The Delhi government has decided to scrap some infrastructure projects promised by the Shiela Dikshit government in the last budget, channelling the money to its promised subsidies on electricity tariffs amid falling revenue collections.
The Aam Aadmi Party government has decided to reduce the plan budget of 2013-14 by removing some projects that failed to take off in this financial year and utilise the money for ‘other pressing needs’. Chief minister Arvind Kejriwal has also cancelled ‘frivolous’ projects launched by the previous government but hasn’t specified on the details.
Delhi government’s plan budget was estimated at Rs 16,000 crore for 2013-14.
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Officials said the decision to slash electricity tariffs by half for almost 85% of Delhi, who consume less than 400 units of power in one billing cycle, will force the government to cough up an additional Rs 201 crore in the last quarter of 2013-14, on top of the existing Rs 500 crore subsidy on frugal consumers.
“Subsidy is announced when the budget is presented and money is kept for the purpose. Since the government announced the subsidy in the last quarter of the financial year, it has to reduce allocation made to other departments and divert money under this head,” said a senior Delhi government requesting anonymity.
“Money kept aside for construction of hospitals, schools and roads promised in the budget, which haven’t started, will be diverted,” the official added.
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The problem has been made more acute by the economic slowdown which has hit the government’s revenue collections badly, with a shortfall of almost Rs 3,000 crore.
The government had expected to collect Rs 30,600 crore as taxes but its collection only stood at Rs 17,400 crore on December 31. Officials said they were not sure if tax collection would touch the 2012-13 figure of Rs 23, 900 crore, since there was a heavy downfall in the sale and purchase of properties, registration of new vehicles and collection by VAT and excise departments.
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