AAP Uses Unfair Comparison to Claim Delhi Only State with Budget Surplus
The Aam Aadmi Party compared BJP-led states' debt with Delhi's revenue surplus, which is misleading
The Aam Aadmi Party-led Delhi government presented a Rs 75,800-crore "Rozgaar Budget" for 2022-23 on March 26, 2022. Less than two weeks later, on April 7, 2022, AAP claimed that while the Bharatiya Janata Party-governed states were in huge amounts of debt, Delhi was the only "state" with a surplus budget.
"If you want to learn governance, learn it from Kejriwal government. By emptying people's pockets, BJP makes states indebted," tweeted AAP in Hindi. It listed in debt burden of seven BJP-led states — Uttar Pradesh, Karnataka, Madhya Pradesh, Gujarat, Haryana, Uttarakhand and Himachal Pradesh — and compared it to Delhi's revenue surplus.
The tweet has been archived here.
There are four factors that prove this claim misleading:
1. Debt-revenue surplus comparison unfair: AAP, in its tweet above, compares total liabilities of BJP-led state governments with Delhi's budget surplus revenue for 2022-23, which however is not a like-to-like comparison. Here's the breakup of Delhi's budget that shows the amount quoted in the tweet is the revenue surplus.
Budget 2022-23 (in Rs Cr)
"It's not an apples-to-apples comparison. It would be useful to look at the Revenue Deficit or Surplus numbers for other states rather than just outstanding liabilities which is the accumulation of total borrowings at the end of a financial year," said Avani Kapur, a Fellow at the Centre for Policy Research, where she leads the Accountability Initiative.
A revenue surplus implies that in a given year, revenue receipts of the state are sufficient to meet its revenue expenditure (includes expenditure such as salaries, pension, interest and subsidy). The revenue surplus can be used to pay off outstanding debt or create capital assets. All of the borrowings can be channelised towards only those expenditure items which lead to increase in assets or reduction in liabilities, explained Saket Surya, senior analyst at PRS Legislative Research. "Outstanding debt and Revenue Surplus are two different concepts. Outstanding debt represents the accumulation of borrowings done over the years. Comparison of outstanding debt with revenue surplus would not be a like-to-like comparison," he told FactChecker.
Moreover, Delhi had, during the budget stage last year too, expected a revenue surplus of Rs 1,271 crore in 2021-22. But, it is estimated to have observed a revenue deficit of Rs 3,039 crore (0.33% of GSDP), showed PRS Legislative Research's analysis.
2. Delhi too in debt: While AAP enlisted other states' debt, what it did not mention was the debt the Delhi government is under. Delhi's outstanding debt was estimated to be Rs 40,697 crore at the end of 2020-21 (5.18% of GSDP), according to 2022 Delhi Economic Survey.
3. Delhi can't borrow from market: Delhi, being a Union Territory, does not have the same ability as other states to raise debt.
"While comparing the outstanding debt level of Delhi with other states, it may be important to note that Delhi is not allowed to borrow from the market, unlike other states. Delhi's debt only comprises any loans from the central government," explained Surya. This means that Delhi's debt with other states' can't be practically compared.
Furthermore, the debt of a state is dependent on many factors, the most important being its GDP. Comparing states' debt without considering their population, size or size of their economy is incorrect. "Debt levels of governments are usually compared relative to the size of their economy. For this purpose, debt is expressed as a percentage of GDP. For example, one may compare Uttar Pradesh's debt in rupees terms with that of Himachal Pradesh. However, Himachal Pradesh is a smaller state with a smaller GDP as compared to Uttar Pradesh, then, Uttar Pradesh's level of debt will look much higher when compared to Himachal Pradesh's amount," Surya added.
4. Other states too have revenue surplus: Of the BJP-led states listed in AAP's tweet, three have shown a revenue surplus in their recent budget — Uttar Pradesh (Rs 23,210 crore), Gujarat (Rs 1,006 crore) and Uttarakhand (Rs 115 crore). The numbers for Uttarakhand and UP are from 2021 since both states had elections in 2022.
Surplus/ Deficit (in Rs crore)
(+) 23,210 * (2021)
Source: PRS (*numbers are from 2021)
The other states with a revenue deficit include Karnataka (Rs 14,699 crore), Madhya Pradesh (Rs 3,736 crore), Haryana (Rs 9,774 crore) and Himachal Pradesh (Rs 3,903 crore).FactChecker contacted AAP's Chief Media Coordinator Vikas Yogi via call and text and sent an email to the party's social media team. But had not received a response by the time of publishing. The article will be updated if and when we receive a response.