Time for Delhi to say enough is enough to mismanagement
crore. Clearly, the EDMC has done well on one front – spending the money it never had. But what explains this complete stagnation in revenues?
The MCDs have two main sources of revenue – “own revenues” they generate directly by levying taxes, fees or user charges, and “grants” they receive from external bodies, primarily the Delhi government.
First, let’s look at the grants. The EDMC received a grant of ₹270 crore from the Delhi government in 2012-13. In comparison, it received ₹702 crore (over three times) in 2015-16, and ₹605 in the first nine months of 2016-17. But, the overall revenues stagnated, pointing towards a dismal performance in shoring up its revenues – a result largely of inefficiency in tax administration and an unwillingness to take the political risk associated with increasing tax rates.
Let’s look at property tax. In Delhi, only 10% of property owners pay property taxes. To track down defaulters, the MCDs initiated a project to digitise property tax records in 2015. The project is progressing at a snail’s pace and only a third of the records have been digitized. Multiple proposals to hike property taxes have been rejected by EDMC councillors, fearing opposition from residents. The corporations are yet to act on the Delhi government’s proposal to implement property tax in unauthorised colonies.
The corporations have also the legal authority to introduce eight discretionary taxes such as professional tax, betterment tax, etc. However, they currently levy only two types of discretionary taxes. The corporations have been equally lethargic on various proposals to increase parking charges, or to impose user charges for garbage collection.
What makes the bad situation worse is that their finances of the corporations are shrouded in secrecy since they do not release quarterly or even annual detailed statements of income and expenditure. This prevents regular public scrutiny.
EDMC’s sanitation workers have clearly, and understandably, had it enough this time. But it’s the citizens of Delhi that need to say enough is enough to the deep financial mismanagement in MCDs, and demand far-reaching reforms that usher in accountability and financial transparency in the local governments of the national capital.
WHAT MAKES THE BAD SITUATION WORSE IS THAT THEIR FINANCES OF THE CORPORATIONS ARE SHROUDED IN SECRECY