The note-ban rule announced by the Central government on November 8 last year may leave the Delhi government dry during the upcoming of the budget season. India Today reports reveal that Delhi’s already poor revenue collection went a stack down during December
The overall reduction in revenue collection during December 2016 in comparison to December 2015 was almost 16 per cent. And there is no sign of improvement of the situation in the coming months. The budget speech made by Delhi’s deputy CM Manish Sisodia says that the revenue target of `36,525 crore was set for the different revenue-generating departments. However, before the demonetisation exercise started, it was clear that the departments were going to miss the set target by a fair amount. Although the extra low revenue in December, has left the government in a lot of worries.
Just a few days ago, top Delhi government officials met to discuss the government’s fiscal health. A decision was taken to revise the revenue target for the second time this fiscal year, this time by over `3,5000 crore.
The previous target, revised in the month of November, was `32,950 crore against the target of `36,525 crore set in Manish Sisodia’s budget speech. If December 2015 is any trend, it could be difficult for the government to even match the `30,225 crore that was earned last year, as until December 2016, the revenue generated is only `22,460 crore. The biggest loss was seen in the collection of stamps and registration fees, which include land revenue as well. Under this head, the revenue target was `4,000 crore for the entire financial year, but only `2,497 crore was earned until December 2016.
Last month, only `252.58 crore revenue came in the coffers of the Delhi government. Compared to December 2015, when `480.45 crore in revenue was generated, December 2016 saw a loss of 47.43 per cent.
What is really making the government tense is the drop in the Value Added Tax (VAT) collection. The VAT is the biggest source of revenue for the Delhi government. This year, government set an ambitious target of `24,500 Crore, but, with only three months of the financial year remaining, has collected only `15,100 crore in VAT. In the month of December, only `1543 crore has come to government, while during the same month, last financial year, the VAT revenue was `1,745 crore. The loss, in the months after demonetisation was announced, was almost `200 crore, that is 11.54 per cent. Other sources of revenue like the excise tax and taxes on vehicle registrations also saw a drop in December 2016, though marginally.