Delhi government to allot 12.5 per cent of total tax collection to MCDs

New Delhi


The Delhi government on Thursday said that it will accept most of the recommendations of the Fifth Delhi Finance Commission and will provide 12.5 per cent of its total tax collection to municipal corporations in the city.

Presenting the Delhi government's action taken report on the Fifth DFC in the Delhi Assembly, Urban Development minister Satyendar Jain informed the House that earlier the figure was 10.5 per cent, as per the Third DFC recommendations.

The 12.5 per cent of the net tax collection, to be transferred to the local bodies, will be divided into two parts of six per cent and 6.5 per cent, Jain said.

The 6.5 per cent will be devolved to the local bodies through budgetary provisions of different departments, including health and education, Jain said.

The rest six per cent will further be divided into two parts of three per cent each.

"The East and North MCD will receive 65 per cent and 35 per cent, respectively divided from one part, while the other three per cent will be kept for all the other local bodies, including the New Delhi Municipal Corporation and the Delhi Cantonment Board," Jain said.

The House adopted the Fifth DFC, which made 171 recommendations.

"Out of 171, 88 were accepted by the Delhi government while 21 related with devolution of funds were accepted with amendments. Thirteen were left for the local bodies to decide while 17 were referred to a committee, and 29 were rejected. Three of the recommendations were already implemented," Jain said.

The date for implementation of the 5th DFC will be April 1, 2016, he said.

Meanwhile, Leader of Opposition Vijender Gupta said the Delhi government has "played a big fraud" with its "apparent acceptance" of the fifth DFC.

"It is a conspiracy to starve the MCDs of fund so that their functioning is totally paralysed. It (Delhi government) has rejected as many as 29 recommendations which were favourable to local bodies and could have turned around the finances of the local bodies," Gupta said.

He said instead of providing relief to local bodies, it will aggravate their financial crises.

Presenting the action taken report of the Delhi government on the Fourth DFC, Jain said the Delhi government was unable to implement the Fourth DFC, as the Central government rejected it.

"It was said by the Fourth DFC that the Delhi government will accept the recommendations only after the Centre accepted those for it, but they rejected it," he said.

The time period of the fourth DFC already lapsed on March 31, 2016.

However, Jain said the Delhi government has already released more funds to municipal corporations ranging from 14 per cent to 17 per cent than what has been recommended by the fourth DFC.