New Delhi, April 18 -- The Delhi government has reversed its earlier decision that had capped departmental spending at just 5 per cent of their allocated annual budget for the month of April, following strong objections from various departments whose key schemes were disrupted.

The original order, issued by the finance department on March 31, aimed to align spending with cash availability and improve fiscal discipline. However, the sweeping measure caused unintended delays in the implementation of several crucial public schemes and projects.

Amid growing concerns and requests from multiple departments, the finance department on Thursday issued a fresh directive formally withdrawing the cap. "In continuation of this office order. dated March 31, 2025. the said order is withdrawn with immediate effect," read the new communication. It also stated that departments should now resume spending in accordance with the financial powers delegated to them under the 2019 office memorandum.

Officials said the cap was meant as a temporary measure to monitor departmental expenses more closely and ensure better cash flow management. "The idea was to map expenditure in line with available resources and maintain liquidity for essential functions," an official said.

The earlier restrictions had created significant bottlenecks, stalling development and welfare schemes across departments, including those in health, education, and infrastructure. While expenses under essential heads like salaries, wages, sanitation, security, electricity, and water supply were exempted, many non-salary but urgent expenditures could not be processed.

Officials said several departments flagged the move as "unworkable" given the number of contracts, ongoing works, and early fiscal year disbursements that typically occur in April. "It wasn't a question of reckless spending, but the inability to meet even scheduled commitments under the tight 5 per cent window," said one senior official on condition of anonymity. The rollback is expected to provide immediate relief to departments struggling to execute programmes in the new financial year. With the restriction lifted, administrative secretaries and department heads have been

advised to manage their expenditures as per the standard delegation of powers issued in August 2019.

The finance department's decision to swiftly address feedback and course-correct reflects a more responsive approach to fiscal governance as Delhi's budgetary implementation kicks into gear for 2025-26.

Published by HT Digital Content Services with permission from Millennium Post.