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MCD Trifurcation: A Failed Experiment, Or Is There Hope Yet?

03/01/2017 3:41 PM IST | Updated 09/01/2017 8:50 AM IST
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This is part 2 of a three-part series on Delhi's MCD trifurcation. Read part 1 here.

Local government matters tremendously in the daily lives of people. A former Municipal Corporation of Delhi (MCD) councillor and MLA I spoke to pointed out that the MCD plays the most important role: "The first thing you see outside the window in the morning is a person sweeping the roads."

"Now we have three commissioners, three mayors, three standing committees and the paraphernalia that is attached to all of them—three offices, three cars, all the stenographers..." Former mayor, unified MCD

Many of the people I interviewed researching trifurcation were of the view that it could have worked had it not been clouded by political interests. In practice, however, it has been hobbled by a lack of adequate resources. In this post I will try to highlight how no stake in the success of this experiment impacted the local government, as seen through funds, functions and functionaries.

Financial crunch

Two of the three new corporations faced a severe financial crunch post-trifurcation. A North MCD councillor elaborated, "North Corporation had a debt of ₹1000 crore per year due to its expenditures on salary maintaining other services being much higher than its earnings. In the same manner, the East Corporation also had a debt of about ₹500-600 crore per year. Only South was able to meet its expenses, but it's not making profits."

The sources of revenue generation are few and support from the Delhi government is lacking. The mayors of the three corporations jointly claimed that the Delhi government owed grants worth ₹1139 crore to the three corporations and ₹1322 crore worth of municipal reform funds. They criticised the Delhi government for not tabling the Fourth Delhi Finance Commission (DFC) report in the Assembly (it was finally tabled in December 2015, more than three years after trifurcation) and not financially helping the corporations while increasing the salaries of their MLAs by five times. Based on the Fourth DFC recommendation, the North MCD claimed ₹700 crore. The East MCD sought a grant of ₹800 crore for continuing developmental projects, maintaining the city and providing pensions. South MCD asked for ₹3150 crore for regularising the daily-wage employees.

Either prior to or post trifurcation, means of generating revenue through parking or advertisement fees or increase in property tax were not looked into. The councillors themselves reject proposals for any increase in taxes as it reduces their popularity. The North MCD budget of 2015-16 had proposed a 50% hike in base unit area value for property tax assessment and an increase in the lump sum one-time street charge on vehicles with an aim to improve its finances. However, all these proposals were rejected by the councillors.

There was poor division of assets and expenditures between the three MCDs. A former accountant of the unified MCD explained: "(a) all revenue sources have gone to south MCD, (b) poor areas came to north and east, (c) no A, B, C, D category properties (property categories that are taxable) in north and east, (d) in terms of expenditure, all hospitals and education related expenditure went to north, (e) slaughter houses went to east. Grants should have been given but there's a problem now between the state government and the MCD. The Finance Commission recommendations have not been followed."

The three corporations continue to remain bodies which have ill-defined functions. Their resources and expenditure continue to be mismanaged... Former Delhi government official

Grants have been reduced or are not given on time. The Fourth DFC recommended a bigger share to municipal corporations from the taxes and revenue collected under the consolidated fund. The financial allocation to the municipal councils was supposed to increase by ₹500 crore each. However, global share has been reduced and the recommendations of the Finance Commission have not been accepted and implemented—probably because the reports submitted by the Finance Commission propagate empowering of the local bodies by providing them more funds.

Another reason behind the financial crunch is that there was a common pool of resources at the time of the unified MCD. There were some well-paying areas and some areas that needed support from other funds as they weren't independent.

This situation is made worse by the drop in funding from the Delhi government. Senior Congress leader Ajay Maken was also reported as arguing that the AAP-led Delhi government was not providing adequate financial support to the three corporations. He had said that the total budget for the three MCDs in 2012-13 was ₹3128 crore but this had been lowered by at least ₹600 crore in 2015-16. This is not practical as the budget amount increases each year due to various expenditures. The Delhi government, however, has not kept up the allocations whereas it has increased its own budget from ₹35,000 crore in 2012-13 to ₹41,129 in 2015-16. On top of this, expenditure has increased post trifurcation. The last mayor of unified MCD complained, "Now we have three commissioners, three mayors, three standing committees and the paraphernalia that is attached to all of them—three offices, three cars, all the stenographers, everything has increased three fold."

Powers of MCD curtailed

The last commissioner of unified MCD had claimed that "prior to trifurcation, the MCD was a force to reckon with. The commissioner, equivalent to the level of a chief secretary, would be in a better position to take decisions compared to a joint secretary-level commissioner." A North MCD councillor had added that "the commissioner of the unified MCD used to be a senior level official but after trifurcation, the seniority of the commissioners reduced substantially and due to this, they no longer enjoy a lot of say in the bureaucratic set up. The state government started sending those officials to the MCD that were unable to perform, which impacted the efficiency of the organisation."

The structural design, which on paper looked very good—small jurisdictions, functional efficiency, well-delineated responsibilities—did not materialise. Former Delhi government official

These complaints are due to the fact that after trifurcation, the Delhi government recommends names for the position of the commissioners and the Centre merely ratifies this, as opposed to earlier when the commissioners were appointed directly by the Union Home Ministry.

Note, though, that these powers have been taken away systematically and not at one go, as shown in the first article of the series.

Neither accessible nor functioning smoothly

With respect to accessibility for people, East Delhi has probably improved but for South Delhi the headquarters is still in the same place, so there's no difference. Secondly, functioning hasn't improved either. The last mayor of unified MCD explained this well, "Delhi has a very different kind of demography. There are areas which are highly developed like South Delhi and there are areas which require a lot of development like East Delhi. But the revenue proposition is just the opposite. We get more revenues from South Delhi than from East Delhi. So the development of Delhi would become one sided and that's what's happening. We don't have any resources in East Delhi, and North Delhi also has a resource crunch, while South Delhi abounds with resources. So trifurcation has led to a very lopsided position."

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Poor structural design of MCD remains

Trifurcation failed to address the issues of structural design of the corporations because no such amendments were made to the MCD Act, 1958 that would significantly alter the functioning of the MCD. The structure remained the same, except that they were split into three parts. Sheila Dikshit said this split brought administration down to the lowest level, providing better access to the machinery. But as discussed earlier, there is no considerable ease of administration due to accessibility.

A retired Delhi government official elaborated, "The logic of trifurcation was very clear—that smaller bodies will be more effective, more efficient, more focused, and can take cognisance of these local problems. However, that's not how it has emerged. The three corporations in practice continue to remain bodies which have ill-defined functions and their roles are not well carved out. Their resources and expenditure continue to be mismanaged and the structural design for a body or institution, which on paper looked very good—small jurisdictions, functional efficiency, well-delineated responsibilities—did not materialise'.

No stake in making the experiment successful

"If you do not experiment in an administration that seems to fail, then it's not fair to either the system or the service to the people". – Sheila Dikshit

Overall, there has been no time to make the experiment successful. Every year since 2012 has been an election year and due to that, the actual work being done by the governments has been minimal. The year 2012 saw the first MCD elections post trifurcation, 2013 had the Delhi Legislative Assembly elections, 2014 had the Lok Sabha elections and 2015 had the Delhi Legislative Assembly elections again. Three-four months prior to every election, and then some time following, no work is done as the elected representatives take time to settle in. A former North MCD councillor and MLA summed this up perfectly: "The corporations have been neglected in the fight for power at Delhi and at the Centre. The citizens are left facing the brunt of the power tussle between political parties. The people of Delhi have been cheated!"

The citizens are left facing the brunt of the power tussle between political parties. The people of Delhi have been cheated!" Former North MCD councillor

Thus, in the short term the three corporations are likely to face multiple challenges to sustain. The MCD is believed to have made no significant strides in "good governance" post trifurcation. And in the run up to the Assembly elections in 2013, the Congress-led Delhi government actually threatened to supersede the corporations if they did not "fall in line." While the Congress had hoped to win a majority in at least one of the corporations, they failed and that can be seen as a reason for their aggressive and non-supportive outlook. The incumbent AAP government also misses no opportunity to blame the MCD for the poor state of civic affairs in Delhi post trifurcation. Amidst strikes by municipal employees in January last year, Delhi Finance Minister, Manish Sisodia even demanded dissolution of the three municipal corporations and fresh polls, alleging that the civic bodies had diverted funds released by the Delhi government for payment of salaries. The BJP, however, alleged that this brought to light the real intentions of the AAP government and they were purposely creating a financial crisis. Clearly, caught in a political blame game, the Delhi government has got no incentive to see the trifurcated MCD succeed. It is only when the political parties align at the state and local level can the MCD begin to get adequate funding and function smoothly.

The third article of the series will particularly look at the outcomes of trifurcation on service delivery, using the case of solid waste management in East Delhi.

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