Bandh fallout

Saurabh Sinha / TNN / Nov 13, 2006, 00:37 IST

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The government is losing Rs 10-15 crore of VAT on each day as the city markets down their shutters.

NEW DELHI: If the Congress is worried that the resumed sealing drive may cost it dear politically, the state government is counting its monetary losses.
Delhi's finance minister A K Walia has estimated that the government is losing Rs 10-15 crore of VAT alone on each day the city markets down their shutters.
So the loss of VAT during the number of Delhi bandhs in the recent past could be anywhere up to Rs 100 crore now.And the future also looks uncertain with politicians still vowing to fight the sealing even as traders seem resigned to their fate.
"We collect up to Rs 9,000 crore every year and the average daily VAT collection is Rs 20 crore. Of this, about Rs 5 crore comes from sale of petrol which is not affected. But the balance gets affected on the bandh days,"Walia said.

Since the figure of tax cut itself is so high, the loss of business would be in hundreds of crores. The real worry is that if the sealing drive forces traders to move out of the city, Delhi's loss could be other states' gain.
In fact, on Wednesday Walia faced questions if the sealing of liquor shops was affecting the government's main second source of revenue — excise.
Last year, excise collection stood at Rs 1,015 crore and this fiscal the government has got about Rs 660 crore — a 12% hike — so far.

"Till now no shop has actually got sealed. Once that happens and the shop is then opened at a new — and legal — site, sales would certainly get affected,"said an official. Of the 137 applications to shift shops, 41 have already been allowed to do that.
Walia admits that the existing 493 liquor shops are insufficient to meet the city's demand and there are cases of liquor being brought in illegally from neighbouring states.
"While we are not opening any new shops at present, some existing ones may get shifted. We have allowed liquor shops to remain open from anytime after 10 am to 10 pm. Earlier the shops could open only at 1 pm,"said Walia.
The move would particularly benefit people in some remote areas where the liquor shops are few and far apart.
Interestingly, political parties of all hues are also scared of the financial implication of the ongoing sealing drive.
"Traders have traditionally made large donations to parties. How else did so many unauthorised showrooms sprout all over the city? Now things may change,"said an MLA.

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