Modi Govt unveils ₹1 lakh crore budget for Delhi, promises major transformation

In a decisive move to reshape the national capital, the Narendra Modi-led central government has significantly increased financial grants to Delhi, aligning with its vision of a “world-class capital.”

The boost comes as part of the city’s Budget for the 2025-26 fiscal year, announced by newly elected Chief Minister Rekha Gupta on March 25.

The BJP, which reclaimed Delhi last month after a 30-year gap, has unveiled an unprecedented ₹1 lakh crore budget for the city. A key highlight is the sharp rise in central grants, soaring over 161% from ₹4,391 crore to ₹11,469 crore, signaling the Centre’s intent to fast-track infrastructure and urban development.

Delivering on the ‘double-engine sarkar’ promise

During its Delhi Assembly election campaign, the BJP had pitched the idea of a “double-engine government”— a synergy between the Centre and a BJP-led Delhi administration — to propel the city’s progress. The latest budgetary provisions underscore this commitment, with PM Modi personally instructing ministers and bureaucrats to ensure a “visible and tangible change” within three years.

Sources within the BJP indicate that the Prime Minister has urged various ministries, including Road Transport and Highways, Housing and Urban Affairs, Health and Family Welfare, and Inland Waterways, to collaborate on large-scale projects aimed at overhauling Delhi’s infrastructure.

Reversing AAP’s funding woes

In stark contrast to the previous AAP government’s ₹76,000 crore budget, which often sparked confrontations with the Centre over insufficient funds, the new dispensation is witnessing a different financial reality. The former AAP administration had repeatedly accused the BJP-led Centre of neglecting Delhi’s financial needs despite its substantial tax contributions.

For instance, last year, then-Finance Minister Atishi had demanded a ₹10,000 crore allocation from the Centre for Delhi’s infrastructure, citing the city’s ₹2.07 lakh crore contribution to income tax revenues. She compared Delhi’s plight to Maharashtra, which received ₹54,000 crore against Mumbai’s ₹5 lakh crore tax contribution, and Karnataka, which secured ₹33,000 crore for Bengaluru’s ₹2 lakh crore tax input.

The BJP, however, dismissed AAP’s claims, arguing that the Centre had been funding Delhi through various schemes and programs beyond direct budget allocations.

Breakdown of the 2025-26 Budget

The new budget estimates Delhi’s tax revenue at ₹68,700 crore, non-tax revenue at ₹750 crore, and small debt at ₹15,000 crore. Meanwhile, central grants under different categories account for ₹11,469 crore, distributed as follows:

• ₹4,128 crore under Normal Central Assistance and other central grants
• ₹7,341 crore under Centrally Sponsored Schemes

This marked increase in central funding reflects a synchronized effort by the Modi government and the Delhi administration to deliver on their campaign promise of a transformed national capital.

With a three-year timeline set, the coming years are expected to witness aggressive infrastructure development, potentially reshaping Delhi’s urban landscape.

As the BJP government settles into its new role in Delhi, the city’s residents will be watching closely to see whether this financial windfall translates into tangible progress or remains a political promise on paper.