NEW DELHI: The Modi government’s Operation Black Money threatens to hit the Delhi government’s revenue collection. Officials fear that the state might miss its revenue collection target—over Rs 36,000 crore for the current fiscal—once again. The demonetisation has affected sale of expensive liquor, and property transactions in unauthorised colonies.
The Narendra Modi government’s strike on black money threatens to hit Delhi government’s revenue collection hard. A senior official of the Delhi government’s excise department said sale of foreign liquor has come down drastically in the past few days. “Most of the excise revenue comes from the sale of Indian Manufactured Foreign Liquor. Officials from the government outlets have claimed that the sale has come down by at least 50 per cent. This will surely reflect in the revenue collection,” said the official.
The excise department has fixed the revenue target current financial year at Rs 4,500 crore. Of this, the government has collected only about Rs 2,500 crore. “Liquor consumption happens on daily-basis. It is not something that can be postponed. People have also stopped buying liquor in the wedding season due to crunch of high-value currency,” added the official.
Similar is the condition with the revenue department where the money comes from property transactions through stamp duty and property registration. “Delhi has over 1,700 unauthorised colonies and it is a big market for secondary real estate projects. In the secondary market, traditionally the ratio of white and black money is 60:40. Ban on transaction of black money has affected the property registration badly,” said a Delhi government official.
Government has set a target of generating Rs 4,000 crore through stamp duty collection and property registration, and so far it has managed to collect over Rs 2,300 crore. The official said property transactions in secondary market will remain slow for next six months as there is hardly any black money left in the market.
Officials of the Trade and Taxes Department, where the revenue comes in the form of Value Added Tax (VAT), said the department is the biggest contributor in Delhi government’s revenue. Of the Rs 24,000-crore target, the department has been able to collect only Rs 12,000. “Craze of online purchase among people has already affected the VAT collection. Now, ban on Rs 500 and Rs 1,000 notes will affect the sale of luxury items. Whether it is costly watches, mobile phones or other electronic items, people will postpone buying all these owing to lack of money,” said an official.
Similarly, sale of high-end vehicles has also been affected. “Generally, people pay 30-40 per cent in cash while purchasing cars. About 1,500 new cars are registered daily in Delhi.
The target of revenue collection from registration of vehicles was fixed at Rs 1,950 crore, which the government can hardly reach as they have been able to collect only Rs 1,000 crore till now,” said an official.