Delhi NCT suffers as BJP controlled MCD and AAP Govt trade charges over funds  

The inability of MCD to pay salary to the employees, mainly doctors, nurses, civic employees including sanitation workers and pensioners during the pandemic have been particularly troubling. Around 1.5 lakh MCD employees have often been on strike, bringing the municipal administration in the National Capital Territory (NCT) to a halt.

Keeping the city clean is one of the foremost tasks of municipal administrations but Delhi is ranked at the bottom in Swachh Survekshan, 2020 survey. The East Delhi Municipal Corporation is ranked 46 among 47 local bodies surveyedin the category of cities with a population of over 10 lakh. The other civic bodies in Delhi, South and North, were ranked at 31 and 43 respectively.

The clandestine ways in which the MCDs in Delhi sought to increase taxes this year during the pandemic also left a poor taste in the mouth. Massive popular protests against the new tax regime, that included introduction of professional tax, increase in the rates of electricity tax and property transfer duty finally stalled the move.

The MCDs in Delhi, controlled by the BJP, have been perpetually complaining of being in financial distress. According to this narrative, MCDs are starved of funds, pauperized and hence unable to function efficiently. But there are reasons to believe this narrative to be more political in nature and triggered partly by rampant corruption.

The internal audit reports of MCD, for example, pointed out for the year 2016-17, financial irregularities worth Rs.3299 Crores in North MCD alone. The outstanding arrears in property tax in South MCD amount to Rs 1177 Crores but there is no political will for its recovery.

What is more, the Urban Development Department, GNCTD claims that as on 1st April 2020, a total of Rs 6008 Crore was outstanding from the three MCDs to the GNCTD. This included Rs 1977 Crore as arrears from EDMC, Rs. 3243 Crore from NDMC and Rs. 788 Crore from SDMC. Even the Audit Report 1 of the CAG noted the large amount of unpaid loans that are due to be returned by the MCD to Delhi govt. Furthermore, the three MCDs also owe Rs. 2596.32 crore in arrears to the Delhi Jal Board.

The constant bickering between BJP led MCD and AAP led Delhi govt. has been over “who owes what to whom?” The Union and the Govt. of NCT of Delhi have been at loggerheads over distribution of share in central taxes, basic grants and performance grants to local bodies.The tragedy has been aggravated by non-judicious management of available resources.

The budget of NCT of Delhi rose from Rs. 8793 Crore in 2001-02 to Rs. 41129 Crore in 2015-16 but the share of NCT Delhi in central taxes remained frozen at Rs. 325 Crores since 2001-02 even as there has been substantial increase in tax devolution structures in neighbouring states like Haryana and Punjab.

Delhi is treated in a step-motherly fashion because of its complex relationship with the Union. Article 280 of the Constitution vests the Finance Commission with the power to give its recommendations on distribution of tax revenues between the Union and the States and amongst the States themselves.

But while Delhi not being accorded the status of a full state is deprived of its legitimate share from the Finance Commission on one hand but on the other hand it has been allowed to participate in the GST regime just like a state. This anomaly has resulted in greater fiscal deficit in municipal administration.

The Grant-in-aid of Rs.2,87,436 was allocated by the Union Government for local bodies for the period 2015- 2020 but Delhi received no financial share from the Centre’s basket. Delhi with its population of 30 million in 2020 (including Ghaziabad, Faridabad, Gurgaon and Noida) would otherwise be eligible for grants @ Rs. 488 per capita per annum.

In the 14thCentral Finance Commission’s estimates, NCT of Delhi is eligible to receive a total of Rs. 25391Crore as share in central taxes in addition to the basic and performance grants to local bodies between the years 2015-16 and 2019-20. Non-receipt of this amount in turn has adversely affected the development capacity of Delhi to implement welfare oriented projects and schemes.

Though there is a separate Consolidated Fund to meet financial transactions of the govt, the diktat is that all developmental, welfare and conventional expenses are to be met through generation of own resources by GNCTD. The budgetary needs of GNCTD are largely fulfilled through VAT, Excise and Stamp duty. The proceeds from land and loan from financial institutions other than national Small Saving Fund is proscribed.

The tussle between the Centre and Delhi can be settled only through the grant of full statehood to Delhi is what many believe is the answer.