After simmering for months, the war of words between the Delhi government and the three BJP-ruled Municipal Corporations culminated in a day-long dharna by the Mayors outside Chief Minister Arvind Kejriwal’s residence. At the core of the dispute between the elected government and the corporations are funds amounting to thousands of crores, which each is demanding from the other at the earliest. While Mayors were demanding dues, which have allegedly piled up to ₹23,000 crore in taxes or payments over several years, the Delhi government claims the corporations owe over ₹8,600 crore to it and should ask the Centre to disburse ₹12,000 crore, their Constitutional due. Both sides have dug in their heels, showing no inclination to relent, even as lakhs of employees, from doctors to sanitation workers, are struggling for livelihood.
Fund source
Apart from a grant from the Central government, which is routed to them through the Delhi government’s Urban Development Department, the civic bodies generate internal revenue through property tax, toll tax, parking charges, and taxes on advertisements among similar activities. They also get a share amounting to 12.5% of the taxes generated by the Delhi government as per the recommendations of the Fifth Delhi Finance Commission constituted to prescribe viable solutions related to the finances of local bodies such as the corporations.
Corporations’ claim
The corporations claim the Delhi government owes them ₹23,000 crore. The amount, they claim, has been arrived at by adding dues ranging from property tax which it has “never paid” for official buildings – including the Delhi Secretariat and offices from which different departments under the government operate among others – including interest compounded over “several years.” This also contains a share of taxes generated by the Delhi government, which it is supposed to share with the civic bodies over several years. The Delhi government has termed the amount “fictional.”
Delhi govt.’s counter
The Delhi government claims that it has, over the past many years, not only paid the civic bodies their due share of taxes, but also has paid a large sum as loan. According to Delhi Urban Development Department records, as on April 1, 2020, a loan totaling to ₹6,008 crore was outstanding over the three civic bodies. This, according to the Delhi government, includes ₹1,977 outstanding from the EDMC, ₹3,243 crore from the North body and ₹788 crore from the SDMC. The Delhi government also contends that the three civic bodies collectively owe ₹2596.32 crore in arrears to the Delhi Jal Board, which is administered by the elected government, towards water bills.
Dues as per civic bodies
According to the civic bodies, the East Delhi Municipal Corporation (EDMC) has received only ₹157.40 crore of the ₹1,677 crore due, the South Delhi Municipal Corporation (SDMC) got ₹472.39 crore out of ₹1134 crore and the North Delhi Municipal Corporation ₹612.02 crore of the ₹2090.52 crore due to it so far this year.
Amount disbursed
For the financial year 2020-21, as per the Fifth Delhi Finance Commission calculations, the Delhi government claims that a total of ₹1965.91 crore was due to the three civic bodies until October 26. Of this total amount, the Delhi government states, ₹1752.61 crore has been already paid to them while the rest is in the process of being disbursed.
Government’s solution
According to the Delhi government, the Central government has not paid the due amount to the corporations to the tune of ₹12,000 crore. It argues that the Centre provides grants to all the Municipal Corporations of the country based on their population. For every person residing in the city,₹488 per head is given as municipal development fund totalling to ₹2,87,636 crore to all cities across the country except the civic bodies in Delhi. The government argues that based on Delhi’s population, this amounts to a total of ₹12,000 crore over the last ten years and should be disbursed by the Centre to assist the civic bodies.
Civic bodies’ solution
According to the Municipal Corporations, Delhi’s Union Territory status does not entitle it to funds based on calculations similar to those for the grant of municipal development funds for other cities in the country. But the Centre provides enough financial assistance to them which is not routed to them by the Delhi government on time. On the other hand, the fact that Delhi is the National Capital Territory ensures significant expenditure on it by the Centre on various sectors ranging from public transportation to health among others. The civic bodies believe the elected government needs to disburse funds in a timely manner as well as be forthcoming in sharing taxes according to Fifth Delhi Finance Commission calculations apart from paying “past financial dues” related to the recommendations made by preceding finance commissions.