Delhi govt asks departments for plans to raise non-tax revenue

NEW DELHI: With the Covid pandemic stretching Delhi government’s finances, all departments have been asked to generate more non-tax revenue. Every department would have to submit an action plan within two weeks on the same.
The pandemic has dealt a body blow to the state government’s financial health. The second wave of Covid this year and the lockdown to curb its exponential growth have resulted in Delhi government’s collection declining, while its expenditure has gone up massively due to the implementation of relief and other measures.
In a circular issued on Thursday, the finance department has informed all departments that the “Covid crisis has stretched state finances by impacting both tax and non-tax collections.In this context, a need has arisen to augment non-tax revenue, which is currently at 2.7% and 2.9% of state’s total revenue collection in 2019-20 and 2020-21, respectively”.
The finance department has stated that the major components of non-tax revenue are interest charged on loans or advances, and dividends and profits from investment, apart from user charges or fees against services provided by the government. Keeping this in mind, it has said that non-tax revenue can be augmented by reviewing the outstanding loans that are recoverable from PSUs, local bodies and autonomous bodies under their administrative control and ensuring that interest on loan is received by the government.
The department has said that Delhi government has circulated a dividend policy, which states that a minimum annual dividend of 30% of profit after tax or 5% of the net worth, whichever is higher, is to be paid by a PSU. The finance department has directed the administrative department to take stock of the financial results of the PSUs and enforce the discipline laid down in the dividend policy.
The department has also said that the user charges and fees for various services being provided shall be reviewed by examining the trend of non-tax collection and identifying the factors responsible for the lack of its growth.
All the departments have been requested that an action plan for augmentation of non-tax revenue in respect to their department be sent to the finance department by November 25 as per a format provided.