Budget Analysis

Delhi Budget 20122012-13

Chief Minister Sheila Dikshit presented the General Budget 2012-13 to the Assembly on May 28, 2012. In
her address, she commented on the fiscal performance of Delhi in 2011-12 and laid out her budget
proposals for 2012-13.
This document presents a brief analysis of the Budget. It contains the following:

Budget highlights
Economic situation
Key financial indicators
Revenue analysis
Expenditure analysis (budgeted expenditure by sector)

Explanations to technical terms used in the Budget are provided as boxed sections in relevant parts of the
document.

Budget Highlights
- The Delhi government proposes to spend a total of Rs 33,436 crore in 2012-13, a 24 percent
increase from 2011-12.
- State tax receipts are projected to grow by 29 percent in 2012-13. This would take tax receipts to Rs
26,150 crore in 2012-13 from Rs 20,246 crore in 2011-12.
-

The estimated fiscal deficit for 2011-12 was 1.0 percent of state GDP. The debt-state GDP ratio
was 9.4 percent in 2011-12, lowest among all states.

- The Budget also proposes launching new government schemes like the Dilli Annashree Scheme, a
food subsidy program targeting the poor.

Economic Situation
- In 2011-12, Delhis GDP was Rs 3,13,934 crore at current prices.
- In real terms, Delhis GDP expanded by 11.3 percent in 2011-12 over the previous year, while the
Indias GDP grew by 6.5 percent in the same period.
- Delhis per capita income in 2011-12 was Rs 1.8 lakh, compared to the national figure of Rs 60,972
- Inflation in Delhi, as measured by the consumer price index for industrial workers, was 7.83 percent
in 2011-12. This was lower than the national rate (8.3 percent) and the rates in other metropolitan
cities, for example 10.1 percent in Mumbai and 8.0 percent in Chennai.

Key Financial Indicators

Budget data is usually presented in tabular form with four key columns: Budget Estimates for the
current year, Budget Estimates and Revised Estimates for the previous year, and Actuals for the year
before that. Thus, each table presents information for the current year and the previous two years.
However for Delhi, the only data available from 2011-12 are the Budget Estimates.
Revenue v/s Capital account
One way to analyze the budget is to look at the revenue and capital account. Table 1 presents this
information. (Please read Box I & II for an explanation of the technical terms used in the table).
Analyst:
Vishnu Padmanabhan (vishnu@prsindia.org)
Coordinator: Anil Nair (anil@prsindia.org, 9871916608)

June 4, 2012

Budget Analysis: Delhi 2012-13

PRS Legislative Research

Box I: How are receipts and expenditure classified?

In the table below, receipts have been classified as revenue and capital receipts. Receipts from sources such as taxation,
dividends from companies owned by the government and user charges on public services are classified as revenue receipts.
Receipts from sources such as borrowing and disinvestment of public sector companies are classified as capital receipts.
Capital receipts reduce assets or increase liabilities.
Expenditure has been categorized as revenue and capital expenditure. Capital expenditure is used to create assets or to reduce
liabilities e.g. building a road, repaying a loan. Revenue expenditure is used on items such as salaries and administrative
expenses.
Box II: What is revenue deficit/ surplus?
A revenue deficit is incurred when the governments revenue expenditure exceeds its revenue receipts. This implies that the
government is dis-saving. It means that the government will have to borrow not only to finance its investment but also its
consumption. This will lead to an increase in debt and interest liabilities, and could force the government, eventually, to cut
expenditure.
In case receipts exceed expenditure, the government generates a revenue surplus.

Table 1: Analysis of revenue and capital account (Rs Crore)

Budget Estimates
(2011-12)

Budget Estimates
(2012-13)

% Change over last

year

(A)

(B)

(B-A)/(A)

24,700

29,532

20%

22,860

28,804

26%

1,840

728

-60%

27,067

33,436

24%

18,894

22,698

20%

8,173

10,738

31%

3,966

6,106

54%

Total Receipts (a +b)

Total Revenue Receipts (a)
Total Capital Receipts (b)
Total Expenditure (c + d)
Total Revenue Expenditure (c)
Total Capital Expenditure (d)
Revenue Surplus (Total Rev.
Receipts Total Rev. Exp.)

Observations:
- In the 2011-12, the government had estimated a revenue surplus of Rs 3,966 crore. This surplus is
estimated to increase 54 percent to Rs 6,106 crore in 2012-13.
- Delhi government borrowing is relatively low. In 2011-12, capital receipts accounted for 7.5
percent of total receipts. Capital receipts are expected to decrease by 60 percent in 2012-13 because
of reduced borrowing.
Break-up of receipts and expenditure
Table 2 gives a break-up of receipts by source. It also splits expenditure into Plan and Non-plan.
Box III: How else is expenditure classified?
Government expenditure is also classified as Plan and Non-plan.
Plan expenditure covers expenditure on schemes and projects covered by the five-year Plans. Non-plan expenditure is
expenditure not covered by the Plans and includes items such as interest payments on government debt, expenditure on
police, and even maintenance of existing government establishments such as schools and hospitals.
Box IV: What is fiscal deficit?
Fiscal Deficit = (Total receipts excluding borrowing) - Total expenditure
The excess of total government expenditure over total receipts is called the fiscal deficit. It is an indication of the total
borrowings needed by the government. Fiscal deficit may occur either due to a revenue deficit and/ or due to some capital
expenditure undertaken by the government.

Budget Analysis: Delhi 2012-13

PRS Legislative Research

Table 2: Budget at a glance (Rs Crore)

Budget Estimates
(2011-12)

Budget Estimates % Change over last

(2012-13)
year

(A)

(B)

(B-A)/(A)

Total Receipts (a + b)

24,700

29,532

20%

Total Revenue Receipts (a)

22,860

28,804

26%

20,246

26,150

29%

448

726

62%

Receipts

State Tax Revenue

Non Tax Revenue
Share of Central Taxes

325

325

0%

1841

1,604

14%

1,840

728

-60%

27,067

33,436

24%

Total non-plan expenditure (c)

13,307

18,268

37%

Total plan expenditure (d)

13,600

15,000

10%

160

168

5%

3,177

2,604

15%

1.01

0.75

Grants-in-aid
Total Capital Receipts (b)
Expenditure
Total Expenditure (c +d + e)

Centrally Sponsored Schemes (e)

Fiscal Deficit
Fiscal Deficit (% of State GDP)

Observations:
- In 2012-13, state tax revenues are expected to account for 89 percent (Rs 26,150 crore) of total
receipts. This is an increase from 2011-12 where state tax revenues contributed an estimated 82
percent of total receipts.
- Total expenditure is projected to increase by 24 percent over the 2011-12 estimates. The growth is
expected to be driven by a 37 percent increase in non-plan expenditure. This is mainly due to nonplan loans to three municipal corporations (North, South and East Delhi Municipal corporations)
and additional provisions to local bodies.
- Non-plan expenditure will contribute 54 percent (Rs 18,268 crore) to total expenditure while plan
expenditure will contribute 44 percent (Rs 15,000 crore). Expenditures on centrally sponsored
schemes will account for the rest.

- The fiscal deficit for 2011-12 was estimated to be Rs 3,177 crore, which was 1 percent of state
GDP. The deficit is expected to shrink to Rs 2,604 crore in 2012-13. At current growth rates, this
would be 0.8 percent of state GDP.

Revenue Analysis
Of the various sources of revenue, tax revenue or revenue raised by levying taxes (both central and
state) is an important source. Table 4 below presents a break-up of this figure.
Table 4: Tax revenue (arranged in descending order; in Rs Crore)

Total Tax Collection

State Tax Revenue
VAT
Stamps and Registration
Taxes on Motor Vehicles
State Excise
Other Taxes and Duties
Share in Central Taxes

Budget Estimates
(2011-12)
(A)
20,596

Budget Estimates
(2012-13)
(B)
26,500

% Change over last

year
(B-A)/(A)
29%

20,246
14,500
2,300
800
2,300
346
325

26,150
17,000
4,300
1,370
3,000
480
325

29%
17%
87%
71%
30%
39%
0%

Budget Analysis: Delhi 2012-13

PRS Legislative Research

Observations:
- In 2012-13, tax revenue is expected to grow by 29 percent over the 2011-12 estimates. The growth
in tax revenue will be driven by increased revenue from stamps and registration fees. Revenue from
stamps and registration fees is projected to increase by 87 percent to Rs 4,300 crore.
- The main source for tax revenue will be Value Added Tax (VAT) which is expected to contribute
64 percent (Rs 17,000 crore) to total tax revenue in 2012-13. This is lower than the 70 percent VAT
contribution in 2011-12.
- Key tax proposals introduced in the budget include a VAT reduction for petrol and an increase in
VAT on tobacco related products to 20 percent (from 12.5 percent).
- The Budget had proposed a levy of VAT of 5 percent on CNG and a 5 percent tax on certain textile
items. However, the Chief Minister dropped both proposals from the Budget on June 5, 2012.

Expenditure Analysis
A more comprehensive sectoral analysis of expenditure can help understand state priorities. Table 5
presents the budgeted expenditure on different areas:
Table 5: Budgeted plan expenditure Major Items (Rs Crore)

Total Plan Expenditure

Transport
Medical & Public Health
Water Supply & Sanitation
Urban Development
General Education
Energy
Social Welfare
Housing

Budget Estimates
(2011-12)
(A)
13,600

Budget Estimates
(2012-13)
(B)
15,000

% Change over last

year
(B-A)/(A)
10.3%

3,348
1,802
1,650
1,466
948
1,576
555
458

3,372
2,124
1,800
1,695
1,625
860
660
539

0.7%
17.9%
9.1%
15.6%
71.4%
-45.4%
18.9%
17.7%

Observations:
- Breaking down the plan expenditure by sector, transport accounts for the biggest proportion with
22.5 percent (Rs 3,372 crore) of the total outlay in 2012-13.
- Allocations to the medical and public health sector and education sector have increased. The
estimated outlay on medical and public health for 2012-13 has increased by 18 percent to Rs 2,124
crore. Spending on general education is expected to increase by 71 percent to Rs 1,625 crore.
- The government plans to launch the Dilli Annashree Sheme. The scheme will provide two lakh
vulnerable households with a food subsidy of Rs 600 per month. This subsidy will be in the form of
a cash transfer to the senior most female member in the household. An outlay of Rs 150 crore is
expected to be spent on this program during 2012-13.
- The Budget also proposes to make Delhi a Kerosene Free city. The government aims to provide a
onetime cash subsidy to about 1.75 lakh households for obtaining an LPG connection and purchase
of a gas stove. An outlay of Rs 40 crore is expected to be spent on this during 2012-13.
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