Quoting the financial estimates given by the Delhi Government for 2012-13, the Fourth Delhi Finance Commission report on the financial health of three municipal corporations in the national Capital has clearly stated that the Delhi Government has enough funds to finance the municipalities and support them.
“In the absence of transparency regarding grants received by the Delhi Government from the Centre, duly assigned for municipal corporations under Right to Education, Sarv Siksha Abhiyan, Mid Day meal etc, it has been assumed that the 100 per cent of the eligible expenditure for providing education by municipal corporations/ NDMC should be met by grants in aid from GNCTD, “ the report said.
According to report, the Delhi Government appeared to be standing in between the Centre that the civic bodies in the matter of release of Central grants that instead of being passed on to the municipalities were being subsumed as a part of the general revenues of the Delhi Government.
In its annexure report, the commission said it seems that increase in tax revenue was more than the increase in the share of municipalities as suggested by the earlier commissions. “In this case what is required is that the system of devolution of funds from the GNCTD should be more transparent and all the details should be provided to municipalities regarding how the amount has been arrived at by the accounts, before releasing the amount to the municipalities.”
The report said the Government while giving loans to the municipalities should follow the statutory provisions regulating the powers of the municipalities to borrow funds from the Consolidated Fund of the Capital. It said the transfer payments should not be allowed to be used for making payment of salaries and wages of any kind.
“The municipalities should be encouraged to establish special funds to ensure that the municipal activities for which are proposed get fair provisions and the amounts credited therein are not used for other purposes.”
Expressing serious concern over the way recommendations of the successive Finance Commissions were being modified or rejected, the report said the recommendations of the first Finance Commission to transfer 9.5 per cent of the basic annual fiscal of the city Government’s tax revenue had been modified to 5.5 per cent of the proceeds of the tax revenue and annual grant had been limited to 60 per cent of the actual expenses with a ceiling of 4 per cent of the tax revenue.
It said, “We have not been able to understand the logic for making these changes while implementing the recommendations of the first Delhi Finance Commission particularly when the Central Government guidelines on the subject require the State Governments to develop a convention of accepting the recommendations of the State Finance Commission just in the case of the recommendations of the Central Finance Commissions.”
The report emphasised that the director of local Bodies instead of taking over the control of fixed and movable assets and acting as per the principles recommended by the Commission in its interim report on March 31, 2012, appeared to have acquiesced with a situation where the municipal officers of the municipal corporations continued to deal with the assets of the corporation in the manner as were decided by the committee of demised corporation.
It said, “Till this date we have not been supplied details of assets and liabilities of the Municipal Corporation of Delhi. We are equally amazed to learn that the newly established corporations, without understanding full implications of the Government dispensed freebies in the nature of granting loans to each of them in utter disregard to the provisions of section 185 of the Delhi Municipal Corporation Act, 1957, have jumped to borrow funds from the Government and unwittingly accepted a dangerous worm in their internal sources of income which will spread its tentacles in years to come.”
The report said the Commission did not get any cooperation from the Government in its effort to collect reliable information.
“This Commission notices that the Government officials continue to resist Commission’s efforts to open doors for discussions for obtaining information/data. Although the Delhi Finance Commission is clothed with the powers of a civil court for summoning anyone as a witness, whenever these
powers have been attempted to be invoked, official reaction at the highest bureaucratic level was heavily tilted in favour of the officials,” it said.