Perhaps this is the first time in history that budget proposals of the Delhi government have been returned by the Government of India, with suggestions for amendments. The state government is trying to present it as a violation of its constitutional rights. But along with this, the budget proposals of the Delhi government are coming under the scanner. It is noteworthy that Delhi’s Lieutenant Governor (LG) Vinay Kumar Saxena has questioned the proposed budget by saying that out of the capital expenditure of Rs 78,800 crore allocated in last year's budget proposals, if loan repayment of Rs 5,587 crore is kept aside, Rs 16,230 crore capital expenditure has been made, which is merely 20 percent of the budget.
The Central government’s argument is that apart from being the national capital, Delhi is also a metropolis, where civic amenities are fast deteriorating and infrastructure needs to be fixed. But along with that, another thing which has been underlined by the Central government is that in the proposed budget, Rs 4,789 crore has been allocated for free electricity, water and travel for women, which is non-revenue generating. Apart from this, a huge amount has been allocated for the operational expenses of the Delhi Jal Board (DJB). For all these reasons, a loan of Rs 10,000 crore has been proposed from the National Social Security Fund (NSSF) to make up for this deficit, which has to be repaid in the coming years. That means its payment burden will also fall on the exchequer. The LG has written that this type of loan should be used only for infrastructure building etc. and not for uneconomic subsidy. The LG has also objected to the fact that while Rs 272 crore has been spent on advertisements as per the revised estimates of 2022-23, the allocation of Rs 557.24 crore under this head proposed for 2023-24 is incomprehensible and unjustifiable.
It is notable that freebies being given by Kejriwal Government have long been a subject of controversies in the past.
ALSO READ: Delhi Budget approved by MHA, say LG office sources
After Independence, the emphasis has generally been on development, poverty alleviation, better social services, drinking water, road, rail, etc. But now, some political parties have started making promises to provide electricity, water, transport, television sets and even mangalsutra, all for free, despite the poor economic conditions of the states.
The result of such freebies is that states are coming under huge debt and the quality of public services has come under severe stress. Significantly, Delhi is a prosperous region of the country with its per capita income being the second highest in the country after Goa. Due to this, the revenue of Delhi is also very high.
Many migrants, who have moved from other states in search of employment, also live in Delhi. Their economic condition is also not so good. Most of the migrant labourers are daily wage earners, or engaged in micro businesses. A large number of them live in horrible conditions, where even basic facilities are lacking.
ALSO READ: After MHA nod to Delhi Budget, Kejriwal says he wants to work with 'elder brother' PM Modi
In such a situation, there is usually no question of their families joining them. The number of such migrant labourers in Delhi is not less than 50 lakh. The labourers who bring their families with them, too, are living in very pathetic conditions in Delhi. Schools, colleges and other educational institutions are needed for them and their families.
There is also a need for a better sewerage system, drinking water and good health facilities. Roads, flyovers, etc., are also needed for their movements. But all these works require huge expenditure by the government. It is seen that due to lack of funds, Arvind Kejriwal’s Aam Aadmi Party (AAP) government in Delhi has failed in its duty to provide sufficient infrastructure. This is exactly the point raised by the LG while objecting to the meagre sum being spent for building new infrastructure.
After assuming power in 2015, till date the AAP-led Delhi government has hardly been able to build new schools, colleges, hospitals, flyovers, etc. In such a situation, the plight of the poor can easily be imagined. The roads, water and sewage system are also not being taken care of properly. Lack of finances is the main reason for this. It is not that the revenue of Delhi is deficient, as its per capita revenue is more than double that of the per capita revenue of all states together. The total revenue of Delhi for 2021-22 is estimated at Rs 53,070 crore, which is 3 percent of the revenue of all the states. In 2019-20, it was Rs. 47,136 crore and in 2014-15, it was only Rs. 29,584 crore.
But along with this increasing revenue, the expenditure on free electricity, water, and transport of the Delhi government has also been increasing. The expenditure on free electricity was Rs 1,639 crore in 2015-16, which increased to Rs 2,968 crore in 2021-22. The Power Department has demanded Rs 3,200 crore from the Delhi government for this power subsidy for 2022-23. Thus, it can be understood that the burden on the budget is increasing in the name of making electricity free by the Delhi government and it has almost doubled between 2015-16 and 2022-23. By huge spending on free electricity, water and transport, there is always a shortage of funds for essential civic amenities.
As a result of Delhi Government’s adventure towards reducing water bills to zero, both the deficit and debt of the DJB are mounting. In the first three years of the Kejriwal government, the losses of DJB tripled from Rs 220.19 crore in 2015-16 to Rs 663 crore in 2018-19. According to a CAG report, Rs 26,620 crore was lent to the DJB in 1998-99, out of which only Rs 351 crore was returned and till March 31, 2018, Rs 26,269 crore was outstanding.
Meanwhile, the Delhi government has given huge loans to DJB in the last five years. The deteriorating conditions of DJB can be gauged from the slow pace of its development works and poor water system. It is believed that the financial conditions of the DJB have become extremely bad due to the Delhi government and its free water policy.
Slow pace in water connection in unregulated colonies and poor conditions of sewage system is primarily because of DJB’s poor financial health. The opposition parties have also been making allegations of alleged corruption in the government agency.
Apart from this, free travel for women in Delhi Transport Corporation (DTC) buses is yet another freebie scheme run by the Delhi government. Thousands of crores of rupees are lost by the government through freebies. It is natural that due to the limited resources, this freebie policy puts pressure on the government finances and many essential expenditures are sacrificed.
At present, the AAP, which is in power, promised in its 2015 election manifesto that it would open 20 new colleges in Delhi, providing free Wi-Fi, building 20,000 public toilets, constituting women security force, installation of three lakh CCTV cameras, expansion of health facilities, among others.
There were 69 such promises, including creation of eight lakh jobs, skill training of one lakh youth every year by Delhi Skill Mission, which either remained mere promises or in which progress was very slow. It may be noted that prior to AAP government, 15 years between 1999-2000 and 2014-15, growth in capital expenditure was 19.6 percent per annum (increase from Rs 510.5 crore to Rs 7,430 crore), which declined to hardly 9.2 percent in the first five years of the AAP government (increase from Rs 7,430 crore to hardly Rs 11,549 crore). It can be easily understood that the main reason behind the stalling of Delhi’s development was lack of resources, as more and more resources are being diverted towards freebies.
If it is said that these freebie schemes are targeted at the poor, then it will not be right. In 2021-22, in Delhi, where per capita income at current prices was Rs 6,52,649 per year by the end of this fiscal year, out of 54.5 lakh electricity consumers, 43.2 lakh people are being provided electricity either free of cost or at half price. A big chunk of those, who can easily pay for electricity, are also being given electricity for free. The facilities are being badly affected and the debt on the government is increasing, so it cannot be justified.
Not only this, 20,000 litres of water per month is also being provided free of cost to 5.3 lakh households.
It is high time that Delhi’s budget be set right to pave way for the development of Delhi and with no dearth of civic amenities, good infrastructure as per the needs of modern times, freeing the politics of Delhi from unthoughtful freebies. The central government should put its foot down and not let the Kejriwal government play with the future of Delhi for petty political gains.
Discover the latest Business News, Sensex, and Nifty updates. Obtain Personal Finance insights, tax queries, and expert opinions on Moneycontrol or download the Moneycontrol App to stay updated!
