The dispute over the allocation of funds for the municipal corporation in Delhi stems from Delhi’s unique constitutional position: a Union territory with a legislative assembly, the trifurcation of the former Delhi Municipal Corporation (MCD), and the flow of grants from the center. to the Delhi government, experts have said.
While the Delhi government says it has paid all fees to the three BJP-ruled DCMs, municipal leaders claim that the AAP dispensation still owes billions of rupees to civic bodies. Cash-strapped corporations have faced protests from their employees who haven’t been paid for months.
The Delhi government said on Monday that the Center owes corporations 12 billion rupees. On Tuesday, Prime Minister Arvind Kejriwal reiterated his government’s position. “The Center makes grants to all municipal corporations across the country, based on a formula of Rs 485 per person in the population. However, it is not paying grants to the three DCMs for the past 10 years. “
However, the mayor of the North corporation, Jai Prakash, said there is no such provision in the current financial rules. “When there is currently no such financial provision, how can the Center release the funds? The CM is drifting off topic. Under the provisions, the Delhi government has to pay Rs 13,500 million to municipal corporations as recommended by the Delhi Finance Commission (DFC). “
The government’s position is based on the recommendations of the report of the 14th Finance Commission in which the Center awards a grant of Rs 2.87 lakh crore to state governments, of which Rs 87,144 crore are for municipalities.
But Delhi does not receive a share from this fund because it is a Union territory, said a senior official at the North Delhi Municipal Corporation.
A senior East DMC official explained that the Delhi government releases funds to civic bodies under the Basic Tax Allocation (BTA), which is meant to pay salaries. According to him, the Delhi government still had to pay the BTA funds for the second quarter. The official said that while the eastern civic body has only Rs 94 crore out of the total Rs 961 crore, the northern corporation has only Rs 212 crore out of the total allocation of Rs 850 crore.
Experts said that what has made the situation worse this year is the fact that the government has cut the BTA component by 57% due to a drop in revenue collection due to the Covid-19 pandemic.
Kejriwal also said Tuesday that the three corporations owe the government Rs 3,800 crore in the form of a loan.
The corporations said that corporations in the East and North had to borrow to optimize their operation after the trifurcation in 2012.
Former Delhi Chief Secretary Rakesh Mehta, who was also the commissioner of the unified MCD from 2002 to 2007, said: “The Center has never directly paid for the functioning of civic bodies in the past. He used to fund various schemes like education, health, etc. But that fund used to come through the Delhi government. “
The return of funds until 2019 was based on the recommendations of the Delhi 3rd Finance Commission (DFC), which had no provision for a trifurcated municipal corporation. While municipalities are demanding implementation of the 4th DFC recommendations, a government spokesman said it could only be done after the Center increases Delhi’s share of the central tax group.
Calling the current crisis unfortunate and avoidable, Mehra said: “It is unfair that corporations have been funded for a long time under the 3rd DFC. The allocation of funds to corporations must be reviewed and revised every five years, since the cost of providing municipal services increases due to inflation and the increase in the material rate ”.
He also said that corporations must do their bit to increase their income. “Municipal corporations also have to think about modernizing the revenue model to boost collection. They have to find new sources of income and increase taxes on services. For example, in areas where the Metro network exists, property tax rates must be increased. “
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