Delhi govt survey to find avenues to bolster its income

The move comes a day after the government sent notices to around 10,800 companies in the city for paying lesser or no tax between January and March this year.

The Delhi government will conduct a study to find ways to improve revenues, deputy chief minister Manish Sisodia said on Wednesday.

Delhi deputy chief minister Manish Sisodia has appealed to all the companies to immediately deposit their taxes. He also said that the Delhi government will take stringent action against the defaulters. (Sanchit Khanna/HT file photo)

The move comes a day after the government sent notices to around 10,800 companies in the city for paying lesser or no tax between January and March this year. The Delhi government’s tax collection in January-March this year has gone down by over ₹2,000 crore compared to the same period last year.

On Wednesday, Sisodia, who is also Delhi’s finance minister, held a meeting, for the second consecutive day, to discuss ways to increase government’s revenue collection. Sisodia on Wednesday directed the Dialogue and Development Commission of Delhi (DDC) to prepare a detailed study to improve the revenue base in Delhi and submit its report in two months.

The DDC is a policy think tank of the Delhi government. Its chairperson is chief minister Arvind Kejriwal and vice-chairperson is Jasmine Shah, who is also the media advisor to the CM.

Talking about the scope of the study, Sisodia said the DDC would have to suggest short and long-term measures to improve revenue collection. He also directed DDC to consult with experts in the field and organisations working in public finance while carrying out the study.

According to Delhi’s economic survey for 2019-20, Delhi is ranked position is 19th in terms of its own tax revenue as the percentage (4.73%) of the gross state domestic product (GSDP) during 2018-19.

“For 2018-19, Uttar Pradesh’s tax revenue as percentage of GSDP is 9.1%, Kerala’s is 7.7%, Rajasthan 7.2%, Maharashtra 7.1% and Andhra Pradesh 7%. Looking at Delhi’s trend itself, its tax revenue to GSDP was 6.18% in 2009-10, which reduced to 5.38% in 2014-15 and further reduced to 4.73% in 2018-19. In comparison, the average tax revenue for all states as a percentage of their GSDP was 5.94% in 2009-10, which increased to 6.25% in 2014-15 and further increased to 6.69% in 2018-19,” the government said in a statement.

DDC vice-chairman Jasmine Shah said the Delhi government’s early call for opening the economy and a robust healthcare strategy has set the right conditions for an economic revival. “The DDC will perform a rigorous study on the improvement of the revenue base of Delhi. We will involve the field experts to perform this study. Today, the Delhi model of fighting against Covid-19 has become a model for across India and we are confident that with time and a proper strategy, we will be able to overcome the revenue deficit too,” he said.

In a bid to improve Delhi’s revenue deficit, the trade and taxes department of the Delhi government has started analysing the returns by taxpayers registered under GST. On Tuesday, Sisodia held a meeting with the officials, in which it was said that of the 15,000 taxpayers analysed so far, nearly 970 taxpayers have not filed returns for 2020-21 from January to March. The Delhi government has also found that this year, nearly 10,800 companies paid lesser or zero tax from January to March. Taking cognizance of these findings, the Delhi government has prepared a list of defaulters.

The deputy chief minister has appealed to all the companies to immediately deposit their taxes. He also said that the Delhi government will take stringent action against the defaulters.

“The Delhi government has evaluated 15,000 companies so far but in the future up to 7 lakh companies registered under GST will be evaluated. The Delhi government will take strict action against all the defaulters after the evaluation,” Sisodia said.