Delhi government has established a Consolidated Sinking Fund for debt repayment (AI-generated image used fro representational purposes)
LG TS Sandhu has approved the constitution and administration of the fund, which will start operating from the financial year 2026-27, and cannot be used for any purpose other than repayment of govt’s outstanding liabilities. At the end of March 2025, Delhi’s outstanding debt stood at Rs 30,556 crore, equivalent to 2.3% of its Gross State Domestic Product (GSDP) in 2025-26, according to Economic Survey 2025-26. It will be an amortisation fund for redemption of the outstanding liabilities of the govt commencing from 2026-27, according to the notification regarding setting up of the sinking fund. Under the scheme, government will make efforts to build the fund’s corpus to 5% of its outstanding liabilities within five years.
NEW DELHI: Delhi government has set up a debt repayment fund, named Consolidated Sinking Fund, to gradually build a reserve for repaying its existing debt and other financial liabilities with the objective of creating a long-term financial cushion for debt repayment. Simply put, from this financial year, Delhi government will start using the fund as a dedicated reserve to gradually repay the money it already owes.
