Delhi seeks ₹10,000cr loan from Centre, finance secretary raises objections
The Delhi government has sought a ₹10,000 crore loan from the National Small Savings Fund (NSSF) to fulfill its fiscal requirements for 2024-25. The decision was reportedly made despite opposition from Delhi's own finance department, which had expected lesser spending in anticipation of the Model Code of Conduct (MCC), which goes into effect with poll announcements. Chief Minister Atishi approved the borrowing plan and directed the finance department to formally request funding from the Ministry of Finance.
Finance Secretary warns of long-term fiscal burden
This move contradicts the suggestion of Principal Secretary (Finance) Ashish Chandra Verma, who advised against taking the NSSF loan to limit liabilities. Verma cautioned that continuing with the NSSF loan could result in a total repayment burden of ₹172,677.47 crore by 2038-39. Only four states have tapped into the NSSF. Delhi, Arunachal Pradesh, Kerala, and Madhya Pradesh. Most states prefer not to borrow from the NSSF since it is more expensive than market borrowings.
Union government's stance on NSSF loan scheme
The Union government had told Delhi in July that the NSSF loan scheme won't be renewed annually. If Delhi sticks with the NSSF loan, it would be left with a loan balance of ₹45,000 crore by 2039 and an additional interest liability of ₹57,661.68 crore. Opting out of the scheme would clear all loan liabilities by 2039 but require interest payments of ₹11,681.68 crore by 2038-39.
AAP ramps up election campaign
Atishi's decision comes as the Aam Aadmi Party (AAP) ramps up its election campaign. During a recent campaign called "revdi pe charcha," National Convener Arvind Kejriwal detailed the Delhi government's six major initiatives: free power, water, education, healthcare, subsidized bus fare for women, and senior pilgrimage. He further stated that a seventh plan, which promises ₹1,000 per month to every Delhi woman, is due to commence soon.
