Sisodia: Covid dealt a body blow to Delhi’s economy, revenue down 23%
Deputy chief minister Manish Sisodia on Wednesday said the Delhi government has received about 23% less than the estimated revenue in the current financial year due to the ongoing Covid-19 pandemic, which also reduced the state’s collection by nearly 41% in 2020-21.
Addressing a press conference, Sisodia, who is also the national Capital’s minister of trade and taxes, said the Goods and Services Tax (GST) collection of the Delhi government in the current financial year decreased by 23%. “Not just that, Delhi’s VAT (value added tax) collection came down by 25%, excise collection by 30%, stamp collection by 16%, and motor vehicle tax collection by 19%. Fiscal years 2020-21 and 2021-22 have been highly affected by Covid-19 from the perspective of revenue,” he said.
The Delhi government, however, did not share absolute numbers for the collected tax.
The minister said that despite Delhi contributing ₹1,40,000 crore as Central taxes, it gets only ₹325 crore in return from the Central government. “While we get peanuts, other states get 42% of their share. In fact, Delhi government’s revenue will be further reduced by ₹8,000 crore as the Central government will stop GST compensation from next year,” he said.
Economic activity in the entire country came to a standstill when the Central government imposed the first nationwide lockdown in March last year. In April-May this year, as Delhi became one of the worst-hit states during the second Covid-19 wave in the country, the Aam Aadmi Party government imposed another round of strict lockdown to curb contact between people and bring the daily case count down.
“In 2020-21, we received revenue that was 41% less than our budget estimate, and because of this, except for salaries and Covid-related expenses, we put most other expenses on hold. If we look at this fiscal year (2021-22), we are currently 23% below the budget estimate. We had estimated a very moderate budget this year. The budget estimate was much less than last year, yet the tax collection is less than what it should have been by now. It is a very concerning situation,” he said.
Sisodia said the government is still withholding most expenses except salaries and Covid-related expenses. “The government is trying to cut down on expenses wherever possible. The only relief we expect is now from the new excise policy which is likely to give the government about ₹3,500 crore more annually. As part of the new excise regime, we merged excise duty and VAT that people usually evaded, into licence fees. Till now the license fee was very nominal-- ₹8 lakh--and then there were 250%-300% excise fees and VAT, which were evaded by many,” he said.
“In Delhi, after 2016, under the Kejriwal government, no new liquor shops have been opened. In some municipal wards, there were 10-15 liquor shops, while in some wards, there were none. The pattern was such that in the wards where there were no shops, illegal liquor shops would function. There were approximately 850 legal shops and 2,000 illegal shops operating out of people’s houses and godowns. We tried to stop this through the excise department. We caught approximately 700,000 bottles of liquor in one year. About 1,864 FIRs were lodged and 1,000 vehicles were confiscated,” he said.