In run-up to elections, Delhi knocks at Centre’s door for Rs 10,000-cr loan

Besides Delhi, lone 3 different states — Arunachal Pradesh, Kerala and Madhya Pradesh — get from NSSF, which comprises collections nether tiny redeeming schemes, nett of withdrawals. Most states person decided to enactment retired of NSSF since these loans are much costly than marketplace borrowings.

In a September 2 note, Delhi’s Principal Secretary (Finance) Ashish Chandra Verma is learnt to person objected to the option of taking loans from the NSSF this fiscal.

“In presumption of the hugely expanded involvement liability, and the likelihood of reduced expenditure owed to MCC (Model Code of Conduct), it is recommended to judge Scenario I (the enactment to discontinue from the NSSF scheme),” Verma had noted.

In fact, successful the past 1 week, the Aam Aadmi Party has conveyed its intent to proceed with revdis (freebies) arsenic portion of its run for the Assembly elections successful Delhi. Launching a 15-day run ‘revdi pe charcha’, the party’s National Convenor Arvind Kejriwal listed retired Delhi government’s six revdis — escaped electricity, water, education, healthcare, autobus tickets for women and pilgrimage for aged and said, “Apart from these six revdis, the seventh 1 is coming soon.” He past promised to soon commencement depositing Rs 1,000 per period successful each Delhi woman’s slope account.

Responding to queries, a Delhi authorities spokesperson said, “How overmuch indebtedness does the authorities instrumentality successful immoderate peculiar twelvemonth is simply a regular administrative determination keeping respective factors successful mind.” Further, the spokesperson said that the Economic Survey of Delhi 2023-24 shows that the full indebtedness of Delhi authorities arsenic a percent of GDP has reduced from 6.4 per cent to 3.9 per cent. “This conscionable isn’t the lowest successful Delhi’s past but it is besides the lowest successful India,” the spokesperson said.

Queries sent to Verma and the Union Ministry of Finance did not elicit a response.

Delhi had not borrowed from NSSF successful 2023-24, portion it borrowed Rs 3,721 crore successful 2022-23, overmuch little than Rs 10,000 crore-plus successful each of the erstwhile 3 years. In fact, it had adjacent started pre-paying its older loans, to which the Union Ministry of Finance had objected.

Despite the concerns raised by the state’s concern department, Chief Minister Atishi, who besides holds the concern portfolio, gave a spell up to taking loans from the NSSF strategy connected existing presumption and conditions. “The Finance Department to instantly pass to the Ministry of Finance, Govt. of India, to guarantee merchandise from NSSF Loan Scheme for the existent fiscal year,” Atishi said successful an October 10 note.

In his note, Principal Secretary (Finance) Verma said, “We are already six months into the existent fiscal twelvemonth and it tin beryllium estimated that 2-2.5 months volition beryllium taken up by the MCC for Delhi Legislative Assembly elections. This gives lone 4-4.5 months for strategy expenditure connected relationship of superior works.”

What seemed much problematic for Verma was the request that the NSSF indebtedness would person to beryllium agreed not lone for the existent fiscal twelvemonth but for the aboriginal too. This, helium pointed out, volition enforce a immense involvement burden. According to calculations by the Union Ministry of Finance, continuing with the NSSF indebtedness from the existent fiscal twelvemonth till 2038-39 volition effect successful an further involvement load to the tune of Rs 45,980 crore successful summation to Rs 1.27 lakh crore successful main amount.

The Union Ministry of Finance had successful July conveyed to the Delhi authorities that the enactment of availing indebtedness from the NSSF would beryllium a one-time enactment and not beryllium disposable connected a year-to-year basis. It had sought confirmation from the Delhi authorities whether it plans to proceed with the NSSF indebtedness arsenic per the archetypal presumption and conditions and besides travel the repayment schedule.

It spelt retired 2 scenarios of repayment. Under Scenario I, the Delhi authorities had the enactment to discontinue the NSSF strategy with nary liability connected relationship of NSSF indebtedness aft March 2039. The outstanding magnitude would past beryllium Rs 31,697.47 crore connected relationship of the NSSF indebtedness (the aforesaid arsenic connected April 1, 2024).

Under Scenario II, if the Delhi authorities avails the enactment to proceed with the NSSF loan, Rs 10,000 crore is estimated to beryllium disbursed to Delhi each twelvemonth from 2024-25 to 2038-39. This would effect successful an involvement load of Rs 57,661.68 crore connected the NSSF indebtedness borrowed till March 31, 2039.

The quality successful the involvement magnitude betwixt Scenario I and Scenario II works retired to Rs 45,980 crore. Also, an magnitude of Rs 1,26,697.47 crore would beryllium past payable during 2024-25 to 2038-39 arsenic repayment of NSSF indebtedness arsenic against lone Rs 31,697.47 crore payable for the aforesaid play nether Scenario I with nary further liabilities.