Delhi mulls revision of user charge for services to augment non-tax revenue

The Delhi government has undertaken an exercise to revise user charges for services provided by its various departments and agencies with the aim to augment non-tax revenue, officials said on Wednesday.

The Finance department wrote to all additional chief secretaries, principal secretaries and secretaries earlier this month, asking them to furnish the details of user charges being collected for different services, they said.

A Finance department circular noted the need to augment non-tax revenue in view of the "stretched state finances" due to the impact of COVID-19 in 2021-22 and the non receipt of GST compensation from the Centre since July 2022.

"In this context, a need has arisen to augment non-tax revenue, which is currently at only 1.69 per cent and 1.35 per cent of total revenue collection of Delhi government during financial year 2020-21 and 2021-22, respectively," said the circular.

The major components of non-tax revenue are interest charged on loans or advances, dividends and profits from investments and user charges (fees) against various services provided by the government.

"According to Rule 47 of general financial rules, GFR, it is required to undertake an exercise to identify the user charges' levied by departments, thereby ensuring that the user charges recover the current cost of providing services with reasonable return on capital investment and are reviewed at least every three years," it said.

User charges are an important component of the non-tax revenue, which need to be reviewed for necessary revisions wherever due or necessary, the circular stated.

The departments have been asked to provide an action plan to augment non-tax revenue and furnish details of user charges being levied by them and when these were last revised, the officials added.