Delhi Government’s ₹1,000 Monthly Scheme for Women Faces Fiscal Concerns
The Delhi government’s Mukhya Mantri Mahila Samman Rashi Yojna (MMMSY), promising ₹1,000 monthly for women, has hit a roadblock due to fiscal concerns raised by the Finance Department. Initially announced in the 2024-25 budget, this flagship scheme by AAP leader and former Chief Minister Arvind Kejriwal was labeled as the government’s seventh “revdi” and slated for disbursement by September-October 2024. However, its implementation was delayed following Kejriwal’s arrest in the excise policy case.
Fiscal Red Flags Raised
Finance Secretary A.C. Verma flagged the scheme’s high recurring costs in a note to Finance Minister Atishi, warning it could strain Delhi’s finances. The projected financial liability of the scheme for 2025-26 stands at ₹4,560 crore. Verma emphasized that Delhi’s government lacks market borrowing powers and relies on National Small Savings Fund (NSSF) loans, which come with capped availability and high-interest costs.
The note stated:
“Using expensive capital receipts such as NSSF for long-term revenue expenditure commitments would be improper and risky, incurring huge interest liabilities.”
The Finance Department urged strict fiscal discipline, recommending alignment of revenue expenditure with revenue receipts.
Pushback from Atishi
Despite these concerns, Atishi directed the Finance and Planning Departments to expedite their review of the scheme. She maintained that the government has allocated ₹2,000 crore for MMMSY in the current budget and argued that the scheme could still be implemented within the financial year.
“Revenue projections are on track; therefore, existing provisions are likely to be met. It is too early to decide if MMMSY will not be implemented this year,” Atishi stated.
She also highlighted that schemes might roll out faster or slower than initially planned, with sufficient time remaining in the fiscal year to proceed.
Budgetary Impact
The Finance Department noted that MMMSY, coupled with other initiatives like subsidizing the Delhi Jal Board’s revenue deficit, would add significant financial burdens. These two schemes alone would increase Delhi’s revenue expenditure liability by ₹7,000 crore in 2025-26, representing a 12% incremental liability.
A December 3 note projected a budget deficit of ₹8,159 crore for the next financial year, factoring in both revenue and capital accounts. Delhi’s current subsidy bill, already at ₹10,995 crore, was also cited as a concern, with calls for better targeting and reconsideration of user charges.
Recommendations
Given the fiscal strain, the Finance Department recommended deferring MMMSY’s implementation. Verma suggested that the scheme be revisited during the revised estimates (RE) stage for 2024-25, once resource flows are clearer.
The department concluded:
“Implementation of the scheme is likely to begin after three months, i.e., next year. It will be prudent to await actual resource flow and reconsider the proposal at RE 2024-25.”
What Lies Ahead
As debates over MMMSY’s feasibility continue, the Delhi government faces the challenge of balancing its ambitious welfare programs with fiscal prudence. Whether the scheme will see light in the current financial year remains to be seen, pending further analysis and resource availability
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