The Delhi government has decided to pump Rs. 5,326 crore into the Municipal Corporation of Delhi to ensure that the three newly created civic corporations begin functioning without any financial liabilities. Government officials said the MCD was required to use the funds in repaying loans, paying contractors and offsetting other liabilities.
The Sheila Dikshit cabinet, meeting for the first time since the MCD elections, decided to release the funds to help the corporation bridge the budget deficit.
The officials said the assistance included Rs. 1,724 crore of non-plan allocation and Rs. 1,771 crore of plan allocation. The remaining Rs. 1,831 crore will have to be used by the civic body to offset liabilities, including paying Rs. 600 crore to contractors who worked for the MCD during the Commonwealth Games. The MCD also has to pay back loans worth Rs. 700 crore to various government departments and financial institutions.
Chief minister Dikshit said the MCD had not practised prudence. “The increase in revenue has not been commensurate with the increase in expenditure, which is alarming. The three new corporations are now advised to ensure that resources are adequately tapped to increase the revenue,” Dikshit said.
The three new corporations — north Delhi, south Delhi and east Delhi — have to start functioning from May 1. The officials said the government wanted to ensure that the new corporations start functioning on a positive note. They added that the MCD had been advised to divide its annual budget in three parts.
“There is a need to for more efficiency in revenue collection. There is a need for fiscal and financial prudence too,” a senior official said.
Former works committee chairman Jagdish Mamgain praised the government for providing the financial assistance to the newly created municipal bodies, saying it will help restart development in the city.
“Payments can now be cleared. The contractors will come forward for new tenders and expedite development work. Also, pensions, which have been on hold for the past 10 months, may be cleared,” he said.
According to former mayor Rajni Abbi, the MCD owes contractors Rs. 1,000 crore and another Rs. 130 crore as pensions which will be cleared with the money.