South Delhi Municipal Corporation (SDMC) Mayor Narendra Chawla on Thursday wrote to Chief Minister Arvind Kejriwal, asking him to review the new principle which governs distribution of the share of tax collected between local bodies as recommended by the Fifth Delhi Finance Commission (DFC).
The Mayor said the implementation of the new policy would result in a reduction of up to ₹1,300 crore per year in the SDMC’s share of grant-in-aid.
Apart from this, Mr. Chawla stated that the clubbing of funds earlier distributed under ‘plan’ and ‘non-plan’ heads, as suggested by the fifth DFC will mean the funds received by the corporation would be limited to 39.19% of the 3% of the net tax collection.
Mr. Chawal said, “As per the third DFC’s recommendations on devolution of funds to urban local bodies, the SDMC had been in receipt of 45.44% share of tax assignment out of the funds apportioned to the local bodies.”
In a statement, the South Corporation Mayor said that if implemented, it was imminent that the corporation would have a fund crunch and would face bottlenecks in implementation of welfare and developmental schemes.