Kejriwal, Sisodia Make Untrue Claims About Delhi's Surplus Revenue

"They (CAG) have said that ever since the Aam Aadmi Party government was formed in Delhi, the government has been running in profit… This honesty isn't letting our opponents sleep in peace," Kejriwal tweeted in Hindi on July 6. Deputy CM Sisodia too hailed the "Kejriwal model of governance" and tweeted, "When every state government is facing huge revenue deficit, it's only and only Arvind Kejriwal government running revenue surplus since 2015."

Factchecker referred to official data from previous years and spoke to experts to verify these claims and provide more context on Delhi's comparison with other states.

Fact: This claim is false for two reasons: Firstly, in 2019-20, which is when the audit was conducted, 10 other states in India apart from Delhi accumulated a revenue surplus. Secondly, Delhi being a Union Territory does not have the same ability as other states to raise debt, and so cannot be compared directly to them.

Before we delve deeper into facts, let's first understand what revenue surplus means. Revenue surplus indicates that revenue receipts of the government are sufficient to meet the revenue expenditure. Revenue receipts consist of the money earned through tax or non-tax sources by the government. Revenue expenditure is the expenditure that does not affect a government's assets or liabilities, explained an analyst from PRS Legislative Research. This can include salaries, interest payments, pensions, administrative expenses, and subsidies.

The CAG report that Sisodia tabled in the Assembly was released in 2021 and provides a review of the annual accounts of the Government of NCT of Delhi for the fiscal year 2019-20. FactChecker found that in 2019-20, 11 states in total accumulated a revenue surplus, according to data from the Reserve Bank of India (RBI). So, it's incorrect to say that only the Delhi government has a revenue surplus.

Uttar Pradesh showed the highest revenue surplus in 2019-20 among these states at Rs 67,560 crore. Apart from UP and Delhi, north-eastern states of Arunachal Pradesh, Manipur, and Mizoram had a surplus revenue. Bihar, Gujarat, Himachal Pradesh, Jharkhand, Karnataka, and Odisha also collected revenues in excess of their revenue expenditure.

Dr Alok Sheel, ex- RBI Chair Professor in Macroeconomics at the Indian Council for Research in International Economic Relations (ICRIER), told Factchecker that Delhi, by virtue of largely being an urban area, has had traditionally high commercial activity, and thus higher revenue collection. "The more the economic activity, the higher the tax base. It is not a new creation… If you look at the finances of major cities on a stand-alone basis, they usually have a revenue surplus," Sheel explained.

Additionally, the CAG report specified that Delhi, being a Union Territory, does not have the ability to raise debt from the open market like other states. It can only receive grants from the Centre, so to compare it with other states won't be an apples-to-apples comparison. Moreover, comparing states' surplus or debt without considering their population, size, or size of their economy is incorrect.

The CAG report also added that Delhi has been able to maintain a revenue surplus as a chunk of its expenses are paid for by the Centre. "The NCT of Delhi has been able to maintain a revenue surplus largely on account of pension liabilities of GNCTD employees being borne by the Government of India. In addition, expenditure of Delhi Police is also borne by the Ministry of Home Affairs," read the CAG report.

FactChecker had verified a similar misleading claim by the Aam Aadmi Party in April 2022 when it listed the debt burden of seven BJP-led states and compared it to Delhi's revenue surplus.

And, a tweet from the party's official handle read, "Delhi government has been running in profit ever since Arvind Kejriwal became the chief minister."

Fact: According to RBI's records, Delhi has had a surplus revenue for at least 10 years before the AAP government was formed. The claim is thus, misleading.

Here is a look at Delhi's revenue surplus from FY 2005-06 to FY 2019-20. This clearly illustrates that Delhi has not run into a revenue deficit in at least 15 years.

In fact for FY 2006-07, Delhi's revenue surplus at Rs 15,188 crore was nearly double of what it was in FY 2019-20.

Twice more in the last 15 years was the revenue surplus of the UT higher than 2019-20. Once before the AAP government in 2010-11 at Rs 10,640 crore, and once right after the Kejriwal government was elected in 2015-16, at Rs 8,660 crore.

One more thing: In the above claim, CM Kejriwal and AAP refer to the revenue surplus values as profit. But government money is largely tax-payer money, so terms like 'profit' for surplus and 'loss' for deficit are not completely applicable when looking at government accounts, Sheel told Factchecker.

Moreover, when FactChecker looked at Revenue Surplus (RS) as a percentage of the total Gross Domestic State Product (GSDP), in addition to the actual RS figure, to account for increasing inflation and changing size of the economy, we found a dip — 1.57% in 2015-16 to 0.88% in 2019-20. The absolute surplus amount also decreased — from Rs 8,656 crore in 2015-16 to Rs 7,499 crore in 2019-20.

We contacted the AAP social media team via email, and AAP's Chief Media Coordinator Vikas Yogi via call and text asking for clarification on these claims, but had not received a response by the time of publishing this article. We also wrote to Manish Sisodia, Deputy CM Delhi, about his tweet and tried contacting him via call and text, but got no reply. If and when we receive a response, it will be updated here.