‘Rozgar Budget to help Delhi reach Singapore per capita levels by 2047’
PremiumWe need 14% growth per year to reach per capita of Singapore prevailing in 2047. We have done better than that this year, says Manish Sisodia, Deputy CM, Delhi
The Delhi government presented its ₹75,800 crore budget for FY23 on Saturday, with an emphasis on generating jobs while making additional provisions for building education and health infrastructure and putting the state on a high-growth path.
In an interview, Delhi’s deputy chief minister Manish Sisodia said the state’s GDP is expected to grow 10.23% this fiscal from a 3.86% contraction in the previous year because of covid-related disruptions. He said that the administration is working towards its ambitious vision of making the national capital a productive and high-earning society that can match the city-state of Singapore in terms of per capita income. Sisodia said the government’s Rozgar Budget would create as many as 2 million jobs over the next five years. The minister also highlighted that despite eroding revenue surpluses and the end of GST compensation next year, the reform initiatives by way of its new excise policy and restructuring the property tax regime should provide it with enough funds to bolster development of the state. Edited excerpts:
The budget 2022-23 is your eighth presentation. During these years, the size of Delhi’s budget has more than doubled to close to ₹76,000 crore.
The journey has been very interesting because we did not think way back in 2015 that Delhi could achieve such fast growth. In the first budget that I presented, there were many dreams and the realization that achieving big goals would be difficult. This was so because, in the past, the size of Delhi’s budget had grown by a mere ₹5,000 crore in five to seven years. In fact, from 2011 onwards, it increased from ₹25,000 crore to just about ₹30,000 crore. This was very depressing as it gave a sense that if your budget increases by ₹1,000 crore per year, how you are going to work. However, the government decided to listen to suggestions, and the initial communication between the government and traders set the roadmap for tax reforms under VAT and also helped in streamlining GST systems later. This consultative process has resulted in not only achieving rapid growth but also scaling up the size of the state budget at a much faster pace in the past few years.
You want Delhi’s per capita income to match Singapore’s by 2047. But Delhi has dropped one place to the third spot among Indian states. Is the dream achievable?
The fall by one spot at the national level does not bother us. Our target is to bring Delhi’s per capita on a par with that of prevailing rates in Singapore by 2047, and we are on course. We have to see that our per capita (at current prices) has grown by 16.81% to close to ₹4.02 lakh in FY22. The national per capita income of about ₹1.5 lakh. We need 14% growth per year to reach per capita of Singapore prevailing in 2047. We have already done better than that this year and with 2 million new jobs coming into the system in the next five years, per capita growth will shoot up even higher at over 20% over the next few years.
You have talked about 2 million new jobs. The budget this year has also been billed as Rozgar Budget. What is the strategy to generate employment?
We have come up with the number after extensive research. Our economic team has done deep research. About 150 meetings have been held with Delhi traders, associations, markets. We have tried to understand how these segments will get the growth and what the government can do. We have created a database on how many jobs can be created if their growth is restored. We have included all these sectors in the budget that would generate jobs. So about 8-10 sectors have been identified for pushing growth and job creation. These include the retail, food and beverages, logistics and supply chain, travel and tourism, entertainment, construction, real estate, electronics, EVs information and green energy sectors. To implement the policies focused on employment generation, about ₹4,500 crore will be required during the next five years. An outlay of ₹800 crore is proposed for all these programmes for FY23. The aim is to increase the percentage of the working population of Delhi from 33% to 45% in the next five years.
The Delhi budget seems to have missed the bus when it comes to providing relief to the common man from the current spate of price rise?
The state government has earlier worked only for this to ensure that its citizens are not burdened with price rise and shrinking incomes. We reduced the rate of electricity and in several cases, brought it down to zero. Water is available free of charge to many, women can travel free in buses, school education has been made almost free, health is free, and even if you meet an accident, all your expenses are taken care of by the state government. So, with all these efforts, we, in some ways, are helping citizens of Delhi to fight the price rise even with their limited earnings. We have been working on these for some time and are consolidating its coverage so that the benefit reaches maximum people.
While the size of the Delhi budget has been increasing, its revenue surpluses are shrinking. Does it indicate financial stress?
We have some fiscal deficit, but we will cover it. In the last two years, due to the pandemic, tax collections suffered. We launched a new excise policy in November that will provide the state with an additional ₹3,500 crore. We are also rationalizing property tax for home registration, which will get some additional revenue to the state. In addition, we see huge potential from GST collections. The steps that we had taken and some also coming in this budget will help in creating more jobs, and as the market economy increases, so tax will also increase.
With regard to GST, is Delhi in favour of providing compensation to states for an extended period?
This is not only the view of Delhi but several states. The compensation payments by the Centre is ceasing by the middle of this calendar year. It will be challenging for the states. All states surrendered their tax rights to facilitate the implementation of GST. You should understand that with covid or no covid, if there was no GST on the central government’s initiative, then states would have the right to take care of their economy based on the requirement. When you get their rights surrendered, you have to look that states don’t starve.
Is the state in favour of merging two rates of GST viz 12-18% as is being discussed by the Centre with states, and the proposal may land before GST Council soon?
These are yet only proposals, but Delhi supports lower GST rates and higher compliance. This is because higher tax rates encourage evasion. Raising the rates never gives a solution. AI (artificial intelligence)-based enforcement and lower rates will only improve compliance and raise tax collections. In the case of merging two GST rates, taxes may have to be increased for certain goods and services and lower for a few. This is not a fair system. Why merge the rates? Why not bring down the prevailing rates.
The budget doesn’t seem to have focused on the industrialization of the state?
Delhi has limited scope for industrialization because of land resources and because of pollution measures. So new industries coming up in Delhi have their limitations. So, in the budget, we have come up with the concept of Electronic City. We will provide space with full infrastructure where electronic companies can come and set up their manufacturing and assembly plants. It will be on plug and play mode so units can start activities quickly. We have also spoken to a few global players to set up their facilities there. We will also redevelop 25 notified non-conforming industrial areas in the next five years, where the focus will solely be on developing infrastructure.
Health and education have been the focus of the government. Is there anything in the budget for these sectors?
We are consolidating our programmes in these sectors that were started earlier. The government has also provided a sum of ₹50 crore next year for a school science museum. Moreover, Delhi Teachers’ University has also started its work and going to provide BEd courses from next year. Also, over 300,000 students of class 11th and 12th of Delhi government schools under the Business Blaster programme worked successfully on 51,000 business ideas and generated thousands of business ideas on which these children are working continuously. The Business Blasters scheme in Delhi Schools is to be expanded to the private schools also now.
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