NEW DELHI: Delhi govt, for the first time, will borrow from open market, with the budget 2026-27 pegging the amount at Rs 16,700 crore – 16% of its Rs 1.03 lakh crore budget.Unlike other states, Delhi did not have an independent public account and could not borrow from the market, instead relying on high-interest National Small Savings Fund (NSSF) loans.
Delhi did not borrow from NSSF in 2023-24, but moved a request to borrow Rs 10,000 crore from it in 2024-25. This request was opposed by its own finance department, which cited the impending model code of conduct imposition before the polls and high interest rates, and recommended that Delhi should quit borrowing from the fund.
The next year, BJP, in its first budget, proposed to borrow Rs 15,000 crore from NSSF. A decision against this, however, was finally taken, budget documents show.In Jan this year, after an MoU with the Reserve Bank of India was signed, Delhi finally got the go-ahead to borrow from the market.Now, with the govt proposing to borrow Rs 16,700 crore from the market, grants and loans from the Centre have also dipped in the budget presented on Tuesday.The indications of a dip were also seen in the revised estimates. While last year’s budget estimated that grants-in-aid from the Centre would come in at about Rs 12,095 crore, this dropped to Rs 5,295 crore in the revised estimates. This year, grants-in-aid from the Centre have gone down to Rs 7,092 crore. For example, last year’s budget estimates had provisioned for Rs 1,000 crore from Central Road and Infrastructure Funds, but this amount was lowered to Rs 212.4 crore in revised estimates. This time, it stands at Rs 591 crore.With Delhi exiting borrowing from NSSF, loans and advances from the Centre have decreased overall, but the Rekha Gupta govt has proposed to borrow Rs 2,500 crore under the Special Assistance to the States for Capital Investment (SASCI) scheme.A senior Delhi govt official said Delhi did not take loans from NSSF because it was keen on a shift towards cheaper market borrowings to reduce fiscal burden.“Delhi was seeking approvals from the Centre so that it could borrow money from the open market. We are now shifting towards open-market borrowings, which usually have 6.5% to 7.5% interest rates as compared to 8% under NSSF,” he said.He also said that Delhi’s move to seek loans under the SASCI scheme, which is designed to accelerate capital expenditure and infrastructure development, would be beneficial as it offers easy project-based loans with an extended repayment schedule of 50 years.Talking about the reduction in grants-in-aid from the Centre, the official said Delhi has historically got lower amounts because its resource position has been good and now because the govt is spending more on capital expenditure we are expecting higher amount as compared to the revised estimates.
