Delhi’s local bodies and other institutions received Rs 16,449 crore in financial assistance from the Delhi government in 2024-25, but only 6.75% of the amount was allocated for capital asset creation, according to a Comptroller and Auditor General (CAG) report on Delhi’s finances.
The CAG, in its report on the State Finances of the Government of National Capital Territory of Delhi (GNCTD) for 2024-25, flagged that a relatively small share of financial assistance provided to local bodies and other institutions over the past decade was earmarked for creating capital assets, with a much larger portion being used for routine expenditure, PTI reported.
The CAG report was tabled by Delhi Chief Minister Rekha Gupta on Monday (July 10). According to PTI, grants-in-aid (GIA) for capital asset creation accounted for only 6% to 27% of the total financial assistance extended to local bodies and other institutions between 2015-16 and 2024-25. This means that between 73% and 94% of the assistance during the period was not earmarked for capital asset creation.
Capital asset grants nearly halve in 2024-25
The trend was particularly pronounced in 2024-25, when the overall grant-in-aid for capital asset creation across local bodies and other institutions fell sharply. It is reported that capital-asset grants declined to Rs 1,110 crore in 2024-25, from Rs 2,192 crore in 2023-24. That represents a decline of Rs 1,082 crore, or nearly 50%, in a single year. Against total financial assistance of Rs 16,449 crore, the capital-asset component amounted to just 6.75%.
The CAG noted that this was among the lowest such shares recorded during the 10-year period reviewed, PTI reported.
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Delhi government’s total assistance also falls
The overall financial assistance extended by the GNCTD to local bodies and other institutions declined during 2024-25. The Delhi government provided Rs 16,449 crore during the year, down by Rs 598.63 crore, or 3.5%, from Rs 17,047 crore in 2023-24.
The PTI report further stated that the decline was mainly due to a fall in capital grants provided to municipal corporations and municipalities. Capital grants to these bodies declined by Rs 150 crore, or 23.11%, from Rs 649 crore in 2023-24 to Rs 499 crore in 2024-25.
Municipal bodies remain biggest recipients
Municipal corporations and municipalities were the largest recipients of financial assistance among the local bodies and other institutions covered in the report. They received Rs 9,282 crore in 2024-25, compared with Rs 8,596 crore a year earlier.
Assistance accounts for nearly one-third of revenue expenditure
The CAG also compared financial assistance to local bodies and other institutions with the Delhi government’s revenue expenditure. The financial assistance as a percentage of GNCTD’s revenue expenditure remained between 27% and 34% during the 10-year period from 2015-16 to 2024-25. The ratio stood at 32.91% in 2024-25.
Thus, financial assistance to local bodies and other institutions represented nearly one-third of the Delhi government’s revenue expenditure during the year. At the same time, only 6.75% of the total financial assistance was earmarked for the creation of capital assets.
What the decade-long data shows
PTI reported that the CAG’s assessment highlighted a persistent gap between the overall amount of financial assistance provided to local bodies and the portion specifically directed towards capital asset creation. Between 2015-16 and 2024-25, grants-in-aid for capital asset creation accounted for between 6% and 27% of total financial assistance.
In 2024-25, the government provided Rs 16,449 crore in total financial assistance, but only Rs 1,110 crore went towards creating capital assets. At the same time, the amount of capital grants specifically provided to municipal corporations and municipalities fell from Rs 649 crore to Rs 499 crore.
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Why the capital-asset share matters
Capital spending is generally associated with the creation of assets that provide services over an extended period, while routine or revenue expenditure covers the ongoing costs of running government institutions and delivering services.
In 2024-25, the government provided more than Rs 16,000 crore to local bodies and other institutions, but only Rs 1,110 crore was earmarked for capital asset creation. The difference is particularly significant given that financial assistance to these institutions accounted for 32.91% of GNCTD’s revenue expenditure during the year.
(With inputs from PTI)
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