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How Arvind Kejriwal is trying to get COVID-battered Delhi economy back on track

From allowing hotels and weekly markets to launching a job portal, the Kejriwal government is trying to bring the economy back on track but it will have to keep an eye on the coronavirus situation as another spike can derail its plans.

August 26, 2020 / 04:17 PM IST
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People of Delhi, including traders, will have to work together to strengthen the city’s economy, Chief Minister Arvind Kejriwal has said, pushing for the revival of business activity as the coronavirus situation stablises in the Capital.

The outbreak has dealt a huge blow to the already precarious finances of the state government which subsidies water and electricity for a large section of the population. 

"We currently have a fragile situation at hand, and there is no source of revenue of tax for us. Now there is a need to re-open shops and businesses,” Kejriwal said in an interaction with the office-bearers of weekly-market associations on August 25.

From allowing hotels and weekly markets to open to launching a job portal, the Delhi government is trying to get the economy back on track. It has also resumed work on pending projects and launched a crackdown on tax defaulters.

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Over the last few weeks, Delhi, a coronavirus hotspot, has seen a decline in the number of reported cases. At least 90% of the infected people have recovered. 

On June 23, Delhi reported 3,947 infections, the highest single-day spike so far. In the last week of July and a few days of August, they dropped to three digits and have again begun to inch up. On August 25, 1,544 cases were reported, which is the highest for the month.

Kejriwal, however, said the situation was under control. The same can’t be said about the economic situation. 

On August 19, the government allowed hotels to resume operations after five months. According to the Delhi government, the hospitality industry in the capital contributes 8 percent to the state’s GDP with nearly four lakh people associated with the sector. 

The decision would give a fresh lease of life to 3,000 budget hotels, industry representatives said.

 “We have requested the Delhi government to help us recover losses by waiving off electricity bills, house tax, etc,” Delhi hotel and restaurant owners association chairman Sandeep Khandelwal said. 

Also read: Delhi govt instructs excise dept to issue permits to hotels, restaurants to serve liquor

Weekly markets have been allowed but on a trial basis. These markets, which sell everything from vegetables to clothes, are held across the city and provide employment to around five lakh families, officials said.  

The government has been pushing for unlocking the city, especially the services sector which accounts for nearly 60 percent of all jobs in Delhi. 

While most services have resumed, gyms and yoga centres remain shut. 

Delhi Metro, the lifeline of the Capital and its suburbs, may be allowed to restart services when some more restrictions are eased for the so-called 'Unlock 4.0' that kicks in on September 1. 

The union home ministry is expected to issue guidelines for the fourth phase of the staggered rollback of the lockdown in the coming days. 

Along with a push for businesses, the Delhi government has begun taking up non-COVID proposals as well. It recently cleared the decks for the doorstep delivery of rations. In the last week of July, Kejriwal reviewed work on a flyover in the city’s North-East district and the Chandni Chowk redevelopment project. 

On July 27, he launched a job portal, Rozgar Bazar, to put job seekers in touch with employers looking to hire. 

Taxing times

As every rupee counts, the government is worried about tax defaulters. Of the 15,000 taxpayers registered with the government, nearly two-thirds paid either lower tax or no tax between January and March, officials said. 

The government has collected around Rs 3,777 crore in taxes in the January-July period against Rs 5,792 crore in the corresponding period last year, officials said.

The government has sent notices to 5,584 companies for not filing GST returns.

“Several sectors such as ecommerce, insurance, and financial services were not affected by the pandemic. The Delhi government will strictly scrutinise the reasons for not filing of tax returns by these companies from unaffected sectors,” deputy chief minister Manish Sisodia, who also holds the finance portfolio, said in a statement. 

A 12-member expert panel has been set up to suggest ways to revive businesses damaged by the outbreak. 

Along with its economic push, the Delhi government will have to closely monitor the coronavirus situation. If infections spike, restrictions will have to be brought back and that will a devastating blow to Delhi’s fragile economy.

“Confidence is important for economic activities but we need not be complacent. I appeal to people of Delhi to keep wearing masks and follow social distancing norms,” Kejriwal said in an online press conference on August 26. 
Gulam Jeelani
first published: Aug 26, 2020 04:08 pm

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