Municipal finances are in the deficit and there is no clarity on how funds will come in future
Jasleen Kaur | June 13, 2015 | New Delhi
The streets of Delhi may get cleared in the next few days but the mess of finances and administrative ambiguity will continue to emit foul smell as they are not going to be cleared anytime soon.
Piles of garbage, accumulated for 10 days, are being lifted from Saturday after the sanitation workers at the north and east Delhi municipal corporations resumed duties with the payment of their salaries.
The cash-strapped civic bodies blamed the Delhi government for the filth on roads as it had not released funds leading to the sanitation workers’ strike for the second time in six months. Another strike and the capital turning into garbage dump cannot be rules out.
The workers may have called off the strike, but the problem of financial crunch is still haunting the corporations and the question of who is responsible is still unanswered.
The obligatory and discretionary functions of the civic bodies include maintenance of drains and drainage works including scavenging, removal and disposal of filth. For this the corporations levy property tax and education cess. The Delhi government gives 5.5% of its revenue (according to the third finance commission) to the municipal corporation/s, which comes to about Rs 500 crore annually.
Shakti Sinha, former finance and power secretary at Delhi government, says that though the erstwhile MCD (and now its three successors after trifurcation) have to raise own revenues through various taxes, the Delhi government also has the constitutional obligation to financially support the civic bodies for the development work.
“The fourth finance commission is a long-pending issue with the state government and it has not taken any action yet. Under this, the Delhi government has to give a certain percentage (12.5%) of its raised revenue to MCD,” he said.
The recommendation of the fourth finance commission has been pending for the last two and a half years.
While the financial problem waits for resolution the politics is mudding the situation further. The three civic bodies are controlled by the Bharatiya Janata Party (BJP). The civic bodies’ funds come from the centre through the Delhi government, which controls allocation to all three civic agencies in the city.
Civic officials say that the fund released by the Delhi government, Rs 500 crore, would not be sufficient and an additional amount will be required to clear the pending dues of the employees.
“Since trifurcation of the municipal corporation in 2012, the north Delhi municipal corporation was under a debt of Rs 700 crore. There was a gap of Rs 1000 crore between the expenditure and income of the corporation. And with time the financial crunch has kept increasing,” says Ravinder Gupta, mayor of North Delhi municipal corporation.
He adds that the Congress-ruled Delhi government had given loan to the municipal corporation and charged interest rate of 11.5 percent. It, however, did not release due funds. “We asked for a solution from chief minister Arvind Kejriwal but instead of supporting the municipal bodies the AAP government refused to release the funds.”
The government has now released Rs 500 crore to the municipal corporations, under which North Delhi corporation would get Rs 332 crore, says Gupta. However, the funds may not be sufficient for the payment of salaries to all the employees as the requirement is of Rs 600 crore, Gupta said.
“In the past, there has never been a situation like this when the sanitation workers were forced to go on strike. Funds were always released on time,” he adds.
Trouble since trifurcation
Following the trifurcation of the MCD into east Delhi municipal corporation, north Delhi municipal corporation and south Delhi municipal corporation by the Congress government in 2012, the financial health of the civic body has deteriorated. Increase in the number of councilors is among the many reasons for the financial crunch.
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