The Delhi government has rescinded its earlier directive that limited departmental expenditures for April to 5% of the 2025–26 budget estimates. Effective immediately, all departments are instructed to adhere to the financial powers delegated through a 2019 order issued by the then Lieutenant Governor.
The initial spending cap, introduced at the start of the fiscal year, aimed to enforce fiscal prudence amid budgetary constraints. However, the cap faced criticism from various departments, which argued that the restriction hindered the execution of essential projects and services. The withdrawal of the cap is seen as a move to facilitate smoother administrative functioning and ensure timely implementation of departmental initiatives.
The 2019 order, now reinstated, outlines the financial powers of various departmental heads, allowing for more autonomous decision-making within specified limits. This framework is designed to streamline administrative processes and reduce bureaucratic delays in financial approvals.
The decision to revert to the 2019 financial protocol comes in the backdrop of ongoing discussions about the balance of power between the elected Delhi government and the office of the Lieutenant Governor. In May 2023, the Supreme Court ruled that the Delhi government should have control over administrative services, excluding matters related to land, police, and public order. However, subsequent legislative actions by the Centre have sought to redefine the extent of the Lieutenant Governor’s authority, leading to a complex administrative landscape.
The reinstatement of the 2019 financial guidelines is expected to provide clarity and stability in departmental operations. By empowering departments with defined financial autonomy, the government aims to enhance efficiency and accountability in public service delivery.
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