CAG report 2024-25 signals decline in Delhi’s contribution to national GDP | Economy & Policy News

A CAG report tabled in the Delhi Assembly by Chief Minister Rekha Gupta on Monday highlighted the overall declining trend of GSDP, indicating “slightly slower” economic growth of the city as compared to the rest of the country.

The report on the finances of Delhi government for 2024-25 analysed overall financial health, expenditure trends, debt position, and compliance with fiscal responsibility during the period when the Aam Aadmi Party (AAP) was in power in Delhi.

The economic growth and gross state domestic product (GSDP) of Delhi showed a “healthy trend” in 2024-25. The GSDP at Rs 12.15 lakh crore registered a growth of 9.17 per cent over the previous financial year, the report by the Comptroller and Auditor General (CAG) of India said.

It said Delhi contributed 3.67 per cent to the gross domestic product (GDP) of India in 2024-25. GDP refers to the total value of goods and services produced within a country, while GSDP measures the same at the state or Union territory level, and both reflect economic development and overall progress.

The annual growth of per capita GSDP (6.39 per cent) measured in terms of compound average growth rate (CAGR) during 2015-2025 remained lower than the annual growth in per capita GDP (8.14 per cent) during the same period, according to the report.

The contribution of Delhi’s GSDP to the GDP showed an overall declining trend during the last 10 years, decreasing from 4 per cent in 2015-16 to 3.67 per cent in 2024-25, indicating that Delhi’s growth did not keep pace with the overall growth of the national economy, the report said.

“This is evidenced from the fact that the per capita GSDP of the NCT of Delhi, which was 177.07 per cent more than the per capita GDP of the country in 2015-16, was 135.34 per cent greater at the end of 2024-25. This reflects the slightly slower economic growth of the Delhi government compared to the rest of the country,” the report said.

It was observed that the revenue receipts of the Delhi government grew by 9.57 per cent, driven by higher tax collections, most notably the goods and services tax (GST).

However, non-tax revenue growth was negative (-11.04 per cent) and grants from the Centre declined, the report said.

Delhi government’s expenditure was dominated by higher growth of revenue expenditure (88.38 per cent), particularly committed costs and subsidies, leaving limited fiscal space for capital investment, it pointed out.

“Subsidies increased by Rs 3,222 crore (172.48 per cent) during the period 2015-25, mainly due to increase in power subsidies by Rs 2,033 crore (128.83 per cent),” the report said.

The capital expenditure of the government during the period 2015-25 showed a declining trend, ranging from 7 per cent to 15 per cent of total expenditure, reflecting constraints in infrastructure investment and capital formation, according to the report.

It declined to Rs 3,695 crore in 2024-25 as compared to Rs 6,855 crore in 2023-24. The decline was due to less expenditure in different areas such as roads and bridges, and road transport, the report said.