Delhi govt to release ₹2,000cr to tide over MCD’s salary crisis

The MCD has around 147,000 employees, and the civic body needs around ₹774 crore per month for salaries and pensions. However, the civic body’s coffers are in dire straits, and as on Tuesday, had only ₹70 crore in its accounts, an MCD official said on condition of anonymity

The Delhi government on Wednesday announced that it will release around ₹2,000 crore in funds as the last instalment of the Municipal Corporation of Delhi’s tax share as per the finance commission, in order to resolve the ongoing crisis over the disbursal of salaries to workers in the civic body.

Deputy chief minister Manish Sisodia, who also holds the finance portfolio, said the state government’s decision to release funds was taken at a meeting between senior municipal and finance ministry officials. (HT Photo)

Separately, the MCD on Wednesday said it has released ₹730 crore towards pending salary and pension dues.

Deputy chief minister Manish Sisodia, who also holds the finance portfolio, said the state government’s decision to release funds was taken at a meeting between senior municipal and finance ministry officials, and that by the end of this week, MCD employees should get salaries till the month of January.

“We reviewed all the tax collections by the MCD and issued guidelines on increasing the internal collections and the fourth instalment payment in February. In total, they will get ₹2000 crore while we will also improve their tax collection system,” he said.

Accusing the previous BJP-ruled civic body regime of not paying employees for months, Sisodia said, “Even though the BJP is running away from the mayoral elections, these funds have been released today to disburse the salaries of the MCD employees.”

The BJP hit back, saying that the funds released by the state were “wrongfully withheld”.

A senior MCD official said that the corporation is initially expected to receive funds worth ₹1,680 crore which will help the corporation to disburse salaries till the month of December. “This will be the first time that all the employees of erstwhile North, South and East MCD will be brought at parity levels. We hope to face no salary delays in this financial year,” the official said.

Meanwhile, the MCD in an official statement said it has released ₹730 crore towards pending salary and pension dues on Wednesday. “With this amount, the salary of all categories of employees and pension of retired employees of MCD has been released up to December 2022,” the statement said.

The MCD has around 147,000 employees, and the civic body needs around ₹774 crore per month for salaries and pensions. However, the civic body’s coffers are in dire straits, and as on Tuesday, had only ₹70 crore in its accounts, an MCD official said on condition of anonymity.

The salary of around 100,000 MCD employees has been pending for two to four months, and municipal teachers’ unions held protests last week to highlight the delay in the disbursement of their wages.

On Monday, the Delhi high court had ordered the MCD commissioner and senior government officials to appear in court on February 2 and explain the failure to disburse salaries and pensions to the employees of the civic body, which they termed “unfortunate”.

On Tuesday, the confederation of MCD employees’ unions wrote to Prime Minister Narendra Modi, urging him to provide a central financial package to resolve the MCD’s financial crunch.

Responding to Sisodia’s allegations, Delhi BJP spokesperson Praveen Shankar Kapoor said, “The Delhi government has not given grant or aid to MCD. The Arvind Kejriwal government has only fulfilled its constitutional obligation, and the funds have been released under court’s pressure and not as moral duty towards MCD employees.”

Budget presentation

MCD officials presented the municipal Budget for 2023-24 before Special Officer Ashwini Kumar -- the de-facto in-charge of the elected wing till the time that the mayoral polls are not held -- on Wednesday.

“No new taxes have been proposed and broadly the budget allocations are similar to what was moved by the municipal commissioner,” an official aware of the developments stated.

Officials said the passage of the Budget will depend on how the next House meeting, scheduled for February 6, is held and the Supreme Court directions in the next hearing scheduled on February 3 regarding the AAP plea on mayoral elections.