The 2022-2023 budget is your eighth presentation of the government’s financial report. During these years, the size of Delhi’s budget more than doubled from a level of ₹30,000 crore to almost ₹76,000 crore now. How was the trip ?
The trip was very interesting because we did not think in 2015 that Delhi could achieve such rapid growth. In the first budget that I presented, there were a lot of dreams but also an awareness that it would be difficult to achieve big goals. Indeed, in the past, the size of Delhi’s budget had grown by only ₹5,000 crores in five to seven years. In fact, starting in 2011, it went from ₹25,000 crore or so ₹30,000 crore. It was very depressing because it felt like if your budget increased by ₹1000 crore per year, how you will work. However, the government decided to be open to suggestions and the initial communication between the government and traders set the roadmap for VAT tax reforms and also helped to streamline the GST systems afterwards. . This consultation process has resulted in not achieving rapid growth, but also increasing the size of the state budget at a much faster rate in recent years.
You have floated the idea of having Delhi’s per capita income match that of Singapore by 2047. But Delhi has fallen one place to third place in terms of Indian states with the highest per capita income. higher. Is the dream achievable?
The fall of a place at the national level does not bother us. Our goal is to bring Delhi’s per capita rates to the same level as Singapore’s prevailing rates by 2047, and we are on track. We must note that our per capita income (at current prices) has increased by 16.81% to almost ₹4.02 lakh in FY22. This is a national income per capita of about ₹1.5 million. We need 14% growth per year to reach Singapore’s per capita value by 2047. We have already done better than that this year and with 20,000 new jobs coming into the system over the next five years, per capita growth will even increase by more than 20% over the next few years.
You mentioned 20 lakh new jobs. This year’s budget was also presented as the Rozgar budget. What is the strategy to provide employment opportunities to so many people in these difficult times?
We found the number – 20 lakh jobs in the next five years – after extensive research. Our economics team has done extensive research with the market. About 150 meetings were held with traders, associations, Delhi markets. We tried to understand how these segments will get the growth and what the government can do to get that growth. We have created a database of the number of jobs that can be created if their growth is restored. We have included in the budget all these sectors that would generate jobs. Thus, approximately 8 to 10 sectors have been identified to stimulate growth and job creation. These include retail, food and beverage, logistics and supply chain, travel and tourism, entertainment, construction, real estate, electronics, electric vehicle information and green energy. Implement policies focused on job creation ₹4,500 crores will be needed over the next 5 years. An expense of ₹800 crore is offered for all these programs for FY23. The target is to increase the percentage of Delhi’s labor force from 33% to 45% in the next five years.
Delhi’s budget seems to have missed the bus when it comes to relieving the common man of the current wave of price hikes, with inflation also exceeding RBI’s 6% tolerance level?
The state government has previously only worked for this to ensure that its citizens are not burdened with rising prices and falling incomes. We have reduced the electricity rate and in several cases have brought it down to zero. Water is freely available to many, women can travel for free on buses, school education has become almost free, healthcare is free and even if you have an accident all your expenses are covered by the government of the state. So, with all these efforts, we are in some ways helping the citizens of Delhi to fight against rising prices even with their limited incomes. We have been working on it for some time and are consolidating its coverage so that the benefit reaches as many people as possible.
As the size of Delhi’s budget grows, its revenue surpluses shrink. Does this indicate financial stress that the state can head towards?
We have a certain budget deficit, but we will cover it. Over the past two years, due to the pandemic, tax revenues have suffered. WE launched a new excise policy in November that will provide the state with a supplement ₹3,500 crore. We are also streamlining the property tax for home registration, which will provide additional revenue to the state. Additionally, we see huge potential in TPS collections. The measures that we had taken and some that will also come in this budget will help create more jobs and, as the market economy develops, taxes will also increase.
Regarding GST, is Delhi in favor of compensating states for an extended period?
This is not just the view of Delhi but of several states. The compensation payment by the Center is striking towards the middle of this calendar year. This will be a challenge for states. All states had waived their taxing rights to facilitate the implementation of the GST. You have to understand that with Covid or no Covid, if there was no GST at the initiative of the central government, then the states would have the right to take care of their economy according to the requirement. Once their rights have been abandoned, care must be taken that States do not starve.
Is the State in favor of merging two GST rates, namely 12-18%, as the Center is discussing with the States and the proposal may soon land before the GST Board?
These are still only proposals, but Delhi supports lower GST rates and higher compliance. Indeed, higher tax rates encourage evasion. Raising rates never gives a solution. AI (artificial intelligence) based enforcement and lower rates will only improve compliance and increase tax revenue. In the case of the merger of two GST rates, taxes may need to be increased for some goods and services and decreased for a few. It is not a fair system. Why merge the rates, why not lower the prevailing rates itself.
The budget does not seem to have focused on industrializing the state and making the state a big contributor to Atmanirbhar Bharat?
Delhi has limited opportunities for industrialization due to land resources and pollution control measures. So, the new industries coming to Delhi have their limits. Thus, in the budget, we proposed the concept of an electronic city. We will provide a space with a complete infrastructure where electronic companies can come and set up their manufacturing and assembly plants. It will be in plug and play mode so that the units can start activities quickly. We have also spoken with a few global players to set up their facilities there. We will also redevelop 25 notified non-compliant industrial areas over the next five years, where the focus will be solely on infrastructure development.
Health and education have long been central concerns of the government. Is there anything in the budget for these important areas?
We are consolidating our programs in these areas that started earlier. The government also provided a sum of ₹50 crores next year for a school science museum. Additionally, Delhi Teachers University has also started its work and will be offering BEd courses from next year. Also, more than 3 lakh students from 11th and 12th grades of Delhi public schools under the Business Blaster program have successfully worked on 51,000 business ideas and generated thousands of business ideas which these kids are working on continuously . The Business Blasters program in Delhi schools is also to be extended to private schools.
Download the app to get 14 days of unlimited access to Mint Premium absolutely free!