The Delhi model

and why it can’t happen anywhere else in the country

The Aam Aadmi Party (AAP) is an Indian political party is currently the ruling party of the National Capital Territory of Delhi. It came into existence following differences between the activists Arvind Kejriwal and Anna Hazare.

The party made its electoral debut in the 2013 Delhi Legislative Assembly election, where it emerged as the second-largest party, winning 28 of the 70 seats. AAP formed government with support from the Indian National Congress.

In the 2015 Delhi Legislative Assembly election, AAP won 67 of the 70 seats in the assembly. In the 2020 Delhi Legislative Assembly election, the Aam Aadmi Party won 62 out of the 70 seats.

The hits of the Delhi model of governance

When AAP came to power in February 2015 it made a pledge to bring about far-reaching changes in the education and health sectors.

That change is visible in the nearly 1,000 government schools in the city. The classrooms are cleaner with colourful walls and comfortable benches. Many senior classes boast of projectors, smart boards and air-conditioned labs besides indoor and outdoor sports facilities. Some schools have lifts and swimming pools.

The 2018 CBSE Class XII results of the government schools were seen as a feather in the Delhi government’s cap.

Cheap electricity and free water is being provided to Delhi residents. Residents who use less than 20 kilolitres of water a month, get it free while the power tariffs have also come down.

Goods and Services Tax (GST)

Goods and Services Tax (GST) is an indirect tax (or consumption tax) used in India on the supply of goods and services. It is collected from point of consumption and not point of origin like previous taxes.

The tax came into effect from 1 July 2017. The GST replaced existing multiple taxes levied by the central and state governments.

CGST, SGST & IGST

CGST is a tax levied on Intra State supplies of both goods and services by the Central Government.
SGST is a tax levied on Intra State supplies of both goods and services by the State Government.
IGST is a tax levied on all Inter-State supplies of goods and/or services.

Under IGST, tax will be shared between the Central and State Government.

GST is a destination-based tax. Consider goods manufactured in Maharashtra and are sold to the final consumer in Karnataka. Since Goods & Service Tax is levied at the point of consumption, the entire state tax revenue will go to Karnataka and not Maharashtra. The SGST collected will accrue to the State where the consumer of the goods or services sold resides and not to the State where the goods are produced.

The numbers and why

State/UT	Area	Population (2011)	Average monthly GST Revenue (Dec’ 19, Jan’ 20, Feb’ 20)
Delhi	1,483 km2	16,787,941	3833 cr
Uttar Pradesh	243,290 km2	199,812,341	5654 cr
Uttarakhand	53,483 km2	10,086,292	1250 cr
Haryana	44,212 km2	25,351,462	5373 cr
Bihar	94,163 km2	104,099,452	1086 cr
Rajasthan	342,238 km2	68,548,437	2892 cr

A glance at the above table puts things into perspective. The fact that Delhi has a small population and a small area is just one part of the story. The real game, however begins, once you put into perspective the facts that it has no major industry as it is an urban area, and the only state/UT in the entire country which has such a unique factor, which makes it a state/UT which rarely exports anything. This, coupled with the fact that the NCT has a huge amount of consumption, thereby rendering it into a win-win situation, where it has the advantage of a large GST collection and barely any loss of revenue of export to other states.

Another important point to mention here, would be the fact that a major chunk of a state/UT’s expenditure goes into the Police department, which is the law enforcement agency. However, Delhi is exempt from this as the Delhi Police comes under the jurisdiction of the Ministry of Home Affairs, Government of India not the Government of Delhi. Maintaing a police force with such a huge task force, which has to take of regular law and order problems, apart from the residence and movement of various ministers such as the Prime Minister, President and various other important minister is no mean feat. The Parliament House, which contains the Lok Sabha and the Rajya Sabha is also located in New Delhi.

Given below is the allocated budget of the Delhi Police.

The Delhi Police has been allocated ₹8,619 crore in the Union budget(2020-21) whereas it received ₹7892.55 crore in 2019-20. Keep in mind, this fund (an approximate of 700 crores per month) has to be spent by the Union governement and is not borne by the Delhi Government, unlike other states which bear the cost of the police department.

Conclusion

In conclusion, I have to admit that I am a fan of the way education and essentials like electricity and water have also become cheap in Delhi. However, to affix this primarily as a victory of the Kejriwal or the AAP government would be a blunder, as there are various things working in its favour. This model, though succesful, cannot be replicated elsewhere in the country, as it is purely a victory on the basis of the GST model, which allows the Delhi Government to have a huge revenue, thanks to its urban population and despite the lack of industries.

Note: This article is not intended to show any Government in a good or bad light, but it only intends to show a clearer picture to a layman, as to why Delhi, is not necessarily a great model of governance.

References

https://en.wikipedia.org/wiki/Aam_Aadmi_Party
https://www.hindustantimes.com/education/delhi-government-schools-outperform-private-schools-in-academics/story-yDcSrRyaKcg1IKycdZ8jON.html
https://www.indiatoday.in/mail-today/story/aap-government-turns-4-years-arvind-kejriwal-delhi-hits-misses-challenges-1455646-2019-02-14
https://en.wikipedia.org/wiki/Goods_and_Services_Tax_(India)
https://cleartax.in/s/what-is-sgst-cgst-igst
https://en.wikipedia.org/wiki/List_of_states_and_union_territories_of_India_by_area
https://en.wikipedia.org/wiki/List_of_states_and_union_territories_of_India_by_population
https://pib.gov.in/PressReleaseIframePage.aspx?PRID=1598153
https://pib.gov.in/PressReleasePage.aspx?PRID=1601435
https://pib.gov.in/newsite/PrintRelease.aspx?relid=199672
https://www.news18.com/news/business/delhi-police-allotted-rs-8619-cr-nirbhaya-fund-gets-11-23-cr-in-union-budget-2020-2483211.html