Covid hit on Delhi less adverse than rest of India: Eco Survey

The survey also claims that Delhi’s per capita income has gone up by 16.8% between 2020-21 and 2021-22.

The pandemic’s economic impact on Delhi has been less adverse than what it was in the rest of the country, and the growth rebound has been higher, according to the Economic Survey of Delhi presented in Delhi assembly on March 25.

The Survey cited that high vaccination rate played a major role in minimising loss of lives, boosting confidence in the economy towards reopening of activity and containing the sequential decline in output due to second wave. (AFP)

While all-India GDP [gross domestic product] suffered an annual contraction of 6.6% in real terms in 2020-21, Delhi’s GSDP [gross state domestic product] went down by just 3.9% that year. In 2021-22, Delhi’s GSDP growth rate is expected to be 10.2% compared to 8.9% at the all India level. This means Delhi’s 2021-22 GSDP will be 6% more than the pre-pandemic value of 2019-20. All-India GDP in 2021-22 is expected to have grown by just 1.8% over the pre-pandemic value.

“Advance estimates suggest that Delhi’s economy is expected to witness real GSDP expansion of 10.23 % in 2021-22 after contracting in 2020-21. This implies that overall economic activity has recovered past the pre-pandemic levels,” the economic survey, which was presented by deputy chief minister Manish Sisodia, who also holds the finance portfolio, stated.

Where the money comes from

The Survey cited that high vaccination rate played a major role in minimising loss of lives, boosting confidence in the economy towards reopening of activity and containing the sequential decline in output due to second wave.

“With the economy’s return to normalcy brought closer by the successful mega vaccination drive, hopes of a robust recovery in services sector, consumption, and investment have been rekindled. Overall economic activity in Delhi has recovered more faster compared to national past the pre-pandemic levels. In the year 2021-22, a sharp recovery of real GSDP of Delhi with double digit growth is based on a low base effect and inherent strengths of the economy,” the survey underlined.

The survey also claims that Delhi’s per capita income has gone up by 16.8% between 2020-21 and 2021-22. Because these are nominal growth numbers, they do not take into account the inflationary impact in per capita incomes. Real per capita income growth, which makes adjustments for inflation, is likely to be around 9.4%, once the nominal growth component — difference between GSDP growth at current and constant prices — of 7.4 percentage points is subtracted from the nominal per capita GDP growth number.

To be sure, even in real terms, per capita incomes in Delhi are likely to have gone above pre-pandemic levels. This can be seen from the fact that per capita GSDP at 2011-12 prices in 2021-22 is expected to be ₹299,231 compared to the 2019-20 level of ₹293,145.

“The average Per Capita Income of Delhi is almost three times higher than the Per Capita Income of India. The Per Capita Income of Delhi is ranked at 3rd place among States/ UTs while Goa stood at 1st place and Sikkim at 2nd place”, the Survey said.

Delhi’s performance on fiscal indicators – they include parameters such as tax collection, government spending and deficit and debt levels – for 2021-22 and 2022-23 will be known on March 26 when the Budget is presented in the assembly. The Budget will give Revised Estimates (RE) for 2021-22 and Budget Estimates for 2022-23. The Survey has just reiterated BE numbers from 2021-22 which project that Delhi will continue to remain a revenue surplus state and is expected to see an increase in the share of gross fiscal deficit to GSDP from 1.27% in 2020-21 (provisional) to 1.62% in 2021-22 (BE). Delhi’s own tax revenue is expected to have increased from ₹29,425.3 crore (provisional) in 2020-21 to ₹43,000 crore (BE) in 2021-22.