A day after releasing a book highlighting the achievements of the Aam Aadmi Party (AAP) government in the last two years, the Delhi Secretariat on Wednesday started gearing up for the Delhi budget, which is likely to be tabled in the first week of March.
Deputy Chief Minister Manish Sisodia, who is also the Finance Minister, held a meeting with the Heads of Departments on Wednesday.
VAT collection low
Posting photos of the meet, Mr. Sisodia tweeted: “Every provision carefully being reviewed, it will be a symbol of People Centric Governance. Efficient utilization of tax with honesty and transparency has always been our driving force. Really excited about Delhi Budget 2017 [sic]”
The revenue of Delhi comes mainly from tax collection. Sales Tax and Value Added Tax (VAT) contributes around 60% of the revenue.
The VAT collection is slightly low and the officials aren’t optimistic that it will meet its target.
The government had initially set the target of ₹24,500 crore in the budget estimate, it was forced to revise the target to ₹20,800 crore, with a growth rate of 2.7%.
“Around ₹17,500 crore have been collected.
The target might not be met” said an official. Some officials also blamed demonetisation for the low collections.
In November and December, the time when demonetisation was announced, it saw a negative growth in collections.
As per government records, the VAT department collected ₹1,850 crore in November 2015. In 2016, the collection in November surged by 15% to ₹2,025 crore. However, the December collections fell from ₹1,757 crore in 2015 to ₹1,665 crore in 2016. But January saw a further dip.
Mr. Sisodia also blamed demonetisation for the dip: “Because of demonetisation. Businesses are down by 20-30%. Traders have been hit badly.”
Focus on education, health
In 2016, the AAP government had presented a ₹46,600- crore annual budget and out of the total amount, it had set aside ₹10,690 crore for education while ₹5,259 crore was allocated for health.
For the 2017-18 budget, the Delhi government has decided to do away with the Plan and Non-Plan expenditure classification and replace them with ‘Capital and Revenue’. Like last year, education and health sectors are likely to get a big chunk of the budget.
