Delhi: North MCD’s liabilities more than its latest budget
The North Delhi Municipal Corporation has more liabilities that its total budget for the next financial year, commissioner Sanjay Goel said on Thursday while presenting the budgetary proposals -- the last ahead of a crucial municipal election next year.
“The corporation has been facing a serious financial crisis ever the MCD was trifurcated [in 2012] and the negative financial outlook has worsened due to Covid-19 pandemic. We are unable to clear our dues. We are unable to pay salaries to our employees, and facing court cases due to non-payment to contractors,” Goel said.
The three civic bodies in Delhi administer almost an equal area, and offer almost a similar range of services as the state government. However, they have been in a financial mess ever since the MCD was trifurcated, and have struggled to implement new projects and pay salaries to their staff leading to strikes. In the build-up to the 2022 municipal elections, the BJP, which has been ruling the three civic bodies for the past 15 years, has come under severe attack from the opposition which has blamed the crisis on the mismanagement and rampant corruption in the civic bodies.
Goel said the liabilities of the corporation have gone over ₹8,800 crore, compared to last year’s ₹7,524 crore. In view of this, the expenditure proposals in the 2022-23 budget have gone down to ₹5,808 crore -- a 20.6% reduction compared to ₹7,321 crore budget proposed for the ongoing financial year 2021-22, show budget documents.
“There is no other option but to cut down expenses and increase sources of revenue,” the commissioner said.
For the next financial year, allocations have been cut across all heads. For example, the allocation for general administration has gone down by ₹531 crore compared to the last budget. The sanitation department has been given ₹299 crore less than last year. However, health, education and engineering departments have recorded an increase in their allocations.
Goel said the current financial years has been particularly challenging as revenue dried up because of Covid pandemic, and the government cut more than 20% of basic tax share of the corporation. “The Delhi government had made a provision of ₹764 crore in North MCD’s tax share for the ongoing financial year, which was already ₹100 crore less than last year. Moreover, this amount was further cut down to ₹619 crore in the middle of the year. Even then, only ₹484 crore have been released so far,” Goel said.
Despite mounting financial troubles, the executive wing (councillors) of North MCD has refrained from proposing any increase in property taxes.
The commissioner has not proposed any tax hike this year, but he urged the standing committee to consider a “nominal” 2% increase in property tax and reduction in the rebate for paying tax early from the current 15% to 10%.
Though no new projects were announced in the budget, the civic body said that it will expand the existing schemes such as the dog park and parking projects on PPP mode.
Goel said that the garbage collection in the remaining three zones will handed over to private concessionaires after which all six zones will be managed by private companies.
Jogi Ram Jain, chairman of the standing committee said that the suggestion of 2% hike in property tax will not be accepted.
“The commissioner has officially stated that the allocation from Delhi government has gone down. Besides taking our rightful share from the government, we are committed to increase the number of properties which pay tax. Of the total 12 lakh houses, only 4-4.5 lakh currently pay property tax,” he added.
Leader of the opposition and AAP councillor Vikas Goyal said the budget reflects the mismanagement and corruption of BJP-ruled corporation. “The overall budget has shrunk compared to the last year. The allocation for sanitation has been reduced despite the poor ranking in swachh rankings. There are no new projects in the budget,” Goyal said.