Aam Aadmi Party-led Delhi govt's surplus budget: Need for a closer look

Delhi, being a Union Territory, does not have the same ability as other states to raise debt. Delhi's debt comprises only loans from the central government

money, budget, rupee — On April 7, the AAP claimed that while the Bharatiya Janata Party-governed states were in huge debt, Delhi was the only “state” with a surplus Budget.

2 min read Last Updated : Apr 17 2022 | 10:20 PM IST

The Aam Aadmi Party-led Delhi government presented a Rs 75,800-crore “Rozgaar Budget” for 2022-23 on March 26, 2022. Less than two weeks later, on April 7, the AAP claimed that while the Bharatiya Janata Party-governed states were in huge debt, Delhi was the only “state” with a surplus Budget.

“If you want to learn governance, learn it from Kejriwal government. By emptying people’s pockets, the BJP makes states indebted,” tweeted the AAP in Hindi. It listed debt burden of seven BJP-led states — Uttar Pradesh (UP), Karnataka, Madhya Pradesh, Gujarat, Haryana, Uttarakhand, and Himachal Pradesh — and compared it to Delhi’s revenue surplus.

There are a few factors that prove this claim misleading:

Debt-revenue surplus comparison unfair: The AAP compares total liabilities of BJP-led state governments with Delhi’s Budget surplus revenue for 2022-23, which is not a like-to-like comparison.

Delhi, too, in debt: While the AAP enlisted other states' debt, what it did not mention was the debt the Delhi government is burdened with. Delhi’s outstanding debt was estimated to be Rs 40,697 crore at the end of 2020-21 (5.18 per cent of Gross State Domestic Product), according to 2022 Delhi Economic Survey.

Delhi can’t borrow from market: Delhi, being a Union Territory, does not have the same ability as other states to raise debt. Delhi’s debt comprises only loans from the central government. This means that Delhi’s debt with other states’ can't be practically compared.

Furthermore, the debt of a state is dependent on many factors, the most important being its GDP. Comparing states’ debt without considering their population, size or size of their economy is incorrect.

Of the BJP-led states listed in the AAP’s tweet, three have shown a revenue surplus in their recent Budget — UP (Rs 23,210 crore), Gujarat (Rs 1,006 crore) and Uttarakhand (Rs 115 crore). The numbers for Uttarakhand and UP are from 2021 since both states had elections in 2022.