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Senior civic officials said that the Municipal Corporation of Delhi’s (MCD’s) financial crisis has worsened, with its liabilities rising to ₹16,226.5 crore, from over ₹14,000 crore in February, as it grapples with an annual budget expenditure of ₹17,000 crore. The civic body flagged the problems in a recent review meeting with Delhi chief minister Rekha Gupta, seeking assistance from the Delhi government, officials said.
The financial crunch impacting waste management in the city was also flagged by MCD commissioner Ashwani Kumar in a Standing Committee meeting held on August 21. (HT Archive)
These liabilities include the money it owes to employees in pension benefits, payments to contractors, loans, as well as the amount owed to the concessionaires managing the collection of waste in the national capital.
Mayor Raja Iqbal Singh said that the financial challenges and resources needed to improve the sanitation situation were discussed in the meeting. “CM has assured us that money shortage will not be an issue and all resources will be provided to improve the sanitation in the city. Both MCD and Delhi government are led by BJP and all issues will be resolved in cooperation.”
According to the MCD data, the corporation currently owes ₹3,605 crore in employee retirements benefits and arrears, ₹1213.8 crore to contractors, ₹51.9 crore for dumpsite remediation/biomining projects, ₹460 crore to concessionaires for collection and transportation of municipal waste, ₹7541.11 crore to the Delhi government, taken as loan, and ₹3,353.37 crore “internal loan”, which refers to a form of borrowing from itself and its employees, such as from provident fund and escrow accounts, which, ideally, should not be used.
Increasing liabilities are also impacting the upkeep of the city.
In February, while presenting the annual budget proposals, the MCD commissioner said that the corporation had liabilities of more than ₹14,000 crore. Dues towards employees have risen from ₹2,751.7 crore to ₹3,605.8 crore, to contractors from ₹1,079.5 crore to ₹1,213.88 crore, and internal loans are also up from ₹2746.88 crore to ₹3,353.37 crore. The loan component from the Delhi government remains constant.
The financial crunch impacting waste management in the city was also flagged by MCD commissioner Ashwani Kumar in a Standing Committee meeting held on August 21. Kumar had flagged that “lack of funds” was acting as an obstacle. “If we pay ₹70 crore against their demand of ₹90 crore, the concessionaires won’t work,” he had said while the committee chair demanded more penalties be imposed on the companies.
Assistance
The corporation has made several proposals and requests to get relief from the financial strain and improve its coffers, including the reduction of collection charges on transfer duty levied by the Delhi government, from 3% to 0.25%, for an increased MCD share.
The transfer duty is a fee collected on immovable property transactions, such as the sale and purchase of properties. Besides the property tax, this constitutes a major revenue stream for the corporation.
Other assistance sought from the Delhi government includes expediting the pending payment of ₹427.69 crore under the third Delhi Finance Commission, early release of quarterly grants under the State Budget, inclusion of schemes, such as hiring private companies for property tax survey, and serving notices under central assistance scheme– SASCI Special Assistance for states for capital investment.
An MCD official said that the corporation is also increasing its internal revenue sources, such as property tax, through an amnesty scheme and innovations.
“Around ₹1,980 crore have been collected in property tax so far which is an 18% increase from collection of ₹1,678 crore in the corresponding period. The number of taxpayers has also increased due to the amnesty scheme. We have floated a request for proposal seeking private companies who will carry out house tax survey and serve notices. This is likely to significantly increase the tax net,” the official said.
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