Tax share due in April not released yet, say Delhi civic bodies

Senior municipal functionaries blamed the Delhi government for the crisis, saying the AAP dispensation has not released the first quarter instalment of their basic tax assignment and global share of taxes as announced in the Delhi Budget

The East and North Delhi municipal corporations are struggling to clear salary dues for five and three months respectively even as a unified civic body will come into being from May 22.

Civic officials said the government has cited the ongoing unification process and the direct control of local body being transferred to the Centre as the reasons for not releasing the tax share. (Representative image/HT Archive)

Senior municipal functionaries, however, blamed the Delhi government for the crisis, saying the AAP dispensation has not released the first quarter instalment of their basic tax assignment and global share of taxes as announced in the Delhi Budget presented by deputy chief minister Manish Sisodia on March 26.

Civic officials said the government has cited the ongoing unification process and the direct control of local body being transferred to the Centre as the reasons for not releasing the tax share.

In the amended Act, the term ‘government’ has been replaced by the ‘central government’, undoing the 2012 amendment which had done the opposite.

A senior official from the finance department said that based on interactions with Delhi government officials, it seems that it is unlikely that any funds will be released to corporations now.

“We are being told the unification act clearly states that the government in DMC act will now mean the central government and since the Delhi government was not consulted in this process, and has no rights over the MCD then there should be no liability of providing funds either,” a civic official said requesting anonymity.

Delhi government spokespersons did not respond to requests for comment.

In its Budget for the current fiscal, the Delhi government allocated ₹6,154 crore for the three municipal corporations.

The announcement came 17 days after the state election commissioner cited a letter by the Centre that the three municipalities will be merged, and postponed the announcement of the schedule for elections to the corporations.

The Parliament passed the DMC (Amendment) Act, 2022 in April.

Shyam Sunder Aggarwal, the mayor of EDMC, said the first quarter of tax share was expected in the beginning of April and the delay makes the intention of the Delhi government clear.

“We should have received ₹373 crore in April. They are intentionally trying to harass the corporations and thousands of families of municipal employees who are now unable to run their houses. We have written letters to the CM and the LG but no progress has been made. this is unconstitutional,” east Delhi mayor said.

Former North MCD mayor Jai Prakash said the state government should have released the first instalment of the dues, ₹454 crore, in the first fortnight of April.

“The Delhi government has reduced the budget for corporations year after year and now they are not even releasing our legitimate tax share. This is an intended step to derail the unification process. These taxes such as electricity tax, transfer duty are being levied by Delhi government on corporation’s behalf. In the pre-1990s arrangement, the bodies like discoms, transportation utility, water utility were under a unified MCD. The global share of taxes for MCDs is a settled arrangement. If Delhi government refuses to provide our share, we should be allowed to directly levy these taxes,” he said.

The state government in the past has reiterated that no fund allocation is pending, and that the corporations are facing a financial crisis due to corruption and poor administration.

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