Trifurcation goes wrong, demand for MCD merger grows

All it took was less than 36 months to question the sanctity of the move to trifurcate the Municipal Corporation of Delhi (MCD). The decision to split the MCD, taken in 2012, has proved to be an utter disaster with two of the three corporations being in the red and left with not enough funds even to pay salaries to its employees.

The trifurcation of MCD (into South, East and North Corporations) was described as an ‘astute political move’ by the then Congress government to make inroads into the MCD, but now councillors say it was not at all in the public interest. They, as well as officials of the civic agencies, are now clamouring for reunification of the three corporations to extricate them from their financial troubles.  “The trifurcation was an illogical move because the number of zones under the three civic agencies remained the same as they were under the unified MCD – 12. Instead of the trifurcation of the unified MCD, the city government should have increased the number of zones for greater division of labour,” says a senior official with North Corporation requesting anonymity.

Experts say that the trifurcation has led to increase in the expenditure for carrying out development work, but the delivery of services has not improved. Budget allocation of Rs 6,624 crore was made in 2011-12 for the unified MCD, and now the combined budget of the three corporations is over Rs 10,000 crore, adds the official. “The expenditure has risen by nearly Rs 4,000 crore but the revenue has not increased,” he adds. Under-performance of the civic agencies is one of the main causes for their present predicament, but there is no denying the fact that lack of funds from the city government has turned the situation from bad to worse.

At the time of trifurcation, the Delhi government had promised financial aid to civic agencies. But so far, it has only released Rs 326 crore — that too in the form of a loan with an 18 per cent interest. “We end up paying Rs 80 crore to Rs 90 crore as interest,” says an official with North Corporation. The Delhi government has not given funds to corporations for a long time. “Last year, the Delhi government promised to pay Rs 620 crore under the education sector to North Corporation, but later reduced it to Rs 450 crore. So, the allocation reduced by over Rs 150 crore,” he adds. “We were supposed to get Rs 302 crore as a share from taxes, but we haven’t got this amount,” he says.

The Delhi government departments are also giving civic bodies a hard time by conveniently evading property tax. In total, they owe Rs 86.91 crore as property tax and service charge to North Corporation, according to official figures. Property tax is the main source of revenue for civic agencies. It comprises parking charges, advertisements and licencing fee. While the North and East Corporations are pressed for cash, its South Delhi counterpart is self-sufficient in managing its financial health. The North Corporation has sought a Rs 100 crore-loan from the South Corporation as well.

Some officials argue that the civic agencies should first put their house in order before laying the blame entirely on the Delhi government for paucity of funds. Not only have they been unable to bring more properties under the tax net, but they have even failed to generate revenue from advertisements, licencing, renting out banquet halls and community centres for social functions. There are over 10 lakh properties under the limits of the North Delhi Municipal Corporation, of which only 3.5 lakh property owners pay the tax, says a senior official with the civic agency.

Property tax issue
The East Corporation manages to earn property tax from 2.8 lakh properties out of 4.5 lakh properties in its areas. In their defence, the civic agencies claim they also provide services like sanitation, education and health which do not serve as sources of revenue generation. “The corporations are left with limited sources of income as the Delhi government has taken over roads (over 60 feet wide), slum department, rural development, development of unauthorised colonies, Delhi Jal Board and fire department,” says the official.

Civic agencies demand that some of these responsibilities which were taken away by the Delhi government be given back to them and also the latter should give grants in aid to carry out these functions. Chairman of South Delhi Municipal Corporation Subhash Arya says, “These functions belong to the civic agencies according to the 74th Amendment that strengthens local governance in the country.”

Arya points out that transfer of services as a result of the trifurcation has weakened the corporations financially. “Now there is a new government in city. It should work to strengthen the corporations by giving them back the responsibilities which form their core functions,” adds Arya. He considers reunification of the civic agencies as the only way out.

Citing that the city government itself is short of funds, Chief Minister Arvind Kejriwal has asked the civic agencies to seek funds from the Centre. This has irked councillors of all the three corporations. “When we had gone to meet the CM, he told us that we should ask our party for funds. We told him (Kejriwal) that we have come to the CM as the leaders of civic agencies for financial aid. You should act like a CM and not like a member of a party,” says Leader of House in East Delhi Municipal Corporation Ram Narayan Dubey. “How are we supposed to carry out our obligatory functions without being able to pay the employees,” he adds.