Delhi Budget: Under AAP rule, MCD gets more money

Finance minister Atishi announced a ₹8,423 crore allocation for Municipal Corporation of Delhi, focusing on education, healthcare, and sanitation.

Finance minister Atishi, while presenting the budget proposal for 2024-25 on Monday, said that the government has allocated ₹8,423 crore to the civic body — an increase of ₹182 crore over the allocation of ₹8,241 crore of budget estimatemade last year. This is the second year in a row that the allocation for the Municipal Corporation of Delhi (MCD) has received a jump in terms of the budget estimate, when comparing announcements made by in the two budget speeches.

Delhi finance minister Atishi arrives at Vidhan Sabha to present the Budget in New Delhi on Monday. (Raj K Raj/HT Photo)

The minister said that “no state can make progress unless its local body is strong”. “Of this ( ₹8,423 crore), ₹3,153 crore will be for education, healthcare and sanitation... ₹2,955 crore will be given as Basic Tax Assignment (BTA) and ₹2,315 crore for stamp and registration charges and one-time parking fee,” she said.

Last year, the allocation for MCD recorded a massive jump of over ₹2,000 crore in comparison to 2022-23 — defying the trend of reduction in allocations for the three erstwhile municipal corporations over the last three years. The jump also took place following a restructuring of the civic agency — it was reunified as one — and the AAP’s sweep of the House in December 2022. The erstwhile south, north and east MCDs were unified in 2022.

The allocation to the linked funds for the implementation of schemes, programmes and projects under education, health and sanitation has been increased from ₹2,659 crore to ₹3,153 crore, while BTA allocation has increased from ₹2,492 crore to 2,955 crore. The share of allocation for stamp and registration, and one-time parking charges will go up from ₹2,240 crore to ₹2,315 crore.

The civic agency announces its own budget in which it details its revenues and expenditure.

HT reached out to mayor Shelly Oberoi who did not respond to queries seeking comments.

Leader of the Opposition in MCD and Bharatiya Janata Party (BJP) leader Raja Iqbal Singh, who is also the former North Delhi mayor, said that the AAP government was depriving the MCDs of legitimate funds in the past when it was led by the BJP and a marginal increase of ₹180 crore will not help tide over the resulting financial crisis.

“Salaries have not been paid for two months, there are arrears in terms of payments to contractors, employee benefits. The government needs to announce a large-scale package for MCD so that various projects and schemes can be implemented. In the last budget, they announced a loan of ₹850 crore being provided for help in the project to clear up the three landfill sites but these funds were never provided,” said Singh.

The issue of fund allocation between the Delhi government and the erstwhile MCDs has been a long-standing tussle with several protests and strikes being organised in the “cash-strapped” municipal bodies. Delhi government had reduced the budgetary allocation to the three erstwhile municipal bodies for three successive years — from ₹6,828 crore in 2020-21 to ₹6,172 crore in 2021-22 crore and ₹6,154 crore in 2022-23. The next two consecutive years have recorded an increase in funds.

The civic body gets funds from the state government in the form of three key streams — for schemes and projects, BTA share, and a portion of stamp registration and one-time parking charges. Grants and allocations from the state government form a significant chunk of revenue source for the corporation. MCD’s projected expenditure of ₹16,683.01 crore for 2024-25 states that more than ₹2,906 crore is expected to be derived from the global share of assigned taxes from the Delhi government alone.

A senior municipal official said that the allocation may help the civic body execute the long-pending projects but the non-formation of the standing committee has led to policy paralysis within the corporation.

“Many projects are ready to be awarded for execution but due to the non-formation of the standing committee, we are unable to initiate,” the official said. The 18-member standing committee controls the purse strings of MCD and its sanction is needed for all projects above ₹5 crore value. In the run-up to the municipal elections in 2022, cleaning Delhi has been the key promise made by AAP. This is the highest allocation for the corporation in recent years. The government had allocated ₹7,571 crore for the three MCDs in the 2017-18 budget; ₹6,903 crore in 2018-19; ₹6,380 crore in 2019-20; ₹6,828 crore in 2020-21, ₹6,172 crore in 2021-22; and ₹6,154 crore in 2022-23.