Delhi government accepts fifth finance panel report, says more funds to MCDs
The Delhi government on Thursday accepted key recommendations of the Fifth Delhi Finance Commission (DFC), which, among other things, it says, would ensure more cash flow to the fund-starved municipal corporations.
The assembly adopted an action taken report tabled by urban development minister Satyendar Jain on the commission’s recommendations.
Accepting more than half of the DFC’s recommendations, the government said it would give 12.5% of its total tax collection to the city’s five civic bodies. This new format will be effective from April 1, 2016, which means employees of the civic agencies will get arrears too, the government said.
The minister said the tax share was currently 10.5% as per the third DFC’s recommendations. The hike would help the corporations, specially East Delhi Municipal Corporation (EDMC) and North Delhi Municipal Corporation (North MCD), to recover their deficits.
The EDMC has been asking for Rs 10,228 crore from the government and the North MCD Rs 1,531 crore as per the fourth DFC’s recommendations. Till now, municipal employees were being paid as per the third DFC.
The government’s move comes five days ahead of a hearing on the matter in the Dehi high court. The court had on December 20 told the AAP government that it was liable to pay the three corporations in accordance with the fourth commission’s recommendations.
In the House, Jain also tabled the government’s action taken report on the fourth DFC, which he said cannot be implemented as the Centre refused to accept a part of its recommendations.
“In any case, the government has released more funds to municipal corporations ranging from 14 to 17%, which we have decided not to recover from them. The Delhi government provided 17.6% of its budget to the MCDs in 2012-13, 16.11% in 2013-14, 15.34% in 2014-15, and 14.40% in 2015-16,” he said.
Presenting the fifth DFC report, the minister said the 12.5% tax collection share that will be transferred to the local bodies will be divided into two parts.
“Six per cent will be broken down into 3% each. Of this 3%, EDMC will receive 65% and 35% will go to the North MCD. The other 3% will be meant for all the local bodies, including the New Delhi Municipal Council and the Delhi Cantonment Board (DCB). The remaining 6.5% of the 12.5% will be devolved to the local bodies through budgetary provisions of different departments,” Jain said.
The report said DCB will be included in the commission for the first time.
Leader of Opposition Vijender Gupta, however, said the South Delhi Municipal Corporation’s share has been substantially reduced under the fifth DFC’s recommendations and would make it cash-strapped.
“The government misrepresented facts and figures in the Assembly. It said funds had been increased from 10.5% to 12.5%. The fact is funds have been reduced from 17 to 12.5%. It will cripple the local bodies,” he said, adding he would reveal details on Friday.
The House was informed that 171 recommendations were made by the fifth DFC, out of which 88 were accepted by the government. Twenty related to devolution of funds were accepted with amendments, 13 were sent to local bodies for acceptance, 17 were referred to committees and 29 were rejected.
The fourth DFC, which the Delhi cabinet decided not to implement, recommended the Delhi government’s control over local bodies, including the corporations and the Delhi Development Authority. Jain said the Centre refused to accept these points.