A day after leading a crucial meeting seeking immediate financial aid from the administration, mayor Harpreet Kaur Babla wrote a letter to UT administrator Gulab Chand Kataria urging allocation of grant-in-aid to the fund-starved municipal corporation as per suggestions of the 3rd Delhi Finance Commission (DFC) until the adoption of 4th DFC recommendations.
In August 2014, the 4th Delhi Finance Commission had made several recommendations based on the provisions of Section 84-A of the Punjab Municipal Act, 1976, as extended to Chandigarh. Although not legally binding, the recommendations were requested by the UT administration to strengthen MC’s finances.
The commission had suggested that certain revenues generated by UT be redirected to MC, including 30% of proceeds from Value Added Tax (VAT) and local excise duties, 100% of collections from Motor Vehicle Tax and motor vehicle registration charges, 25% of tax collected on the sale, purchase or consignment of goods, and 100% of service tax collections and stamp duties listed in the Union List.
But even 10 years later, the Chandigarh administration has yet to implement the 4th DFC recommendations while allocating annual grant-in-aid to MC, its primary source of income, leaving it perpetually in fiscal crisis.
In her letter, Babla said, “The recommendations of the 4th DFC, in respect of MC, were made in August 2014 and the General House had adopted it and requested the Chandigarh administration to accept the report. Since then, the civic body is continuously sending the references to the administration for implementation of recommendations, but the matter is pending between the administration and Union ministry of home affairs.”
{{/usCountry}}In her letter, Babla said, “The recommendations of the 4th DFC, in respect of MC, were made in August 2014 and the General House had adopted it and requested the Chandigarh administration to accept the report. Since then, the civic body is continuously sending the references to the administration for implementation of recommendations, but the matter is pending between the administration and Union ministry of home affairs.”
{{/usCountry}}The mayor added that since the recommendations had not been accepted, it was considered fair and appropriate if the devolution of funds to the corporation were arranged as per recommendations of the 3rd DFC (in the interim).
Babla further highlighted that MC was passing through very difficult times and was not in a position to even meet its committed liabilities. “As such, it is humbly requested that the matter may be raised at the appropriate level for release of grant-in-aid as per recommendations of 3rd DFC as a stopgap arrangement, till recommendations of the 4th DFC are accepted or a new finance commission is constituted in favour of MC,” she concluded.