In a first, Delhi govt. to raise funds from market for infrastructure

The Delhi government on Monday (January 5, 2026) signed a Memorandum of Understanding (MoU) with the Reserve Bank of India (RBI), enabling the government, for the first time, to raise funds from the open market for the first time, the Chief Minister’s Office (CMO) said. Funds will be raised at an interest rate of nearly 7%, it added.

The statement quoted Chief Minister Rekha Gupta as saying that the funds will be utilised “exclusively for capital expenditure” on works such as Yamuna rejuvenation, drainage infrastructure, drinking water supply, health infrastructure, public transport and urban mobility, and other essential urban infrastructure.

Historical reform: CM

“This MoU is not merely an administrative arrangement. It is a historic financial reform that Delhi will benefit from for decades. With this step, Delhi embarks on a new journey of responsible governance, strong institutions, and sustainable growth, fully aligned with the vision of a developed India,” it added.

The CM termed the reform an outcome of sustained engagement with the Centre and a meeting with Union Finance Minister Nirmala Sitharaman last month, during which key issues concerning fiscal autonomy and the modernisation of Delhi’s financial architecture were discussed.

“Pursuant to a Government of India notification dated January 2, 2026, effective from 9 January, 2026, the Public Accounts of the Government of NCT of Delhi have been separated from the Public Accounts of the Government of India, providing Delhi an independent banking and borrowing structure for the first time,” read the statement.

Development loans

Till now, Delhi has not been able to borrow from the market because it did not have a separate ‘Public Accounts’, said a senior official. With the creation of this account, the government will be able to raise funds from the market through State Development Loans by issuing bonds or dated securities, the official added.

Under the MoU, the excess cash balance with the Delhi government will be invested automatically on a daily basis through RBI mechanisms, generating interest income and eliminating losses from idle funds, the CMO said.

“Delhi will have access to Ways and Means Advances and Special Drawing Facilities from RBI, ensuring efficient management of temporary cash flow mismatches without resorting to expensive or emergency borrowing,” it added.