Delhi Budget 2026-27: Open market borrowing for the first time, central grants reduced

March 25, 2026

New Delhi: The Delhi government has decided to borrow from the open market for the first time in Budget 2026-27. A provision of ₹16,700 crore has been made for borrowing from the market in the total budget of ₹1.03 lakh crore.

Preparations to obtain cheaper loans from the open market

Until now, the Delhi government used to borrow from the National Small Savings Fund (NSSF), which carried a higher interest rate. However, the government is now moving towards borrowing from the open market at a lower interest rate (around 6.5% to 7.5%).

After reaching an agreement with the Reserve Bank earlier this year, Delhi received approval to borrow from the market.

Decline in central grants

The budget has seen a decrease in central grants. While it was estimated at ₹12,095 crore last year, the revised estimate reduced it to ₹5,295 crore.

This year, it has increased to ₹7,092 crore, but it is still lower than before.

Emphasis on infrastructure, new loan plans

The government has proposed to borrow ₹2,500 crore under the SASCI scheme to boost capital expenditure and infrastructure development.

According to officials, this scheme provides loans on easy terms for a long period (50 years), which will accelerate development work.