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Delhi government raises tax to bridge funds shortfall for the Commonwealth Games
March 25, 2010

Delhi government raises tax to bridge funds shortfall for the

Commonwealth Games


25 March 2010

Don’t penalise citizens

Delhi chief minister Sheila Dikshit has blamed the Commonwealth Games for the higher taxes proposed in the recent state budget. This can be a test case for other state governments as well. What happens when cities plan high-impact events that will upgrade their infrastructure, but discover at the last moment that they haven't been quite successful? Are they justified in calling on citizens to cough up more money? Delhi's example suggests that they aren't.

We need better urban infrastructure, for sure. That's the right of citizens and providing it is the job of the government. The logic behind taxation is that the state will collect taxes from citizens and build and run public utilities. The city's bid for the Commonwealth Games was seen as an opportunity to expand urban facilities. Financial outlays were made accordingly and funds provided by various agencies, including the Union government. These funds, let's not forget, were provided by taxpayers.

Now, the state government has overshot its budget for the games. It needs to raise more money, and fast. How did this mess-up happen? This isn't a case of bad budgeting. There is a funds shortage because of the inefficiency of the government. Deadlines were set for the completion of works, which included building new stadiums, roads, hotels etc while refurbishing and revamping existing
ones. But state agencies failed to meet them. As projects lagged, inflationary pressures kicked in and costs soared. Surely, citizens aren't to be blamed for the delays. Nor must they be penalised with more taxes. What if cities expected to host the upcoming cricket World Cup insist that citizens pay more taxes to facilitate the show? Dikshit and her finance minister have got their economics mixed up. The Delhi government has set a bad precedent.

People must pitch in Reema Maity

The Delhi government says: read my lips, a few more taxes. And it justifies its budget by saying the revenue will go into building infrastructure for the Commonwealth Games (CWG). Tomorrow other state CMs may follow Sheila Dikshit's lead, calling on taxpayers to help develop cities hosting
prestigious events. What's wrong with that? It's argued that governments should stick to outlays for sports dos. But that’s to make no allowances for the fact human institutions aren't perfect. Households and businesses often don't live and trade within their means. Why should it be any different for governments?

In an ideal world, the authorities would never exceed spending estimates. But, in reality, the best-laid plans can be marred by unforeseen glitches, such as a slowdown impacting tax collections or building activity. As for poor planning and project delays, let's not be naive. In India, that's par for the course. If ports and airports modernisation or highway building can take decades, not just years, why single out CWG's run-up? Staging sporting dos is a challenge not only in the developing world. Other nations have learnt this the hard way, like Greece with the Athens Olympics or the US with the Atlanta edition.

The aam aadmi is the ultimate beneficiary of the work his political representatives do, such as creating good civic amenities. Don't Delhiites still enjoy the fruits of the development and beautification drive that took place before the Asiad? The same applies to CWG: we'll access better roads, flyovers, transport, parks, stadiums, hotels and upgraded facilities like road signs and streetlights. Surely we're all stakeholders here. We often talk about desired community participation in development. Why make a fuss when asked to put our money where our mouth is?