Delhi's GDP Share Is Slowly Shrinking

How is India's economy outgrowing Delhi's despite Delhi's growth?

India's per capita GDP grew 8.14% a year over 2015-25 against Delhi's 6.39%. Delhi still starts far ahead, its per capita GSDP was 177.07% above the national figure in 2015-16, but growing slower off that high base means the rest of India's economy has been closing the gap, narrowing Delhi's lead to 135.34% by 2024-25 and shrinking its GDP share from 4% to 3.67%.

Why can't capital spending fix Delhi's slower growth?

Capital expenditure, the lever that builds the infrastructure driving growth, stayed between just 7% and 15% of Delhi's total spending across the whole decade. It actually fell to Rs 3,695 crore in 2024-25 from Rs 6,855 crore the year before, with less spent on roads and bridges, because revenue expenditure, committed costs and subsidies ate 88.38% of the growth in total spending.

What is squeezing out that capital spending?

Subsidies rose Rs 3,222 crore, or 172.48%, over the decade, and power subsidies alone accounted for most of that, up Rs 2,033 crore or 128.83%. This is a structural pattern in Delhi's finances: welfare commitments and subsidies keep expanding as a share of the budget, leaving a shrinking sliver for the roads, transport and infrastructure spending that could lift growth back toward the national rate.

Why did Delhi's capex fall even as its revenue kept rising?

Revenue grew 9.57% on higher GST collections, but 88.38% of Delhi's total expenditure growth over 2015-25 was revenue expenditure, not capex. Subsidies rose 172.48% (power alone up 128.83%), and committed costs absorbed the rest, squeezing capital spending to 7-15% of the budget. Capex actually fell to Rs 3,695 crore in 2024-25 from Rs 6,855 crore the year before, hit by lower road and bridge spending.

Is Delhi's subsidy-driven squeeze unique among Indian states?

No, it mirrors a national pattern: across all states, committed expenditure (salaries, pensions, interest) rose 2.49 times between 2013-14 and 2022-23, while subsidies rose 3.21 times, the fastest of the three. Revenue expenditure nationally already runs 80-87% of total state spending, leaving a similarly narrow band for capital investment everywhere, not just in Delhi.

What is 'committed expenditure' and why can't it be cut?

Committed expenditure covers salaries, pensions and interest payments on debt, obligations governments must pay regardless of revenue conditions. Nationally these totalled Rs 15,63,649 crore in 2022-23, up from Rs 6,26,849 crore in 2013-14. Because these payments are contractual and recurring, any revenue growth gets absorbed by them first, before capital projects like roads ever reach the budget line.

How are BJP and AAP fighting over this CAG report?

BJP tabled the CAG report, its tenth of 14 pending audits on the AAP years, framing years of AAP rule under Kejriwal as fiscal mismanagement, with subsidies up 172.48% squeezing capital spending. AAP has countered by accusing L-G-appointed officers of enabling corruption instead, and previously stalled tabling by protesting over Ambedkar and Bhagat Singh portraits being replaced with Modi's, getting MLAs suspended.

Why were AAP MLAs suspended during a CAG tabling?

When an earlier CAG report on the liquor policy was tabled in February, 15 AAP MLAs including then-Leader of Opposition Atishi were suspended for a day after protesting that portraits of Dr B.R. Ambedkar and Bhagat Singh in the CM's office had been replaced with Modi's. BJP denied this, releasing photos showing the portraits moved to side walls, not removed.

How many CAG reports on AAP's rule are pending in total?

There are over a dozen CAG reports alleging corruption during AAP's rule that went untabled for roughly 10 years under Kejriwal. The BJP government has now tabled 10 of 14 pending reports, including ones on construction workers' welfare and state finances, though the report on the 'sheeshmahal' bungalow refurbishment scam had not been tabled as of February.

What does the CAG process require governments to do next?

Constitutionally, CAG reports go to the Public Accounts Committee, which has both treasury and opposition members, for deliberation, and officials summoned must appear and testify. The government is bound to implement the PAC's findings or face contempt of the House, a check AAP is accused of bypassing by withholding reports for a decade.