Tax collection, GSDP up, inflation low, says Delhi economic survey

Delhi's finance minister highlighted rise in per capita income, GSDP, and reductions in inflation and unemployment rates, attributing success to AAP government.

Delhi’s finance minister Atishi cited the rise in the city’s per capita income and its economic output and reductions in inflation and unemployment rates to contend that the Aam Aadmi Party (AAP) government had worked for the people as she took shots at the central government and the lieutenant governor, whom she accused of “leaving no stones unturned to create obstructions”.

The document stated the city’s per capita income is projected to have increased from ₹4,30,120 in 2022-23 to ₹4,61,910 in 2023-24, its gross state domestic product (GSDP) is estimated to have risen by 9.17% over the year-ago period, and its inflation rate in the 2023 calendar year was 2.81%, compared to 5.65% nationally. (Representational image)

Atishi was speaking while tabling the Economic Survey of Delhi 2023-24 at the Assembly.

The document stated the city’s per capita income is projected to have increased from ₹4,30,120 in 2022-23 to ₹4,61,910 in 2023-24, its gross state domestic product (GSDP) is estimated to have risen by 9.17% over the year-ago period, and its inflation rate in the 2023 calendar year was 2.81%, compared to 5.65% nationally.

“The survey shows that the per capita income of the people, the revenue of the government has increased, and the budget of the government is in profit. I want to tell the Centre and its LG that despite all their efforts, the development of the people of Delhi will not stop till Arvind Kejriwal is the chief minister,” the minister said.

“During the period covered by the Economic Survey 2023-24 the LG, Centre, and government officers did not leave any stone unturned in obstructing the works of the Delhi government,” Atishi added, referring to a running feud with the office of LG VK Saxena and bureaucrats, especially since their effective control was placed outside of the elected administration’s control when parliament cleared the GNCTD Act.

“Various schemes were stopped, research fellows of Delhi assembly were removed, tests and medicine supply in mohalla clinics were stopped. The Centre brought an ordinance to snatch control of officials given to the Delhi government by the Supreme Court. Officials were threatened not to work for the Delhi government. Economic Survey presents data which shows that in the last one year, despite all their efforts the economy of Delhi has increased at a record pace,” Atishi said.

The Delhi government is scheduled to present its annual budget 2024-25 in the assembly on Monday. The budget of 2023-24 was ₹78,800 crore. The ongoing budget session of the Delhi assembly was extended till March 8 to allow discussions on the budget besides other legislative businesses.

To be sure, the 22% growth in per capita income between the 2021-22 and 2023-24 financial years that the government cited in the House was because of a low base effect. Per capita income had contracted in even nominal terms (by 9.4%) during the pandemic-affected fiscal year of 2020-21. This led to high growth figures of 16.7% and 14.3% in 2021-22 and 2022-23. Nominal per capita income increased by 7.4% in 2023-24 after the base effect was over.

“The GSDP (gross state domestic product) of Delhi at current prices during 2023-24 is likely to reach ₹11,07,746 crore at a growth of 9.17% over 2022-23. The GSDP of Delhi in 2022-23 was ₹10,14,000 crore. In post-Covid times, our real GSDP grew at 8.76% in 2021-22 and 7.85% in 2022-23, faster than the rest of the country,” Atishi said, adding that Delhi’s population constitutes 1.5% of India’s population while its GSDP is nearly 3.9% of the country’s GDP.

To be sure, the advance estimates for 2023-24 released on March 1 show that Delhi’s real GDP is 14.7% above 2019-20 levels, which is lower than the 19% growth in the same period at the all-India level.

The Economic Survey of Delhi, a document prepared by the planning department of the Delhi government with sector-wise inputs from different departments regarding policy initiatives of the government, is usually presented in the Delhi assembly before the annual budget, and is a comprehensive annual report on the performance of the state economy and work and achievements of the government.

The finance minister said Delhi’s tax collection has registered a growth of 18% during 2022-23. In 2021-22, Delhi recorded a revenue surplus of ₹3,270 crore; which increased to ₹14,457 crore in 2022-23. However, the revenue surplus was expected to decrease to ₹5,769 crore in 2023-24, according to the estimates presented in the budget last year.

The ratio of interest payment to revenue receipts declined to 5.21% in 2022-23 from the high ratio of 11.20% in 2012-13. This number was expected to decrease further to 4.9% in 2023-24 according to the budget presented last year.

“Delhi’s unemployment rate in 2020-21 (post Covid) was 6.3%. It was 1.9% in 2022-23,” the minister said, adding: “Each family saves thousands of rupees every month due to the free services. The savings of the families are used by the families in meeting other expenditures and the money circulates in the economy”.

Delhi government’s revenue receipts consist of tax revenue, non-tax revenue and grants-in-aid/other receipts from the Centre. The tax revenue includes the receipts under GST, value added tax, stamps and registration fees, state excise and motor vehicle tax. These taxes together account for 75.53% of the state government’s total revenue receipts during 2022-23 and was estimated to be 85% in 2023-24 according to the budget presented last year.

Leader of the Opposition in the Delhi assembly Ramvir Singh Bidhuri said the report is a mere jugglery of numbers. “Delhi’s per capita income has always been high because it is the national capital. Even before the AAP was born, Delhi had a very high per capita income. The AAP government has not played any significant role in increasing the per capita income; it is happening due to the welfare policies of Prime Mnister Narendra Modi’s government and a pro-development environment created by the Centre,” Bidhuri said.