MCDs say liability has risen, govt says have doubled funds

NEWDELHI: The officials of the East and North Delhi Municipal Corporations, which are battling a financial crunch leading to repeated strikes by employees, say their salary liability has increased and the fund received from Delhi government, as per Third Delhi Finance Commission recommendation, is not enough to meet the requirement.

The Delhi government, however, maintains that the sanctioned funds under non-plan head (primarily meant for salary payment) has almost doubled.

Under the non-plan head, the three corporations are entitled to receive 10.5% of the money collected through taxes, duties, tolls among others from the state government. The grand-in-aid is divided in three parts: 5% as education expenditure, 4% for basic assignments and 1.5% for municipal reform funds.

In 2015-16, the amount disbursed under the non-plan head to the east corporation was ₹702.53 crore while in the current financial year, the state government has released ₹604.62 crore to date. In 2014-15, the total fund released under the head was ₹441.96 crore, according to government officials.

Similarly, the north corporation received ₹1,093.91 crore in 2016-17 and ₹1,206.91 crore in 2015-16, an increase from ₹ 848.47 crore in 2014-15.

North Corporation officials argue that they need more funds to meet the salary requirement due to the increasing liability. For the current financial year, the north MCD requires ₹232 crore per month. In 2015-16, the requirement was ₹199 and in 2014-15, the requirement was ₹188 crore per month to pay 57,000 employees and pensioners.

“We are not questioning the data provided by the Delhi government. In fact the existing government has not even deducted loan and interest on the amount received under non-plan head for the last two years. But our salary expenditure is increasing every year. It is not due to increase in workforce but other factors such as increasing dearness allowance (about 10% every year), pensions and miscellaneous expenses,” said Pankaj Singh, chief finance officer, north corporation.

However, the corporation fails to explain why they couldn’t foresee the problems after the trifurcation and raised the matter with the state government.

“After trifurcation we received ₹560 crore as loan from Delhi government and ₹300 crore from the leasing a portion of the Civic Centre. In 2013-14, also we received ₹250 crore as loan and ₹300 crore as lease money. The money was enough to establish the body and start the functioning of the system. But the then state government started deducting the principal amount (loan) and interest from the non-plan head and this started creating imbalance in our revenue sources,” said a senior north corporation official.

Likewise the East Delhi Municipal Corporation requires ₹1,608 crore to pay salaries for the current financial year (2016-17). The entire ₹605 crore released by Delhi government under nonplan head, officials said, has been used apart from the money from their own revenue sources.

Mayors and leaders of the three corporations will address a press conference on Thursday.