As the CAG report presented in the Delhi Assembly has flagged huge fiscal deficit and subsidies that have impacted finances during previous AAP regime, the House is set to witness heated debates over the matter. It was presented by Chief Minister Rekha Gupta which has reportedly showed that Delhi spent beyond its means under Aam Aadmi Party (AAP) government.
According to a Comptroller and Auditor General (CAG) report tabled on Monday in the Assembly by Chief Minister Rekha Gupta as the Monsoon session commenced, the Capital went from a fiscal surplus of Rs 4,566 crore in 2022-23 to a fiscal deficit of Rs 3,934 crore in 2023-24, as per the report titled ‘State Finances for the Year 2023-24’.
A fiscal deficit happens when the government spends more money than it earns. Even as fiscal deficits are common across the world, the city went from a surplus to a deficit, the data shows. “The continuous mismatch between receipts and expenditure indicated a rising fiscal stress,” the report underlined.Power subsidies constituted the lion’s share, costing close to Rs. 3,249 crore to the government exchequer, constituting 70.39% of the total subsidies, according to the data shared.
Under the previous AAP government, consumers who used less than 200 units in a month did not have to pay for electricity consumption. Those who used up to 400 units got a subsidy of 50%, of up to Rs 800, in their electricity bills.Meanwhile, the CAG report also pointed out that the expenditure on free travel for women in public buses went up from Rs 115 crore in 2019-20 to Rs 482 crore in 2023-24. The subsidy on water saw an expenditure of Rs 463 crore in 2023-24.
Even as the BJP leaders had earlier termed these subsidies as freebies or ‘revdis’, all the schemes continued to run after the party came to power.As per the CAG report, between 2019-20 and 2023-24, the capital expenditure fell short of the capital budget. The capital expenditure — broadly defined as expenditure incurred by the government to create long-term assets like roads or constructing new buildings — also decreased by 15% in 2023-24 as compared to the previous year.
The decrease was sharp under important heads such as Medical and Public Health (49.87%), Education, Sports, Art & Culture (42.19%), Public Works (39.70%) and Urban Development (36.36%).Revenue expenditure made up a significant portion of the money spent by the government, constituting up to 83%. Revenue expenditure, which refers to the government’s spending on its regular operations like salaries, subsidies, interest payments, and maintenance of services, is necessary for daily expenditure but doesn’t create new assets or infrastructure.
The report points out that the revenue surplus of the city also saw a dramatic fall — from Rs 14,457 crore in 2022-23 to Rs 6,462 the next year.
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