The state budget presented on Monday has been one of the harshest in Sheila Dikshit’s tenure of 11 years as Delhi chief minister. Increased taxes on a variety of items and the lifting of subsidies from a few will see an ordinary resident’s monthly expenses go through the roof. In an interview to HT on Wednesday, Dikshit (71) said her government’s hands were tied.
People are already burdened with rising prices. Diesel and petrol rates were hiked a month ago in the Union budget. Isn't it a bad time for another hike?
Do you think it has been easy for us? We have increased daily wages for skilled and unskilled labour between 33 and 48 per cent and for clerical and non-clerical staff between 41 and 49 per cent. Sixth Pay Commission is being implemented putting an annual liability of at least Rs 1,000 crore on the government. We sold atta (wheat flour) at Rs 139 per 10 kilogram when it was being sold at Rs 190-200 in the market. Our government bore the burden. Inflation in Delhi is lowest in the country at 11.3 per cent while the national average is 13 per cent. It happened because we sold atta and pulses at discounted rates. We have increased our outlay in social sector. We will now give old age pension to an additional 1,00,000 people; we have increased the uniform subsidy to MCD and Delhi government school students. The government is not a (private) company that earns money by itself.
There is a feeling the government hiked taxes because there are no elections in sight?
I don't agree. We gave subsidy when the situation was really bad. And even when the Centre reduced LPG rates, we continued with the subsidy. But subsidies are not forever.
But you are already talking about reducing the LPG hike.
Roll back on subsidy is out of question but we found there was four per cent VAT on LPG. We are thinking of removing it. It will make LPG cylinder cheaper by Rs 12 to Rs 15.
Much of the revenue gap is because of the spending on the Commonwealth Games. Is it fair to tax Delhiites for the Games?
If we hadn't undertaken these projects, people would have said our government didn't do anything for the Games. Delhi has never been through such a big makeover. Look at the streetlights, roads, flyovers and the way the Metro is expanding. The Games will leave behind a huge legacy. Construction work could have been carried out in the next three-four years. But we are doing it in one go. All this requires funds. We did not get what we asked for (Rs 2,000 crore) from the Centre. We got only Rs 50 crore. But look at the brighter side. We will not have to undertake any major infrastructure projects in the coming years.
You could have spared the middle class and hiked taxes in the luxury segment.
We are doing just that. If we say bigger cars should be taxed more, it is to tell the people keeping too many cars is wrong. Some families own eight to ten cars. Why do you need eight cars for a single household? We are giving you Metro, use that. Don’t pollute the city.
Sporting events such as the Olympics have been big financial disasters. Montreal took 30 years to pay off its debt.
Our situation is different. We did not take any loans. We did use up our savings. But all projects are being funded with our own money. The funds that came from the Centre (through Jawaharlal Nehru National Urban Renewal Mission were already due to us. Hopefully, we will not have any deficit.