Delhi Government Revokes 5% Budget Cap

The Delhi government has retracted its decision to impose a 5% cap on budgetary spending. Initially introduced in April for better cash management, the cap limited spending for various departments. The Finance Department has now instructed departments to follow the 2019 financial delegation guidelines.

The Delhi government has reversed its earlier decision of imposing a restrictive spending limit on its departments, withdrawing a 5% budget cap. The cap, which came into effect in April, was intended to align expenditure with available resources.

In a recent directive, the Finance Department communicated that the restriction on budgetary allocations for the 2025-26 fiscal year is no longer in place. This change allows departments to manage funds as per the broader financial management guidelines issued in 2019.

The initial cap, declared on March 31, aimed to control April expenditures within 5% of the assigned budget to enhance cash flow management and resource alignment.

(With inputs from agencies.)