by Yogesh Kant
As Delhi’s political landscape gears up for the 2025 assembly elections, the promises of freebies and guarantees from Aam Aadmi Party (AAP) and Bharatiya Janata Party (BJP) are dominating the narrative. Congress is also trying to regain its position in Delhi political landscape through its style welfare schemes. These parties are vying to outdo each other with generous welfare schemes aimed at capturing voter loyalty. While such promises have become a staple in Delhi’s elections, they come with an undercurrent of economic concern—a significant burden on the city’s budget that could have long-term repercussions for its financial health.
AAP, the incumbent party, has built its political identity on its welfare model. Since coming to power in 2015, the party has introduced and sustained schemes like free electricity for households consuming up to 200 units, benefiting nearly 4.8 million users, free water up to 20,000 liters per month, which reaches around 1.8 million households, free bus rides for women utilized by over 40% of the city’s female commuters, and the much-lauded Mohalla Clinics that have served over 63 million patients since their inception. Ahead of the elections, AAP has also introduced new promises such as the ‘Mukhyamantri Sanjeevani Yojana,’ which provides cashless medical treatment with no upper limit, and a proposed ₹2,100 monthly allowance for women above the age of 18—a scheme that could cost the exchequer over ₹13,000 crore annually if implemented for Delhi’s 6.2 million eligible women.
However, fulfilling these promises is proving to be a herculean task. To fund its election guarantees, the AAP government recently sought a ₹10,000 crore loan from the National Small Savings Fund (NSS). While this move may provide short-term relief, it could also result in major financial consequences due to the heavy interest burden associated with such loans. Experts estimate that repaying this loan, alongside existing subsidies, could strain Delhi’s budget for years, limiting funds for other critical developmental projects.
The subsidy budget of the Delhi government has skyrocketed over the past decade. In 2014-15, the total subsidy allocation stood at ₹1,555 crore. This figure nearly doubled in 2015-16, soaring to ₹3,018 crore, and the revised estimates for 2024-25 project it to reach an unprecedented ₹11,000 crore. Among these, the power sector has seen the most significant increase. From ₹292 crore in 2014-15, power subsidies grew over fivefold to ₹1,443 crore in 2015-16 and are expected to surpass ₹3,600 crore in 2024-25. This subsidy enables private discoms to provide free electricity to consumers using up to 200 units monthly and half-rate for those using up to 400 units. If free electricity is extended to consumers using up to 300 units, as promised by Congress, the subsidy budget could swell by an additional ₹1,000 crore.
