Union Budget 2026-27 Doubles Capital Transfers to Delhi, J&K, and Puducherry
The Union Budget for the financial year 2026-27, presented by Finance Minister Nirmala Sitharaman, has significantly increased capital transfers to three Union Territories, including Delhi, Jammu and Kashmir, and Puducherry. This move is part of a broader strategy to enhance infrastructure development across these regions.
Unchanged Allocation for Delhi's General Budget
According to the budget documents, the allocation for Delhi under the Union Budget remains unchanged at Rs 1,348.01 crore for 2026-27, mirroring the provisions from the previous financial year. This amount includes Rs 968.01 crore under revenue expenditure and Rs 380 crore under capital heads, as transferred from the Union Ministry of Home Affairs.
In addition to this, Delhi received Rs 951 crore as Central assistance for Union Territories, aimed at financing various schemes of the city government. Specific grants were also allocated, such as Rs 380 crore for the Chandrawal Water Treatment Plant as an externally aided project, which focuses on improving water supply infrastructure and ensuring equitable distribution.
Other notable grants include Rs 2 crore for enhanced compensation to victims of the 1984 anti-Sikh riots and Rs 15 crore for contributions to the Union Territory Disaster Response Fund, intended for relief during notified disasters like earthquakes, droughts, and floods.
Significant Boost in Capital Transfers Under SASCI Scheme
The budget has more than doubled the capital transfers to Delhi, Jammu and Kashmir, and Puducherry under the Special Assistance to States for Capital Investment (SASCI) scheme. The total allocation under this scheme has surged from Rs 6,275 crore in the previous estimates to Rs 15,380 crore for 2026-27.
While the exact amount for Delhi is yet to be finalized, officials indicate that this increase could substantially boost funding for infrastructure projects in the city. The final allocation will depend on proposals submitted by the Delhi government.
The SASCI scheme, launched in 2020-21 to address financial stress caused by the Covid-19 pandemic, provides states with 50-year interest-free loans for infrastructure works such as roads, flyovers, bridges, and hospital buildings. In the current financial year, Delhi has already received Rs 825 crore under this scheme for projects including Delhi Metro Phase IV and improvements to roads and drains.
Inclusion of Union Territories and High-Speed Rail Corridor
Last year, following the BJP government's return to power in Delhi after 27 years, the Centre extended the SASCI scheme to include Union Territories with legislatures—Delhi, Jammu and Kashmir, and Puducherry. This inclusion aims to support their development needs more effectively.
In a related announcement, Finance Minister Nirmala Sitharaman revealed plans for seven high-speed rail corridors, one of which will connect Delhi and Varanasi. Officials believe this corridor will enhance connectivity, reduce travel time, boost tourism, create jobs, and support trade and industry in the region.
Budget Estimates and Revised Figures
According to the Budget Estimates for 2025-26, the transfer to Delhi was Rs 1,348.01 crore. However, in the Revised Estimates for the same year, this amount was reduced to Rs 1,242 crore. The current budget's focus on capital transfers highlights a shift towards prioritizing long-term infrastructure investments.
This strategic allocation underscores the government's commitment to fostering urban development and addressing critical infrastructure gaps in key Union Territories, with Delhi poised to benefit significantly from these enhanced funds.
