Tax revenue in Delhi fell by almost 20% in the previous financial year

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The Covid-19 pandemic has hit the Delhi government’s tax revenue and caused an almost 20% decline in tax revenue in the fiscal year 2020-21, according to the economic survey report presented Friday by the Deputy Chief Minister Manish Sisodia at the Delhi assembly.

The report states that Delhi government’s tax collection recorded negative growth of 19.53% in 2020-21 (provisional), compared to negative growth of 0.16% in 2019-20. He attributed the decline in tax revenue collection to the pandemic.

“All components of tax revenue have fallen sharply. Motor vehicle tax recorded a negative growth of 13.96%. GST (including VAT and other taxes such as luxury and entertainment) recorded negative growth of 19.46%. State excise tax revenue recorded a negative growth of 18.94%. Stamps and registration tax (including land revenue) recorded the largest negative growth of 22.91% in 2020-21 (provisional). Tax collection for the year 2021-22 has been budgeted with a growth of 46.13% compared to the previous year,” the report states.

The drop in tax revenue comes at a time when the city is facing an unprecedented wave of the Covid-19 pandemic (April-May 2021), which is straining health infrastructure. The government had to spend more on health infrastructure, oxygen supply, medicine and equipment.

In the wake of the Covid-19 wave, the Delhi government’s debts have also increased. “The Delhi government received a small savings loan from 9500 crore in 2020-21 (provisional) compared 4,540.60 crores in 2019-2020,” the report states.

The economic survey pointed out that despite all this, Delhi has kept its income surplus constant – although it has been reduced to 1,449.98 crore in 2020-21 (provisional) compared to 7,498.79 crore in 2019-20. “The budgeted revenue surplus for 2021-22 (BE) is 1,270.74 crore or 0.14% of GSDP (Gross/Net State Domestic Product),” the report said.

Funds received from the central government have gone to 11,458.60 crores in 2020-21 (provisional) compared to 9,473.05 crores in 2019-20.

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