Tax revenue in Delhi plummeted nearly 20% in previous fiscal

The report said the tax collection of the Delhi government registered a negative growth of 19.53% during 2020-21(provisional), as compared to the negative growth of 0.16% in 2019-20. It

The Covid-19 pandemic has hit the Delhi government’s tax revenue and caused a nearly 20% dip in tax collections during the 2020-2021 fiscal, according to the Economic Survey report presented by deputy chief minister Manish Sisodia in the Delhi assembly on Friday.

The decline in tax revenue came at a time when the city faced an unprecedented wave of the Covid-19 pandemic (April-May 2021), which put a huge strain on the health infrastructure. (Representational image) (Photo: iStock)

The report said the tax collection of the Delhi government registered a negative growth of 19.53% during 2020-21(provisional), as compared to the negative growth of 0.16% in 2019-20. It attributed the decline in tax revenue collection to the pandemic.

“All components of tax revenue were sharply declined. Motor vehicles tax has shown a negative growth of 13.96%. GST (including VAT and other taxes such as luxury and entertainment) recorded a negative growth of 19.46%. Tax collections under state excise recorded a negative growth of 18.94%. Stamps and registration tax (including land revenue) recorded the highest negative growth of 22.91% in 2020-21(provisional). The tax collection for the year 2021-22 was budgeted with a growth of 46.13% over the previous year,” the report said.

The decline in tax revenue came at a time when the city faced an unprecedented wave of the Covid-19 pandemic (April-May 2021), which put a huge strain on the health infrastructure. The government had to spend more on health infrastructure, oxygen supply, medicines and equipment.

In the wake of the Covid-19 wave, the Delhi government’s loan liabilities also increased. “Delhi government has received small saving loan of ₹9,500 crore during 2020-21(provisional) as against ₹4,540.60 crore in 2019-20,” the report said.

The economic survey underlined that despite all these, Delhi maintained its consistent revenue surplus — although it reduced to ₹1,449.98 crore during 2020-21 (provisional) as compared to ₹7,498.79 crore in 2019-20. “The budgeted revenue surplus for 2021-22(BE) is ₹1,270.74 crore which is 0.14% of GSDP (Gross/Net State Domestic Product),” the report stated.

The funds received from the central government increased to ₹11,458.60 crore in 2020-21 (provisional) as compared to ₹9,473.05 crore in 2019-20.