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City spared bitter pill — for now

delhi Updated: Jun 23, 2009 02:51 IST
Anuradha Mukherjee

The Sheila Dikshit government spared Delhi a nasty jolt by staying off the issue of subsidy rollback on power and domestic LPG cylinders and tariff hikes — but the relief could be temporary and only in deference to the 7/7 Lok Sabha results.

In the coming months, the government may resort to bus fare hikes and increase the tariff for power and LPG, government sources have indicated. Currently, the government pays subsidies to the tune of Rs 375 crore: Rs 200 crore for power, Rs 165 crore for LPG cylinders and Rs 10 crore for pulses.

“Decision on subsidy rollback (power, LPG) will be taken over next few months. In December, when the revised estimates are prepared, there will be stock taking on revenue as well,” said a senior government official.

The ambient air cess on diesel may also be hiked to augment revenue collection.

Playing to the gallery for now, the government is desisting from any hike, while apprising voters of the “worsening revenue situation”.

“This is a thanksgiving budget for the people of Delhi. Delhiites have chosen (us) the third time, so we wanted to thank them. With the Commonwealth Games ahead, we need to develop infrastructure,” said Finance Minister AK Walia, when asked about the absence of any “harsh measures” to tackle the Rs 1,300-crore shortfall in revenue.

Walia stuck to the Rs 23,043-crore outlay that he had announced earlier this year while presenting the vote-on-account. “All our subsidies will continue,” assured Walia.

Asked whether the issue of subsidy rollback would emerge in the coming months since the government was complaining about a deficit of Rs 1300 crore in revenue receipts, Walia said: “Time will tell.”

But he later added that if need be, the provision to hike tariffs or rollback subsidies was present.

The beleaguered Delhi Municipal Corporation (second amendment) Bill was also kept in abeyance as the legislation proposes rather stringent penalty for unauthorised construction and littering etc.

“We will pass the amendment soon as it is aimed at containing littering the way the anti-defacement Act has taken posters off Delhi streets. A clean-up is required ahead of the Commonwealth Games,” said Walia.

He, however, did not have a clear answer on how the revenue shortfall would be plugged. “We will scale down losses on DJB and DTC. Our main expenses are on Commonwealth Games. Once Games are over, our expenses will go down,” said Walia.

Walia said he would use the funds from the small savings loans offered by the Centre to bridge revenue losses but officials said this source would not be adequate for upcoming expenses. Delhi government cannot take loans from the open market and has a running debt of about Rs 25,000 crore for the last three years.

“We cannot depend on the small savings loan and will have to control loss making entities; we have to stop bleeding DTC and DJB,” said an official.

The officials also pointed out the situation was not as dire as it was often painted as the government was still recording growth in development. “We are not experiencing negative growth yet, but growth has slowed down. We expect 11 per cent growth in revenue this year. And the revenue loss last year was made up with surplus funds,” said an official.

See Graphic on liquor sale

See Graphic on important sectors for Budget 2009