As Delhi gears up for the upcoming Assembly elections, the state government has proposed borrowing Rs 10,000 crore from the National Small Savings Fund (NSSF) to cover its expenditure for the fiscal year 2024-25. However, this move has led to tensions between the government and bureaucratic officials, raising concerns about the potential financial implications of the loan.

The proposal, endorsed by Chief Minister Atishi, is designed to address the city's immediate financial requirements. In response, the State Resource Division (SRD) has urged the Department of Economic Affairs to expedite the disbursement of funds, citing prior approval from the Chief Minister.

Despite receiving political backing, Principal Secretary (Finance) Ashish Chandra Verma has raised concerns about the long-term fiscal impact of the proposed loan. Verma warned that continuing with the NSSF loan could impose a significant financial burden on the state. He recommended that Delhi consider opting out of the NSSF scheme to reduce liabilities, although this would require stronger revenue generation measures.

In July, the Union Government informed Delhi that the NSSF loan scheme would not be renewed annually, presenting the state with two options: continuing with the loan would result in a loan balance of Rs 45,000 crore by 2039 and an additional interest liability of Rs 57,661.68 crore, while opting out would eliminate all loan liabilities by 2039 but still require interest payments of Rs 11,681.68 crore by 2038-39.

Verma’s analysis indicated that continuing with the loan would lead to a total repayment burden of Rs 172,677.47 crore by 2038-39, whereas opting out could provide long-term fiscal relief.

Verma also pointed out that the impending implementation of the Model Code of Conduct (MCC) due to the elections could further delay initiatives and curtail expenditure. He projected Delhi’s expenditure for 2024-25 at Rs 68,300 crore, reflecting a 3.75% increase from the previous year.

The proposal to borrow from the NSSF has thus become a significant point of contention, highlighting the ongoing friction between Delhi’s elected representatives and its bureaucratic machinery. While the government pushes for immediate financial relief, concerns about the state's long-term fiscal health have intensified scrutiny of the decision.