CAG report flags fall in Delhi’s contribution to national GDP

New Delhi: Delhi’s economic growth has lagged the national economy over the past decade, with the national capital's contribution to India’s GDP declining from 4% in 2015-16 to 3.67% in 2024-25, a Comptroller and Auditor General (CAG) report tabled in the Delhi Assembly on Monday said.

The report, tabled by Chief Minister Rekha Gupta, reviewed the finances of the Delhi government for 2024-25, including its financial position, expenditure patterns, debt and compliance with fiscal responsibility norms during the period when the Aam Aadmi Party (AAP) was in power.

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Delhi’s GSDP at current prices stood at Rs 12.15 lakh crore in 2024-25, registering a 9.17% increase over the previous year, the report said. The national capital accounted for 3.67% of India’s GDP during the year.

The CAG said Delhi’s GSDP had shown a healthy trend in 2024-25, but its share in the national economy had declined over the past decade, indicating that the city’s growth had not kept pace with the country’s overall economic expansion.

The annual compound average growth rate of Delhi’s per capita GSDP stood at 6.39% during 2015-25, below the 8.14% growth in India’s per capita GDP during the same period.

The report noted that Delhi’s per capita GSDP was 177.07% higher than the country’s per capita GDP in 2015-16. By the end of 2024-25, the gap had narrowed, with Delhi’s per capita GSDP standing 135.34% above the national figure.

“This reflects the slightly slower economic growth of the Delhi government compared to the rest of the country,” the report said.

Revenue rises, but capital spending declines

Delhi’s revenue receipts increased 9.57%, mainly supported by higher tax collections, particularly GST. However, non-tax revenue declined 11.04%, while grants received from the Centre also fell, the report said.

The CAG said revenue expenditure accounted for 88.38% of the growth in Delhi’s total expenditure during 2015-25, with committed expenditure and subsidies contributing significantly and leaving limited room for capital investment.

Subsidies rose by Rs 3,222 crore, or 172.48%, during the period, largely due to a Rs 2,033-crore, or 128.83%, increase in power subsidies.

Capital expenditure as a share of total expenditure remained between 7% and 15% during 2015-25, reflecting constraints on infrastructure investment and capital formation, according to the report.

Capital expenditure fell to Rs 3,695 crore in 2024-25 from Rs 6,855 crore in 2023-24, with lower spending on areas including roads and bridges and road transport contributing to the decline.

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Economic Survey projects higher per capita income

Delhi’s per capita income at current prices is estimated to rise to Rs 5,31,610 in 2025-26, according to the Advance Estimate in the Economic Survey report for 2025-26, tabled by Gupta in the Delhi Assembly earlier in March.

The estimate represents a 7.92% increase over 2024-25. The report said Delhi’s per capita income is expected to be around 2.5 times the national level in 2025-26.

Gupta had said the survey was evidence of Delhi’s “rapidly growing” economy, infrastructure and welfare policies. She said the Delhi government’s objective was to develop the capital into a world-class, inclusive, equitable and liveable city.

Delhi’s GSDP at current prices is projected to reach Rs 13,27,055 crore in 2025-26, an increase of 9.42% over 2024-25. At constant prices, the Advance Estimate puts GSDP at Rs 7,76,479 crore, representing 8.53% growth over the previous year.

The survey projected a revenue surplus of Rs 9,661.31 crore for 2025-26, equivalent to 0.73% of GSDP. Delhi’s revenue surplus stood at Rs 12,247.03 crore in 2024-25 (provisional), compared with Rs 6,462.30 crore in 2023-24.

The fiscal deficit, however, is estimated at Rs 13,703 crore in the 2025-26 Budget Estimates, mainly due to a sharp increase in capital expenditure.

Capital expenditure has been raised from Rs 11,485 crore in 2024-25 (provisional) to Rs 28,115 crore in 2025-26, an increase of 145%.

The Delhi government’s 2025-26 Budget was set at Rs 1 lakh crore, including Rs 59,300 crore for government schemes, programmes and projects. This was Rs 20,300 crore higher than the Rs 39,000 crore allocated for the same purpose in the 2024-25 Budget Estimates.

The survey said Delhi finances a major part of its expenditure through its own tax revenue, which accounted for 68.7% of the Expenditure Budget in 2025-26.

GST and VAT are expected to contribute 71.3% of the total tax revenue in 2025-26, followed by excise at 10.2%, stamp duty at 13.1% and Motor Vehicle Tax at 5.4%.

Delhi’s economy continues to be dominated by the services sector, which is projected to account for 86.32% of Gross State Value Added at current prices in 2025-26. The secondary sector is estimated to contribute 12.88%, while the primary sector is expected to account for 0.80%.