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Intense lobbying on for concessions

By Sujay Mehdudia

NEW DELHI, JULY 18. As the Sheila Dikshit Government gears up to present the annual budget in the Delhi Assembly on July 22, lobbying by various interest groups against certain measures aimed at garnering additional revenue could have an adverse impact on the already constrained financial situation.

Insiders in the Delhi Government said that even as the budget making exercise was already in full swing, various lobbies have become active in the corridors of power to get some kind of exemption or concessions from the Government. The Finance Minister, A.K. Walia, has already held several meetings in this regard to finalise the budget proposals that would be unveiled on July 22.

The economic survey would be presented on July 21 and the election of the Speaker will be held on July 20.

Sources said a number of revenue generation measures are expected to be put in place and no major concessions are likely to flow this time round.

The Delhi Government has already come under pressure from various sections for granting some kind of an incentive with promises to push the revenue up. It is likely that Ms. Dikshit will hold a final meeting on Saturday to fine tune the budget proposals and give her nod to them.

However, what has alarmed everybody is the reluctance of the Finance and Planning Departments to go ahead with certain revenue generating proposals, which are already in place in other States and fetching them good revenue.

For instance, the Right to use Act, lying unimplemented for the past almost two years, is stuck because of the reluctance to tax the caterers and tent owners. Dr. Walia has been under intense pressure from this lobby for not levying any kind of sales tax on them irrespective of the fact that expenditure on lavish weddings, parties and such related spending runs into several lakhs. Interestingly, a provision has already been made in the Act to exempt those with an income of Rs. 5 lakh.

The tent owners and caterers lobby, it is learnt, had held up the Act. Now the Central Government has gone ahead and imposed service tax on them showing the way to the Delhi Government. Similarly, it is learnt that the Transport Department had come up with a proposal to impose passenger's goods tax on commercial vehicles that transit through Delhi every day.

These vehicles have to pay such a tax in other States and this step was aimed to streamline the entry of such vehicles and also generate revenue for the Delhi Government.

However, for some strange reason, the Finance Minister is not inclined to impose this tax on commercial vehicles, a majority of which do not belong to Delhi.

On the other hand, there are the traders of the electronics goods, a majority of them from the Bhagirath Place market and the Lajpat Rai Market in Old Delhi.

These electronic goods dealers are seeking lowering of sales tax from 12 per cent 8 per cent. They have even met the Chief Minister in this regard and promised to double the revenue.

However, officials are not taking the promise held out by this trade on the face value, as the earlier experience has not been very pleasant. They pointed out that the then Finance Minister, Mahinder Singh Saathi, had lowered the sales tax on paper from eight to four per cent after the traders promised to double the revenue.

However, the revenue fell by almost 50 per cent and nobody lived up to their promise to increase revenue receipts. "The era of concessions and exemptions is over.

It is now time to indulge in progressive taxation and expand the tax base if the pressure on revenue has to be relieved.

The borrowings have to come down otherwise the State could face a tough time on the financial front," a senior official remarked.

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