Reeling under huge cost overruns for the Commonwealth Games projects, Delhi goverment has sought a special assistance of Rs2,000 crore from the Centre.
Reeling under huge cost overruns for the Commonwealth Games projects, Delhi goverment has sought a special assistance of Rs 2,000 crore from the Centre in the Union Budget to meet its revenue shortfall.
Delhi government has written to the Union finance ministry requesting it to help tide over the situation arising out of huge spending on infrastructure development in the run-up to the mega sporting event, finance minister A K Walia said.
"We have sought over Rs 2,000 crore from the Centre in the Union budget as special assistance to meet the growing expenses on account of the Games," Walia told PTI in an interview.
The minister also forecast a financial shortfall in the next fiscal and said the government had small savings of Rs11,000 crore which helped it to a great extent in meeting the increasing expenses on Games-related projects this year.
"The small saving fund helped us in tide over the situation. As the small saving fund is going to be exhausted soon, either we will have to increase our revenue generation or or cut down on expenses," he said.
Officials in the finance department said cost-overruns of almost all the projects relating to the Games have been making a severe dent on the exchequer.
The economic slowdown also had a severe impact on its finances as the city government's revenue generation reported a fall of over Rs 1,300 crore in tax collection last fiscal.
However, revenue collection improved marginally this fiscal after government hiked bus fare, water tariff and withdrew power subsidy to certain categories of consumers, besides hiking Value Added Tax on over 100 items.
In view of the dip in tax collection, the Centre has already given a plan allocation of Rs 2,435.68 crore to the city government in the last Union Budget.
As per the latest data, the city government collected a total tax revenue of Rs 8394.2 crore in the first eight months of 2009-10, which is an increase of 3.4 per cent comparing to the corresponding period of the last fiscal.
On whether the government was considering totally withdrawing subsidy on power and cooking gas or examining increasing tax in certain areas to enhance revenue generation, Walia only said no such decision has been taken so far.
"There are certain areas (to enhance the revenue generation). Whether that should be implemented now or not, that has to be seen. We already took certain steps to increase revenue... Now, we should keep in mind not to put any more pressure on the public," he said.
However, the minister did not elaborate on whether there will be anymore increase in tariff and taxes in the upcoming budget or not. The Delhi budget will presented in the assembly on March 22.
Chief minister Sheila Dikshit had earlier indicated that the VAT on luxury items including high-end cell phones, watches and pens will be increased substantially in the budget for 2010-11.
Last month, government had increased VAT from 4% to 5% on 120 items, including food, to mopadditional resources to the tune of Rs 500 crore.
Asked how the government was planning to tackle the situation, he said the government has directed all departments to ensure efficient use of money allocated to them.
"We must ensure that money allotted to various departments are utilised properly. We must focus more on quality of our works," he said adding that he has asked the departments to conduct a thorough quality check of all the works by a third party.
"If work is not done properly, there must be action against the guilty," he added.
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