``Delhi has one of the highest per capita loan liabilities in the country,'' says Delhi's Finance Minister Mahinder Singh Saathi. Which means that Delhi has the highest outstanding loan that it had taken from the Centre and failed to pay back. It also means that soon each Delhiite would have to start clearing the debt by paying a higher price for living in the Capital in terms of services and taxes.

Delhi gets loans from the Centre on its small savings. ``The loan resulted in a loan liability of Rs 3,788.17 crore up to 1998-99 for the Delhi Government. With this outstanding loan, every citizen of Delhi now has a per capita loan liability of Rs 3,084 as compared to Rs 3,009 in Uttar Pradesh, Rs 3,574 in West Bengal, Rs 3,396 in Maharashtra,'' Saathi says. But what is worrying economists is that this outstanding sum has accumulated in just the last five years, though other states have collected their debts in 50 years.

Now, it's feared that with the rapid pace at which the debt is increasing, most of the revenue that Delhi will get in the future may go in just paying back its Central loans. As a Finance Department official says: ``In this Budget we have returned Rs 5,500 crore only as interest on the loan that we have taken from the Centre in the past.'' The Centre charges 14 per cent on the loan it gives to the states.

The official points out that Delhi has to repay debt immediately because the ``Delhi Budget, unlike other states, goes to the President for approval. So it cannot pass the Budget without paying back the loan. In case of other states, the Budget is passed by their own Assemblies without clearing the debt to the Centre completely.''

The main reason for the massive debt, says the official, is the money that is given in loans to local bodies like the Municipal Corporation of Delhi, Delhi Vidyut Board, Delhi Milk Scheme and Delhi Transport Corporation.

``None of them return the loan to the Delhi Government and that is how the debt is accumulated. Instead of this the money should have been invested in reumnerative projects, which also pays back the capital locked in these institutions. But Delhi Government has failed to manage that,'' he says.

The loans to local bodies have eaten into the finances of the Delhi Government. According to Saathi, ``The rate of recovery of the loans from local bodies has already started crippling the financial position of the government.''

``If Delhi has to pay back most of the outlay it gets from the Centre, then it will have to generate more revenue of its own, which can happen only if the sales tax is increased or tariff on services is hiked,'' says the official. He warns: ``Delhiites are in for worse times in the future with life becoming much more expensive than anywhere else in the country.''

From 1993 to 1998, Delhi Government had given Rs 2550.42 crore under the plan outlay and Rs 1314.82 crore under non-plan outlay to local bodies. But recovery of dues under the same period has been only Rs 102.65 crore.