Number Theory: A political tale of two Delhi budgets

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When the Aam Admi Party (AAP) captured power in Delhi, it brought welfare or populism to the political centre stage not just in Delhi, but in other parts of the country as well. It was political goodwill built on welfare among the city-state’s underclass that gave the AAP two overwhelming back-to-back victories in the Delhi assembly. The bedrock of the BJP’s challenge to the AAP in the 2025 elections was not a criticism of its welfarism. In fact, the BJP’s top leadership, Prime Minister Narendra Modi included, went on record to say that none of the schemes the AAP brought would be discontinued if the BJP came to power. What the BJP made an issue of was governance. A comparison of numbers from 2024-25 and 2025-26 budgets shows clearly why the BJP’s campaign resonated with the electorate.

Chief minister Rekha Gupta poses with the Delhi Budget document at her office on Tuesday. (ANI Photo)

A political tale of two Delhi budgets

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  The AAP government could not spend what it wanted to despite collecting more in revenues

  The AAP presented a budget with a total spending of ₹76,000 crore on March 4, 2024. Manish Sisodia, who held the finance portfolio after the AAP stormed back to power in 2020, was in jail at the time. Twenty days after the 2024-25 budget, then chief minister Arvind Kejriwal was also arrested in the excise policy case. By the time both of them got bail, half of the fiscal year was already gone. Kejriwal and Sisodia did not join the government after their release. AAP might have had political reasons for keeping its two most important leaders out of government. But it is not clear why it held back on spending -- something that seems to have backfired badly. A comparison of 2024-25 budget estimates (BE) and revised estimates (RE) numbers shows that the Delhi government significantly underperformed on the spending front despite over-performing on the revenue front -- the worst fiscal imbalance a government can achieve. Whether this was a result of the lieutenant governor’s (LG) office stalling AAP’s government functioning or the AAP’s own government functionaries finally dropping the ball on what was a constant tussle in its 10-year term is a question the AAP can only introspect on in hindsight.
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  The new BJP government has kept its promise of not cutting back on AAP’s welfare schemes

  This is the most important part of the 2025-26 Delhi Budget. Not only is total expenditure expected to increase to ₹1 lakh crore compared to ₹69,500 crore for 2024-25 RE and ₹76,000 crore for 2024-25 BE numbers, even the revenue expenditure component of total spending – this is where welfare/populist schemes are accounted for – is expected to increase by more than 30% between 2024-25 RE and 2025-26 BE numbers. A detailed comparison of 2024-25 BE/RE and 2025-26 BE numbers shows that revenue spending is expected to increase for every head under social services -- education, health and family welfare, welfare of Scheduled Caste/Scheduled Tribe and other backward classes, labour and labour welfare, social welfare and nutrition, and other social services. Even the energy sector allocation, which would pay for electricity subsidy payments -- one of the flagship schemes of the AAP government -- has seen an increase in 2025-26 compared to both 2024-25 BE and RE numbers. Prima facie, this leaves little ground to argue that the BJP will roll back AAP’s important schemes significantly.
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  Will AAP’s loss be Delhi’s gain?

  The AAP may have a political case in arguing that the BJP government at the Centre, through its nominee the LG, did not let it run the government properly. To be sure, the BJP got a law passed in the Parliament giving the Union government significant, often overarching, control over the Delhi government to make such interventions legal. Delhi, after all, is not a full-fledged state and, given its strategically importance as the national capital, is not an ordinary place in terms of governance concerns. Now that all states that are a part to the National Capital Region are ruled by the same party (BJP), will politics finally align to bring economic policy in sync for the growth and development of this region? It will take intervention from the Union government to get things moving on this front to address Delhi’s sustainability and livability concerns.