In a significant boost to Delhi's infrastructure ambitions, the city government has secured the ability to raise funds directly from the open market through state development loans managed by the Reserve Bank of India. This new arrangement enables borrowing at substantially lower interest rates of approximately 7 percent, compared to the steep 12-13 percent charged through previous alternative channels, potentially saving substantial amounts on public projects.

The breakthrough came on Monday with the signing of a memorandum of understanding between the RBI and the Delhi government, establishing the central bank as the official banker, debt manager, and financial agent for the national capital. This agreement fundamentally transforms the public financial management framework, allowing streamlined market borrowings while ensuring professional oversight and efficiency in handling state finances.

Chief Minister Rekha Gupta, who also oversees the finance portfolio, hailed the development as a historic reform long denied to Delhi despite its status as the nation's capital. She emphasized that previous administrations lacked the commitment to embrace internationally recognized standards of fiscal responsibility, and credited persistent engagement with the central government for finally enabling this crucial provision.

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The pact further permits the Delhi government to park surplus funds through RBI mechanisms, facilitating daily investments that generate interest on previously idle resources. Additionally, the RBI has committed to providing low-cost liquidity support via ways and means advances and special drawing facilities to smoothly address any short-term cash flow discrepancies.

Gupta underscored her administration's unwavering focus on fiscal discipline, transparency, and long-term sustainability, stating that this MoU represents a cornerstone in responsible governance. The enhanced financial tools are expected to accelerate the execution of vital infrastructure and development initiatives across the city.

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