Kejri to set up new finance panel soon

Fourth Delhi Finance Commission is almost history, Fifth FinCom on its way

The Delhi government is likely to constitute the Fifth Delhi Finance Commission in the next few days to improve financial health of the civic agencies, sources said on Monday.

Deepak Virmani, a senior Delhi government official, has been identified as the member secretary for the Fifth Delhi Finance Commission which will soon start work, said a functionary in Chief Minister’s office.

The indication on the constitution of the new finance commission comes at a time when the BJP-run civic agencies are demanding the implementation of the report of the Fourth Delhi Finance Commission.

Sources said the Kejriwal government may table the much-delayed report of the fourth commission – whose original report was meant to be for five years between 2011and 16 – in the next Assembly session. But it may not accept its recommendations in toto.


“Once the report is tabled in the House, we shall present our reasons for not implementing it in totality. The city government’s assistance from the Centre has not been increased for years, how can we give more money to the municipalities,” said a government functionary.
 
 The government’s perceived reluctance to implement in toto the report of the Fourth Commission – headed by former chief secretary P S Bhatnagar – comes in the backdrop of a demand from the BJP-run civic agencies seeking enhanced financial support from the Kejriwal government.

South Delhi Municipal Corporation Mayor Subhash Arya on Monday said that the report of Fourth Commission is pending since 2013 and after its implementation, SDMC will have to be paid additional Rs 2,700 crore per annum, North Corporation will be paid an additional Rs 2,700 crore and East Corporation will have to be paid Rs 3,000 crore.

However, the Delhi government officials have expressed reservations over the fourth 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.

‘Cannot share revenue’
A senior official has observed that the Delhi government cannot accept all the recommendations of the finance commission report as its own finances are tight and its share in revenue collected by the central government from the city has not been revised over the years.

The fourth commission, formed under Article 243 (Y) of the Constitution, suggested measures for 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.

It also recommended steps for avoiding duplication of responsibilities between the state government and the municipalities, and improve accountability related to functions taken up by local bodies on behalf of the state government.

The Fourth Commission recommended a bigger share to municipal corporations from the taxes and revenue collected under the consolidated fund, 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 commission due to which there are recurring delays in payment of salaries.

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