The Municipal Corporation of Delhi (MCD) has claimed that the bail out package by the Delhi government to the three newly-formed municipal corporations is nothing but "an eyewash".
Subhash Arya, leader of the House in the MCD, said the funds provided by the state government are not a grant but loan that will have to be repaid by the three corporations.
The Delhi government had provided a fund of R1,831 crore to the MCD. On an average, this would amount to each corporation paying R200 crore per year as interest to the government.
The government has also refused to help out the corporation in paying off their loans and liabilities worth R700 crore, he said.
"Even at the time of introducing of Unit Area Method of taxation in 2004, the Delhi government had promised they would pay us the losses that we would incur. But nothing has been done. To ensure all the corporations could run smoothly, they had promised to take care of all the liabilities. But instead they have given us a loan which will have to be repaid," said Arya.
According to the civic agency, both east and north Delhi municipal corporations are not in a condition to make any profit to begin with and such a financial burden will be detrimental to their smooth functioning.
Delhi government had announced a bailout package wherein North Delhi corporation was given Rs 790 crore, East Delhi corporation was given Rs 421 crore and Rs 600 was given to pay contractors.
As South Delhi Corporation had a surplus of Rs 359 crore, it was not given any financial assistance.
"We will bring out a proposal once all the three MCDs start functioning and we will not accept this loan. We insist that the government give us a grant so that there is no financial liability on any of the corporations," added Arya.