Govt may not go by FinCom report

Differences over funding civic bodies

The recommendations of the Fourth Delhi Finance Commission for improving finances of the municipal corporations are unlikely to be accepted in toto by the Delhi government which wants a cut in the allocations made to the local bodies by the panel.

Though the commission’s report is yet to be tabled in the Delhi Assembly, officials of the Delhi government have started the process of preparing notes for the cabinet on the report.

Some officials have expressed reservations over the commission’s proposal to hand over to corporations the entire revenue collected under the heads of road tax and entertainment tax. At present, these two taxes are collected and retained by the Delhi government.

A senior official has observed that the Delhi government cannot accept all the recommendations of the Finance Commission Report, headed by former chief secretary P S Bhatnagar, as its own finances are tight due to last year’s revenue collection shortfall.
“Some provisions in the report suggest a higher financial support for East Corporation as it has failed to generate sufficient revenue,” said an official.

There is a view among Delhi government officials that the East Corporation’s inefficiency in exploring new revenue resources should not be “rewarded” by increasing its grant or financial support from the state government beyond its existing share, said an official.

Similarly, the South Corporation which has achieved its revenue target should not be punished and slapped with a cut in grant, he said. “The Fourth Finance Commission’s report is likely to be brought before the Assembly in the Budget session later this month,” said an official.

The state finance commission, which is formed under Article 243 (Y) of the Constitution is aimed at improving the financial health of the municipal bodies so that they can efficiently perform their statutory duties of providing sanitation, health and primary education services, among others.

The Fourth Delhi Finance Commission has recommended a bigger share to municipal corporations from the taxes and revenue collected under the consolidated fund, said an official. “The new report also talks of enhancing the financial allocation to the civic agencies by Rs 500 crore each,” said an official.

The share given to municipal corporations from the consolidated fund of Delhi has been steadily rising over the years. In 2012-13, the allocation for the civic agencies was Rs 2,298 crore, in 2013-14 it rose to Rs 2,573 crore and in 2014-15 it touched Rs 2,741 crore.

The-cash strapped civic agencies have been witnessing frequent protests by sanitation and medical employees who have been demanding timely release of their monthly wages.
The municipal corporations, in turn, blame the Delhi government for delay in implementing the recommendations of the Fourth Delhi Finance Commission due to which there are recurring delays in payment of salaries.

The Fourth Delhi Finance Commission was constituted under section 3 of the Delhi Finance Commission Act, 1994 on October 14, 2009. The constitution of the Fifth Commission is long overdue but it cannot happen till the recommendations of the Fourth Commission are implemented.

Bhatnagar, a retired IAS officer, was the chief of the Fourth Commission while M P Mathur, professor and coordinator Fire(D)/JNNURM,  National Institute of Urban  Affairs, was a member and K S Wahi, IAS, was its member secretary.  

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