New Delhi: Note ban has hit the national capital's economic growth and "forced" the city government to cut spending on various developmental projects by about Rs 4,100 crore, Deputy Chief Minister Manish Sisodia said on Wednesday.
Sisodia, who in his Budget speech was severely critical of the demonetisation decision, said the cash crunch led to "economic scarcity" and flight of labourers from the city, who were the "worst-hit section".
While the Aam Aadmi Party has been extremely vocal against the decision announced by Prime Minister Narendra Modi on November 8 last year, for the first time, it has official data at its disposal to back its persistent claims.
"At Rs 16,500 crore, revised plan outlay is around 4,100 crore less than the 2016-17 budget estimate of 20,600 crore," he said.
He said "despite" demonetisation, the city's economy was likely to grow at the rate of 12.76 percent in the current fiscal i.e. 2016-17.
However, at constant prices (inflation adjusted), the rate would be 8.26 percent, down from 8.82 per cent registered in 2015-16.
"Economy cannot be run by tossing coins, you need to do brainstorming for that. Note ban was one such measure. Labourers were the worst hit and I came across instances where few committed suicides.
"GSDP (constant prices) has gone down but it is till more than country's projected growth rate. We would not have to reduce the plan outlay had demonetisation not been executed," he said.
Since the Arvind Kejriwal government has abolished the plan and non-plan expenditure heads and presented the budget, its third, in terms of revenue and capital classification, area-specific targets for tax collection were not available. The budget though projected the tax revenue collection for 2017-18 at Rs 38,700 crore which is 19.33 per cent higher than the 2016-17 revised estimates at Rs 32,430 crore.
Low tax collection has remained a concern area for the government as it has failed to achieve the targeted VAT collection of Rs 24,000 crore for the current financial year. It has been revised to Rs 20,245 crore.
"GST has been approved. With its implementation from July 1, 2017, we expect a positive impact on tax revenue collectionof the government," Sisodia said.
The projected tax revenue collection is based on the belief that there will be tax buoyancy on implementation of the Goods and Services Tax (GST), he said.
"Considering these factors no further tax proposal is being mooted during the financial year 2017-18," he said. While no new tax was imposed, existing tax rates were also not enhanced.
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