Unlike 2016, when the Aam Aadmi Party government revised value added tax making goods like ready-made garments, sweet and salted snacks, watches, battery-operated rickshaws and marbles cheaper in the open market, the 2017 budget is unlikely to have any new taxes.
Sources said though revenue targets have been downwardly revised for the current financial year (2016-17) as it failed to meet the desired results, the budget size is likely to remain around Rs46,000 crore for the financial year 2017-18, same as the current fiscal.
Tax proposals are one of the biggest highlights of any budget announcement and people look forward to it on the D-day. With municipal elections scheduled within a month after the budget is announced, both the city residents and opposition parties are looking up to the budgetary announcements.
Officials involved in the budget making, however, said any tax proposal this year would be ‘impractical’ as the tax regime would soon be overhauled in wake of the goods and services tax (GST) implementation.
“The way things are going, in all likelihood, the GST will be rolled out by the second quarter of the upcoming financial year. It will overhaul the tax regime completely. Therefore, it won’t be prudent to tinker with the VAT rates for a few months,” a senior official said.
The five-day budget session of Delhi assembly will start from March 6, beginning with inaugural address of the lieutenant governor on Monday. Deputy chief minister, Manish Sisodia, who also holds the finance portfolio, is likely to table the budget on March 7, officials said.
In tune with the reforms initiated by the Central government in budget-making, the Delhi government budget will also do away with the distinction of budgetary expenditure under plan and non-plan heads. All expenditure allocations under budget 2017 will be under two heads — revenue and capital.
Government sources said while the main focus of the budgetary allocation will continue to be education and health, the state government has revised the revenue targets by around Rs5,000 crore, including from VAT, the biggest source of revenue for the government. The state government had set an ambitious revenue target of Rs36,525 crore from all quarters for the current fiscal.
“In the revised estimates (RE), the VAT revenue has been brought down to Rs22,000 crore from Rs24,500 crore in the Budget Estimate (BE).
Till January this fiscal, the total accrual under VAT is Rs17,708 crore, which is higher than Rs16,668 crore earned during the same period last fiscal,” a senior VAT department official said.
However, it remains to be seen if the government manages to meet even the revised VAT revenue target of Rs22,000 crore as over Rs4,000 crore is to be collected in two months.