Delhi notifies sinking fund for debt repayments

Delhi will begin setting aside money in a consolidated sinking fund in 2026-27, creating a dedicated reserve to repay outstanding liabilities.

A gazette notification dated August 24 says the fund will replace the existing scheme. The balance in the existing scheme as of March 31, 2026, will move to the new account. The government must aim to build the corpus to 5% of its outstanding liabilities within five years.

Delhi’s outstanding debt stood at ₹30,556.54 crore at the end of March 2025. This included ₹3,326.39 crore in non-plan loans received from the Centre in 2013-14 for liabilities linked to DVB/DESU, and ₹447 crore for the Chandrawal Water Treatment Plant under the JICA-aided Delhi Water Supply Improvement Project.

The government can contribute general revenue, disinvestment proceeds or other sources, but cannot borrow from the Reserve Bank of India to finance its contribution. The RBI’s central accounts section in Nagpur will administer the fund and invest it in specified government securities and Treasury Bills.

Withdrawals are not permitted for five years. After that, the money can be used only to repay outstanding liabilities, subject to prescribed limits.