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Thursday, March 04, 2021

Behind Delhi workers’ salary delay: MCD structure, 2 parties at loggerheads

The fight between the Delhi government and MCDs, in court and outside, is not new — MCD employees have approached the court over non-payment of salaries in 2018, 2019 and 2020.

Written by Mallica Joshi , Abhinav Rajput | New Delhi |
Updated: January 23, 2021 12:41:02 pm
Garbage piled up in New Delhi as civic workers continued their strike (Express Photo: Prem Nath Pandey)

Trifurcation dating back a decade, polls slated for next year and the BJP and AAP vying for control — these are some of the key reasons why Delhi’s municipal workers are facing salary delays, and why filth has accumulated on the city’s roads over the past weeks.

With hundreds of MCD employees going without salaries and former employees without pension, the Delhi High Court Thursday noted that their grievances had been reduced to a “political slugfest”, and expressed “disgust” with the Delhi government and the corporations. It also ordered the Delhi government to pay any amount deducted or adjusted by it during the pandemic from funds to be released to the corporations, within two weeks.

The fight between the Delhi government and MCDs, in court and outside, is not new — MCD employees have approached the court over non-payment of salaries in 2018, 2019 and 2020.

The 2012 trifurcation

Trifurcation of the erstwhile Municipal Corporation of Delhi in 2012 was done to “decentralise” the large local body. However, senior officials say, it was also an attempt to fix political boundaries in such a way that the then Congress government in Delhi would be able to make inroads into the civic body which had become a BJP bastion.

After the trifurcation, the North and South Delhi Municipal Corporations were given 104 wards each, while the East MCD had 64, mostly in the trans-Yamuna area. Due to Delhi’s demography, the South body ended up with the most “posh” colonies — the A and B category taxation zones that paid higher property taxes. The North, on the other hand, got more unauthorised and lower taxation category colonies, which pay less tax, or not at all.

The split created a structure in which the South ended up earning around 30% of its internal revenue through property tax. For the North corporation, the share of internal revenue through property tax was around 15%, while for the East body, this figure was even lower at around 9%.

Cows feed on garbage in New Delhi (Express Photo: Prem Nath Pandey)

The Covid crisis

Because of the pandemic, both Delhi government and MCDs have suffered in terms of internal revenue collection. According to Delhi government officials, its revenue is at least 40% lower than what it was last year. Corporations too have seen a more than 50% shortage in collection from advertising revenues, toll tax, health trade license and other sources of revenue.

The corporations earn the highest amount from property tax collections which too has been affected, with South MCD collection being 20% less while the figure stands at 40% for East and North, senior officials said.

In the city, several roles — sometimes referred to as cradle to grave — are fulfilled by corporations. Birth and death certificates, primary education (along with Delhi government), healthcare, maintenance of smaller roads, property tax, cleaning of roads, garbage disposal etc fall under their purview. But with a fall in revenue and amid a tussle with the Delhi government, officials say corporations are finding it hard to perform all their duties.

The politics

The tussle between AAP, which heads the state, and BJP, which heads the three MCDs, has meant there is little room for cooperation. The funding structure for corporations has remained the same for decades, but Sheila Dikshit’s Congress government did not have a confrontational relationship with the Centre or the corporations, which have been ruled by BJP for the past 14 years.

The AAP, which wants to wrest control of the three civic bodies next year, has alleged corruption and financial irregularities in MCDs, which it says is the reason for the financial crunch. The BJP maintains the Delhi government is withholding funds it is bound to pay the three MCDs, which is why salaries have been delayed.

Delhi, being a Union Territory with special powers, has a unique administrative structure where civic bodies do not come under direct control of the state government, but rather under the Centre. The Centre’s grants to municipal bodies come under specific grants for projects, while Delhi government is supposed to pay a certain amount to the MCDs.

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The state of play

According to a sanction order of Delhi government’s department of urban development, from Wednesday, the corporations were owed around Rs 1,200 crore as per revised estimates with a 42% revenue decline under the basic tax assignment. Of this, Rs 862 crore had been released until December.

The Delhi government told the Delhi High Court that a sanction order was passed on Wednesday for release of Rs 337 crore to the MCDs and other local bodies for January-March 2021.

MCD officials say their calculations under the 3rd Financial Commission shows that between 2012 and 2016, Delhi government had to pay South MCD Rs 428 crore; the North was owed Rs 539 crore; while East had no due.

Similarly, the figures given by the three MCDs state that under 5th Finance Commission recommendations between 2016 and 2021, South is owed Rs 1,901 crore; East is owed Rs 1,624; and North is owed Rs 1,087 crore.

In a letter to the three MCD mayors in October, Sisodia had said, “It is clear that no major amount is due from Delhi government, and any figure the Mayors of MCDs are demanding is fictional and an attempt to divert the attention of public from the deep financial mismanagement and corruption inside the MCDs.”

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