Delhi economic survey: As city gets more affluent, govt targets rise in revenue
The Delhi government is looking to boost its coffers this fiscal by increasing its target for revenue collection by 23% over the previous year, even as Delhiites continue to get affluent with its per capita income seeing a rise of nearly 10%.
According to the Economic Survey of Delhi 2017-18, the Delhi government is targeting a revenue collection of Rs 42,216 crore for 2017-18, compared to the Rs 34,345 crore it received in 2016-17. However, the survey indicated a major aberration in the government’s tax collection, which saw a growth of only 3.03% in 2015-16 against that of 13.61% in 2015-16.
Explaining the low rate of tax collection in last fiscal, principal secretary (finance) SN Sahai said that it was majorly caused due to “refunds”. “The rate of increase slowed down in 2016-17 because the government had to pay a significant amount in refunds. There were a lot of court directions in which refunds are needed to be given to the complainants and other parties, that took a huge toll on the rate of tax collections,” he said.
Government officials also blamed last fiscal’s slump in tax collection on demonetisation that was announced by the Centre in November 2016. During the same period (2016-17), there was also a 32.84% slump in the growth rate of non-tax revenue.
However, the government is hoping to register a growth of 19.33% in tax collections in the current fiscal (2017-18) by the end of March.
“The government’s tax collection was Rs 30,225 crore in 2015-16, which saw a marginal increase of Rs 31,140 crore in 2016-17. But, this is going to improve steeply in the current fiscal with a tax revenue pegged at Rs 38,700 crore,” Sahai said.
The survey also said that around 75% existing value added tax (VAT) dealers have migrated to Goods and Services Tax (GST) up to December 2017. GST was rolled out in Delhi from July 1 last year.
Ahead of the Delhi Budget which will be tabled on Thursday, the Aam Aadmi Party (AAP) government stated that it is expecting the city’s Gross State Domestic Product (GSDP) to grow at a rate of 11.22% in 2017-18 over the last fiscal (2016-17).
For three consecutive years, the average per capita annual income of the National Capital has remained more than Rs 2.5 lakh, making it the second most prosperous state in India, the survey claimed. It is almost three times of the national average. From Rs 2.71 lakh in 2015-16 and Rs 3 lakh in 2016-17, the survey has estimated the city’s per capita income to rise to Rs 3.29 lakh by the end of the current fiscal.
Sahai said that the increase in targeted revenue was also because of GST as now even the services sector comes under the taxable bracket.
The outstanding debt of the Delhi government has increased by over Rs 8,000 crore in the last 10 years, according to the survey. The city government had an outstanding debt of Rs 25,338.96 crore in 2007-08, equalling 16.04% of its GSDP.
Despite the increase in debt, the report claimed that the situation was “under control” in the National Capital.
According to the survey, over 16% households in the national capital do not have access to piped water supply despite the Delhi government’s promise of ensuring the same by the end of 2017. Presenting the budget last year, Delhi deputy chief minister Manish Sisodia had resolved to provide piped water supply to all authorised and unauthorised colonies as well as the JJ clusters by the end of 2017.
The survey emphasised on the increase in expenditure on education, number of schools, student enrolment and student-teacher ratio. According to the survey, the total investment in the education sector has increased by more than double in the last five years — from Rs 5,491 crore in 2012-13 to Rs 11,300 crore in 2017-18.
“This is the highest priority sector for the government, which got the biggest share of allocation -- 23.54% of the total budget in 2017-18,” the survey said.