Why Delhi is a National Capital Territory and not a full State
Background
Article 239AA of the Constitution is headed “Special provisions with respect to Delhi”. From the commencement of the Constitution (Sixty-ninth Amendment) Act, 1991 the Union territory of Delhi is called the National Capital Territory of Delhi, and the administrator appointed under Article 239 is designated as the Lieutenant Governor. The Article itself provides for a Legislative Assembly whose members are chosen by direct election from territorial constituencies; the total number of seats, the seats reserved for Scheduled Castes and the division into constituencies are regulated by law made by Parliament. The Assembly may make laws on matters in the State List and the Concurrent List as applicable to Union territories, “except matters with respect to Entries 1, 2 and 18 of the State List and Entries 64, 65 and 66 of that List in so far as they relate to the said Entries 1, 2, and 18” — that is, entries 1 (public order), 2 (police) and 18 (land). A State legislature faces no such exclusion. There is a Council of Ministers of not more than ten per cent of the total members of the Assembly, with the Chief Minister at the head, to aid and advise the Lieutenant Governor on matters within the Assembly's legislative competence. Where the Lieutenant Governor and his Ministers differ, the Lieutenant Governor refers the matter to the President and acts according to the decision given. If a law of the Assembly is repugnant to a law of Parliament on the same matter, the law made by Parliament prevails and the Assembly's law is void to the extent of the repugnancy. Delhi falls in the category of a Union territory whose legislature is created by the Constitution itself.
In plain words
NCT National Capital Territory — The constitutional name of Delhi as a Union territory with its own Legislative Assembly.
State List List II of the Seventh Schedule — The list of subjects on which a State legislature normally has exclusive power to make laws.