Giving a red flag to the Delhi government’s Chief Minister Mahila Samman Rashi Yojana (MMMSY), the finance department pointed out that high recurrent expenditure on such schemes would be “unreasonable and risky”, especially when the state has to take high-cost loans. The Indian Express has learned
The government’s announcement that women would get a salary of Rs 1,000 a month — which AAP chief and former chief minister Arvind Kejriwal called his government’s seventh ‘revdy’ — was first announced in the 2024-25 budget in March. At that time, Finance Minister Atishi had said that the first installment under the scheme would be disbursed by September-October.
However, Kejriwal’s arrest over the excise policy issue delayed its implementation.
In a note on the impact of the proposed scheme, finance secretary AC Verma to Atishi, who is now the CM, estimated its fiscal liability to be Rs 4,560 crore in 2025-26.
“…Unlike states that can borrow from the market within their Fiscal Responsibility and Budget Management Act norms, the Delhi government has no borrowing authority except from the National Small Savings Fund (NSSF) and its fiscal expansion must be driven solely by its own growth. Tax and non-tax revenue… The quantum of loan availability from NSSF is limited and depends on the center issued in a particular year. Use of expensive capital receipts like NSSF to meet long-standing revenue expenditure commitments would be unwarranted and risky and incur huge interest liabilities… Delhi government needs to maintain strict fiscal discipline and match its revenue expenditure with its revenue receipts. States of note.
Sources said that before studying the proposal of the Department of Women and Child Development, the Department of Finance conducted a preliminary analysis of the current financial situation of the government and the impact of the implementation of the plan on the 2025-26 budget. This report was submitted to Atishi on December 4. Pushing for implementation, however, Atishi on Thursday directed the finance department not to “rush” any decision, the finance and planning departments to consider the proposal and comment for his approval immediately. .
“In any financial year, the Government may continue or discontinue existing schemes, modify existing schemes or start new schemes. Therefore, it would not be appropriate to take a decision on BE 2025-26 at this time…it will be the prerogative of the Government at that time…as far as 2,000 crore has been made as far as FY 2024-25 is concerned. The revised estimates for this year’s budget and MMMSY are on track; therefore, the existing provisions are likely to be met,” he said She said, it is known.
She said that although the department has three months to implement this plan, it may be implemented much faster or later than expected at the time of the plan’s conception. There are still four months left for the end of the current (financial) year, so the plan can be implemented in the current financial year even at the estimated pace. Therefore, it is too early for the finance department to decide whether MMMSY will be implemented this year,” she said.
Meanwhile, the Finance Department also highlighted that this year the departments have introduced two schemes that have “huge financial obligations”. The Delhi Jal Board’s plan to meet the revenue shortfall, the note said, has been approved and will cost Rs 2,500 crore.
“The additional liability of about Rs 4,500 crore in MMMSY will create a new revenue expenditure liability of about Rs 7,000 crore in FY 2025-26 – an incremental liability on the revenue account of about 12%,” it said.
In another note on the projection of receipts and expenditure for the next financial year, written on December 3, Verma said the government will run into a budget deficit of over Rs 8,159 crore including deficits in both revenue and capital accounts. of the proposed scheme.
Officials also told Atishi that Delhi’s subsidy bill was already Rs 10,995 crore, “a very significant part” of its budget. “A sharper targeting and rethinking of user charges is needed to minimize the impact of subsidies on Delhi’s budget,” Verma wrote.
The finance department has recommended not to implement the plan this year, saying that the financial stress is increasing. “…implementation of the scheme is likely to start after 3 months, i.e., next year…Accordingly, it would be wise to wait for the actual flow of resources and consider the proposal at the stage of RE 2024-25,” Verma wrote.
The department has said that it will study the impact of the plan on the next financial year’s budget and give an opinion on whether it should be brought or not.
Delhi government sources said, “There is already a provision of Rs 2,000 crore for the scheme in this year’s budget. With only four months remaining in the current financial year, it is likely that only Rs 1,500 crore will be utilised. Also, the revenue collection in the current financial year is slightly higher than projected.” Therefore, the revised estimate passed in the Legislative Assembly on Wednesday is Rs 1,700 crore more than the budget estimate passed in March 2024. There is no question of a revenue deficit.