy CM Sisodia. (Photo: Prem Nath Pandey)

The Delhi government plans to collect Rs 43,000 crore tax to fund a major part of its Rs 69,000 crore annual budget for 2021-20, after falling short of the target for two consecutive years.

The tax revenue target for the next financial year is marginally lower than last year’s Rs 44,100 crore, of which only around Rs 29,300 crore could be collected, with the economy battered by the pandemic. In 2019-20, the government could collect Rs 36,565 crore against the target of Rs 42,500 crore.

Asked how his government plans to fund the enhanced budgetary allocation despite a drastic dip in tax revenues, Chief Minister Arvind Kejriwal responded, with a smile: “Efficient financial management.”

Finance Minister Manish Sisodia said the government has set an ambitious target of taking the per capita income of Delhi on a par with Singapore by 2047: “To make this possible, we have to increase income of our citizens by about 16 times which is a difficult target, but not impossible.”

As per the Delhi economic survey released on Monday, while an average Delhiite earned Rs 2.74 lakh annually (constant prices) in 2019-20, it reduced to Rs 2.54 lakh in 2020-21 (advance estimate), registering a dip of 7.53%. The per capita income of Delhi is nearly three times the national average, added the survey.

Kejriwal told a press conference that the Covid pandemic hit public finances, as sources of income dried up and expenditure rose. “The budget has been prepared under very difficult circumstances. Women, senior citizens, youth, people from all religions and walks of life have been taken care of. At one point we were not sure if this year’s budget will be smaller in size compared to last year or bigger,” he said.

Sisodia also accused the Centre of going back on its promise of paying GST compensation. He asserted that the government will use data analytics and business intelligence to prevent any possible leak in taxes. In 2020, the government had signed a contract with the Centre for Effective Governance of Indian States to find ways to augment tax revenue in Delhi.

“When GST was implemented in 2017, all states were promised a 14% growth rate along with assured revenue for 5 years. However, the Centre, in the name of the Covid pandemic, did not fulfil its promise this year, and a loan was provided in lieu of compensation. The Delhi government shall face two challenges in the coming times — first would be the Centre going back on its promise of providing compensation. Second is the assurance for revenue protection ending on June 30, 2022. After which, we shall face a real dilemma in revenue collection,” Sisodia said.

Of the total budgetary allocation, the highest share, 24%, has been set aside for education, followed by health with 14%. In the case of allocation for schemes and projects, however, transport has trumped every other department this year with 23% of the Rs 37,800 crore outlay. Education comes in at 20%, followed by health at 14%.

The outlay for transport has risen significantly as the department is in various stages of inducting CNG buses and e-buses to augment the city’s public transport fleet. In 2020-21, allocation for transport under schemes and projects was Rs 4,328 crore or 14.7% of the total.

While the size of the budget is Rs 69,000 crore (budget estimates), 55% of this is meant for schemes and programmes, the rest goes into meeting government expenditures on heads such as salaries and administrative expenses.

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