New Delhi: The Delhi government on Monday told the Supreme Court that due to discontinuation of Goods and Services Tax (GST) compensation, it has not been able to allocate sufficient funds for infrastructure projects like building rapid transit system corridors, severely affecting the national capital’s financial resources.
In an affidavit filed before the apex court, the Delhi government claimed that one of the primary reasons it was facing shortage of funds was the stoppage of GST compensation payment by the Center in June last year. It said this has resulted in a “significant shortfall” in the availability of funds, affecting the overall development of the national capital.
The affidavit of the Aam Aadmi Party (AAP)-led Delhi government was filed in response to an apex court order seeking details of its expenditure on campaigning.
The court was told in the affidavit that the government has also increased its expenditure on essential public services, such as education, health care and other social welfare programmes. It is claimed that this has made it more challenging for the government to allocate financial resources for infrastructure development projects.
On the issue of expenditure on advertisements, the Delhi government’s affidavit clarified that its expenditure on advertisements was the “most appropriate, economical and efficient way of communicating the work of the government”.
On July 3, a bench headed by Justice Sanjay Kishan Kaul had directed the state government to furnish details of money spent on advertisements in the last three financial years.
This was done because the government expressed its inability to pay its share for the Regional Rapid Transit System (RRTS) projects for the Delhi-Alwar and Delhi-Panipat corridors.
Delhi reportedly has to contribute Rs 1,180 crore for the project, approved by the central government in 2019, but only Rs 865 crore has been released so far, that too after court intervention. The amount was reportedly paid from the Environment Compensation Fee (ECC) fund after the apex court allowed the Delhi government to access the fund.
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The Delhi government’s affidavit on the Supreme Court’s question on expenditure on advertisements revealed that it has spent around Rs 1,073 crore on these campaigns in the last three financial years.
Giving details, the affidavit claimed that Rs 296 crore was spent in 2020-21, Rs 579.91 crore in 2021-22 and over Rs 196.93 crore last year.
Taking note of the submission, the apex court on Monday remarked that if the state can allocate Rs 1,100 crore for advertisement, it can certainly finance infrastructure projects as well.
Justices Kaul and Sudhanshu Dhulia, who are hearing the RRTS case, directed the government to pay the dues for the project, around Rs 315 crore, within two months.
Clarifying its stand on expenditure on advertisements, the Delhi government’s affidavit said, “Expenditure on publicity is an essential component of good governance and effective administration. The funds allocated for these purposes are aimed at maximizing the reach and impact of government policies, which will ultimately benefit the public at large.
The affidavit claimed that when compared to the advertisement expenditure of governments in other parts of India, the advertisement expenditure of the Delhi government was not excessive in any manner or in percentage terms.
The Kejriwal government further stated in the affidavit that the GST revenue, which was supposed to boost the state’s revenue, has not been released due to various reasons including the impact of the COVID-19 pandemic.
The affidavit states that Delhi received Rs 10,000 crore as GST compensation during 2022-23, but during the current financial year, it will get only Rs 3,892 crore due to GST compensation dues.
It added that Delhi has appealed to the central government to continue paying compensation for the next five years, till the GST collection achieves an annual growth rate of 14 per cent. Under the GST laws, states were assured a 14 per cent increase in GST revenue every year for the first five years, with any shortfall to be compensated by the Centre. According to the law, due to the expiry of the period of five years, now the compensation has been stopped.
(Editing by Richa Mishra)