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‘New projects will have to wait’

It is going to be a difficult year financially, said Delhi’s finance minister Ashok Kumar Walia who will be presenting the state budget on March 22, reports Atul Mathur.

delhi Updated: Mar 05, 2010, 01:04 IST
Atul Mathur
Atul Mathur
Hindustan Times

It is going to be a difficult year financially, said Delhi’s finance minister Ashok Kumar Walia who will be presenting the state budget on March 22.

Shocked by a nearly 50 per cent cut in Central allocation to Delhi in the Union budget, he said his government will only focus on Commonwealth Games related projects. “All other projects and plans will have to wait,” he told the Hindustan Times. Excerpts from the interview:

In the year of the Commonwealth Games, the Centre’s assistance to Delhi has come down to almost half. How will you cope?

In the last financial year, we had got Centre’s assistance of Rs 2,000 crore for the Commonwealth Games and Rs 130.47 crore under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM). In this budget, we have got Rs 50 crore for the Commonwealth Games and Rs 903.63 crore under the JNNURM. We have also exhausted a large chunk of small savings fund available with us. We also pay about Rs 2,700 crore as interest on the Centre’s debt, which is about 17 per cent of our gross earnings.

We will get the JNNURM money only when the projects are complete and we produce the utilisation certificate. Most of the projects approved under this scheme are still on. All these things make our situation really tight. We will now have to be very careful about commissioning new projects and cut down on our expenditure.

You said increasing expenditure every year is a cause of concern. Are you exploring avenues to earn more by way of raising taxes?

As I said, increase in VAT from four per cent to five percent helped us generate more revenue. Once we have the new Delhi Excise Act in place, things will improve drastically for us. All these things are decided by the Cabinet in the pre-budget meeting. It will not be appropriate for me to comment on these issues before the budget.

Having won three consecutive elections, the government decided to do away with subsidies. Rates of power, water, bus and metro fares all went up. Is there more in store?

I will be presenting my seventh budget this year and the government’s intention has been to put less pressure on the public every time. We will have a Cabinet meeting to decide on these issues. I agree that in the current fiscal we did take certain steps like increasing water charges, bus fares, VAT and withdrew 10 per cent subsidy on electricity. These steps are expected to yield an additional Rs 1,200 crore to the exchequer next fiscal.

Given the current financial condition, will Delhi take up new infrastructure projects (not related to Commonwealth Games) in the next fiscal (2010-2011)?

There are a lot of projects related to the Commonwealth Games that already on in the city. We are holding meetings with all departments and they are submitting their requirements for the next financial year. We will try to accommodate whatever is must in the budget. Projects that are not directly related to the Commonwealth Games will have to wait. We will only consider need-based projects. And whatever is required, we will try to accommodate.

After a year of economic slowdown, how did Delhi fare this year in terms of revenue collection?

The previous year (2008-2009) was not very good for us due to slowdown across the world. But things improved slightly this year. Our collections have definitely been better than the last year. We have managed to achieve our collection targets. Our collection of value added tax (VAT) has improved and the excise collections also showed 29 per cent increase last month in comparison to the previous year. But with the increase in revenue, our expenditure has also increased, which is a cause of concern.

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