Demonetisation: Delhi’s economic growth slows down for first time in five years

Delhi’s economic growth might slow down to 8.26% during 2016-17 from 8.82% the previous year due to demonetisation dampening the pace of development, the state’s economic survey said on Tuesday.

Delhi’s economic growth might slow down to 8.26% during 2016-17 from 8.82% the previous year due to demonetisation dampening the pace of development, the state’s economic survey said on Tuesday.

Finance minister Manish Sisodia will table the 2017-18 budget in the Delhi assembly on Wednesday. (Arun Sharma/HT File)

However, the national capital is projected to grow at a faster rate than the national average of 7.1% estimated by the Central Statistics Organisation, which is responsible for coordinating statistical activities in India.

Though the scrapping of high-value currency notes crimped consumption and slowed investment activity across the nation, central government data showed that the Indian economy grew 7% in the October-December period – much to the scepticism of economists across the globe.

The Arvind Kejriwal government is likely to scale up the tax collection target for 2017-18, although it failed to achieve the budgetary goal of Rs 24,000 crore for the current financial year. Sources said finance minister Manish Sisodia might hike the number to Rs 25,000 crore in his budget proposal, to be tabled in the Delhi assembly on Wednesday.

In June, Sisodia’s first full budget had raised the target to Rs 24,000 crore — a 30% hike compared to the Rs 18,500-crore target set for 2014-15.

The Economic Survey of Delhi tabled by the finance minister also said the capital’s per capita is estimated at Rs 3.03 lakh – three times the national average. It painted a rosy picture of state finance, pegging the fiscal surplus at 0.24% of the gross state domestic product for 2015-16 as against 0.04% the previous year. The revenue surplus came up to Rs 8,656 crore in 2015-16, as compared to Rs 6,075 crore in 2014-15.

According to the economic survey, tax collection registered a growth of 13.61% in 2015-16 as compared to 2.64% in 2014-15. The tax collection for the year 2016-17 was budgeted with a growth of 20.84% over the previous year.

In keeping with the Delhi government’s focus on public welfare, the budget for the education sector has gone up from Rs 4,799 crore in 2011-12 to Rs 10,690 crore in 2016-17. Education received the highest allocation that financial year, amounting to 23% of the total budget. Consequently, the per-student-per-annum expenditure incurred by the Delhi government on education has increased from Rs 29,641 in 2012-13 to 44,640 in 2015-16.

The per-capita health spending, or the money spent by the government on every Delhi resident’s healthcare, has gone up from Rs 1,936 in 2014-15 to Rs 2,999 in 2015-16.