In 1991, the sixty-ninth amendment to the Constitution of India granted Delhi the status of a special union territory and officially changed its name to the National Capital Territory of Delhi (NCT). Delhi has its own Legislative Assembly, Lieutenant Governor, Council of Ministers and Chief Minister. The legislative assembly seats are filled by direct election from territorial constituencies in the NCT. However, the Union Government of India and the Government of National Capital Territory of Delhi jointly administer New Delhi. New Delhi, an urban area in Delhi, is the seat of both the State Government of Delhi and the Government of India.

Delhi has always been a stronghold of the Indian National Congress, locally known as the Congress Party. The trend started to change in the 1990s when the Bharatiya Janata Party (BJP) under the leadership of Madan Lal Khurana came into power for the first time. However, in 1998 Sheila Dixit of the Congress Party defeated Madan Lal Khurana in state elections and has remained in power since then.

The per-capita electricity consumption is about 1,000 kwh but actual demand is much more. In 1997, Delhi Vidyut Board (DVB) replaced Delhi Electric Supply Undertaking which was managed by the MCD. In 2002, the annual demand for electric power in Delhi touched 3250 MW while DVB's own electric power production was only 405 MW. The DVB meets rest of the electricity demand by drawing power from India's Northern Region Grid. As a result, Delhi faces a huge power shortage resulting in frequent blackouts and brownouts. Several industrial units in Delhi rely on private electrical generators to meet their electric demand. The Delhi government invested 149.2 billion INR in the city's energy sector and privatised Delhi's energy distribution system. However, the city continues to face acute power crisis especially during the summer season when energy demand is at its peak. Power theft is worse in Delhi than in any other major Indian metropolitan city. According to a report by BSES, Delhi's main electricity distribution company, 35% of Delhi's power is stolen.

Water supply in Delhi is managed by the Delhi Jal Board (DJB). In 2001, 731 MGD of water was consumed by various households in Delhi out of which 609 MGD was supplied by DJB while the rest 122 MGD was met by private and public tube wells and hand pumps.[13] Illegal water tapping in Delhi is very common. At 250 MGD, the Bhakra storage is the biggest water source for DJB followed by river Yamuna and Ganges. Due to the falling level of ground water in Delhi, DJB is constructing several dams across river Yamuna, water treatment plants and water reservoirs. PWD and DJB have also implemended schemes for harvesting rain water. In 2002, the DJB had a water treatment capacity of 497.4 MGD