With an aim to boost revenue that was restricted due to Covid-19 pandemic, Delhi Deputy Chief Minister Manish Sisodia on Wednesday directed the Dialogue and Development Commission (DDC) to carry out a detailed study on measures to improve Delhi government’s revenue base.
Sisodia said that DDC should suggest short and long-term measures to improve the revenue base of Delhi. The deputy CM also directed the DDC to present its findings within two months.
Delhi has among the higher per capita incomes in the country, but holds 19th position in terms of own tax revenue to ‘gross state domestic product ‘ (GSDP) ratio, said Sisodia, adding that DDC should consult with leading experts of the field and relevant organisations in public finance to carry out this study so as to present a holistic analysis of the current situation and improvement measures that hold the maximum potential.
Citing data from Delhi’s economic survey 2019-20, he said that as per the economic survey, though Delhi is one of the highest per capita income states in the country, its position is 19th in terms of own tax revenue as percentage of GSDP (4.73per cent during 2018-19.
“The tax revenue as percentage of GSDP in 2019-20 are Uttar Pradesh 9.1), Kerala (7.7), Rajasthan (7.2), Maharashtra (7.1) and Andhra Pradesh (7.0),” he said.
Looking at Delhi’s trend itself, its tax revenue to GSDP was 6.18 per cent in 2019-10, which reduced to 5.38 per cent in 2014-15 and further reduced to 4.73 per cent in 2018-19, he said, adding that in comparison, the average tax revenue for all states as a percentage of their GSDP was 5.94per cent in 2009-10, which increased to 6.25per cent in 2014-15 and further increased to 6.69per cent in 2018-19
"There is scope for improving tax to GSDP by improving the revenue base. DDC may carry out a detailed study on all contributing factors by analysing all relevant tax-related data of GNCTD and suggest short and long-term measures that need to be taken to improve the revenue base in GNCTD,” he said.
Commenting on this development, DDC vice-chairman Jasmine Shah said, "Delhi government's early call for opening the economy and a robust healthcare strategy has set the right conditions for an economic revival,”
“The DDC will perform a rigorous study on the improvement of the revenue base of Delhi. We will involve the field experts to perform this study. Today, the Delhi model of fighting against COVID-19 has become a model for across India and we are confident that with time and a proper strategy, we will be able to overcome the revenue deficit too," he added.
In a bid to improve Delhi’s revenue deficit situation, the trade and taxes department of Delhi government under the directions of the Finance Minister, has started analysing the return filing status of taxpayers registered under (Goods and Services Tax) GST.
Sisodia held a meeting on Tuesday with the officials of the department where it was presented that around 15000 taxpayers were analysed and nearly 970 taxpayers have not filed returns for 2020-21 from January to March.
The Delhi government has also found that this year nearly 10800 companies paid lesser or zero tax from January to March. Taking cognizance of these findings the Delhi government has prepared a list of defaulters.
Sisodia has appealed to all the companies to immediately deposit the taxes. He also said that the Delhi government will take stringent actions against the defaulters. Delhi has till now evaluated 15,000 companies but in the future evaluation of seven lakh companies registered under GST will be done.