Kejriwal's name was a part of several such designs, including the tricolour and 'thank you', created by students using multi-coloured cloth pieces at the stands of the Chhatrasal Stadium, the venue of the event.
"We enquired about it and came to know that it's a tradition. This has been happening which is not right," Delhi Transport Minister Gopal Rai said.
The government also released pictures showing similar designs -- one showing Najeeb Jung's name and the other Sheila Dikshit's -- created on previous such occasions.
The pattern came up few times during Kejriwal's 40- minute-long speech, where he highlighted his government's "achievements", punctuated with loud cheers from the students.
While state Congress chief Ajay Maken decried it as a "shame", Delhi BJP President Satish Upadhyay condemned the government for "politically misusing" the Independence Day function.
BJP National Secretary RP Singh said, "It is very clear that the Chief Minister is a megalomaniac who can see none other then himself."
Social media, where images in this regard went viral, heaped scorns on AAP saying the government's justification was not befitting as people expected change from Kejriwal.
"Ppl voted for change, the change they expected from Arvind Kejriwal as an 'Aam Aadmi'," Anshi Chhibber tweeted.
"Previous govts did it. Yes, they have been voted out, so is ur target the same?" Krupakar Manukonda wrote.