February 07, 2016

Delhi’s Municipal Woes: A Sign of Things to Come


MUCH to the shock of residents of Delhi, and also for concerned people across the country, municipal sanitation workers have again gone on strike in the national capital just months after they had carried out a 10-day strike in June last year. Even more surprising was the fact that the issues are the same – non-payment of wages. Like last year, garbage is piling up in the streets, allegations and counter allegations are flying fast and thick, the courts are involved and angry gheraos, dharnas and demonstrations are visible everywhere. This time round, other municipal employees like teachers, doctors and nurses are also on the warpath, threatening to go on strike. Their demands are similar to the hapless sanitation workers.

The BJP controls the three elected municipal corporations in Delhi. It is also ruling at the centre. Sandwiched between these two tiers is the Aam Aadmi Party led state government of Delhi. Two of the municipal corporations, East Delhi and North Delhi, are witnessing the strike. These are the two most cash strapped corporations. The third one – South Delhi – has more resources, because of better income from the relatively richer areas under its jurisdiction. So it has managed to stave off a crisis, although its financial position is steadily worsening.




There are two types of factors that have contributed to this situation. One is the most obvious one, which is highlighted by the media: the political rivalry between AAP and BJP. The AAP led state government alleges that the three BJP led municipal corporations are riven with corruption, mismanagement and venality, that they have bungled the fiscal systems and outspent their resources. AAP also alleges that the central government led by BJP is allowing this to happen because, hand in glove with its corporation members, it is conspiring to bring the state government into disrepute and turn the people against it.

The BJP’s Delhi unit, still not fully recovered from the sound drubbing it got in the assembly elections last year at the hands of AAP, is alleging that the AAP government has not released funds due to the municipal corporations and hence the crisis. It is claiming that the corporations are owed all kinds of dues from various bodies, of which there are many in Delhi. All this, it alleges mirroring AAP’s allegation, is being done to discredit it before the 2017 municipal elections.

But behind all this lies another deeper truth which is often overlooked by the clashing political forces. This is – the way urban local bodies (ULBs) are run in the country, and specifically in Delhi. While space does not permit us to analyse the problems, especially financial problems, faced by ULBs countrywide, it is well established that shortsighted policies, financial arm-twisting and neo-liberal policy frameworks have destroyed the service functions of ULBs in India. This approach has destroyed democratic functioning of these bodies too.

But in Delhi, which we will now look at more closely, the problems have been magnified several fold because of the peculiar governance system here, divided as it is between the central, state and local governments.




Besides the well-known divisions of power between the Delhi state government and the central government, another aspect of the three-way division is that the central government controls some important municipal functions also. Here is how this works.

Five agencies look after municipal functions in the city: three municipal corporations (North, East and South Delhi), the New Delhi Municipal Council (NDMC) and the Delhi Cantonment Board (DCB). About 97 percent of the population is covered under the first three and the balance 3 percent is divided roughly equally between the NDMC and the DCB.

The NDMC, which looks after the elite New Delhi area, is nominated by the central government and receives funds directly from the ministry of urban development. The DCB, which governs the army area in South-West Delhi, is an elected body but largely controlled by the central government.

As many as 57 sections/sub-sections in the Delhi Municipal Corporation Act, 1957, and 67 sections/ sub-sections in the NDMC Act,1994, give the central government direct power. Some of the important provisions are: Section 338A of the Act (general superintendence, etc, of the union government), Section 54(appointment of the commissioner), Section 347D (appeal to the LG against the orders of the appellate tribunal), Section 349A (powers of the union government to make bye-laws) and Sections 485, 486, 487, 488, 489 & 490 (powers of the union government to require production of documents). These ensure that the municipal corporations of Delhi remain under the domain of the central government which can carry out inspections to issue directions, enforce compliance and has power to dissolve the corporation on default in performance of the duties.

The Delhi Development Authority, a body created under an Act of 1957 to carry out spatial planning of Delhi and which has a monopoly over acquisition, development and disposal of all land in Delhi, is also fully under the control of the central ministry of urban development. As a result, building construction and other civil works (like roads) which is theoretically under the municipal corporations, has to run past the DDA in many cases, and they have a say in determination.

Besides all this governance architecture loaded in favour of the central government, a considerable power is exercised by the central government through its financial control. Funds for the corporations are either generated by their own revenue systems (property and entertainment taxes and other cesses, duties etc) or given by the state government. A portion of the taxes raised by Delhi government goes to the municipal corporations. Currently about 6.5 percent of the taxes raised by the Delhi government go back to the corporations. But here too there is an indirect role of the central government – it also has to return a share of taxes to the state government, from which some will go to the corporations.




The single municipal corporation of Delhi was split into three bodies in 2012 – North, East and South Delhi. This was done by the then Sheila Dixit led Congress government. One consequence of this was that inequality arose among the three due to their different population bases. The East Delhi corporation governed areas had poorer population and lower property tax revenues while South Delhi had a much bigger income. Also, these new corporations were left with a legacy of debt from the parent corporation but they had differing abilities to repay it. These two fiscal constraints led to a worsening resource and revenue situation for the three, with East Delhi and to some extent North Delhi more affected.

It should be emphasised here that while the trifurcation was done in the name of more accountability and deepening democracy, the continued neglect of other more important aspects has put paid to these aspirations. For instance, the 74th Constitution Amendment of 1992, which lays down the law regarding ULBs had provided for zonal committees and ward committees as lower tiers of governance, going down to the mohalla level. All this has been continuously ignored across the country since 1992, and Delhi is no exception. Trifurcation has led to no visible difference because at the ground level things have not changed.




Looking at the problem of the striking sanitation workers in Delhi in the context of these issues, it is clear that the problems are going to persist so long as a more equitable and more democratic system of resource sharing is not put in place. For instance, the Delhi government has told the High Court in an affidavit that in the past four years, the funds transferred to the East and North Delhi Municipal Corporations have actually increased from Rs 526 cr in 2012-13 to Rs 893 cr 2015-16 (North) and from Rs 269cr in 2012-13 to Rs 466 cr in 2015-16 (East), as reported by TOI. For the current year, the Delhi government claims, no loan repayment deduction has been done. In other words, they are arguing that as much funds as possible and required have been transferred.

But the BJP, on its part, says that the corporations are owed more money than this. The East Delhi Municipal Corporation is owed Rs 300 crore municipal reform fund for the past three years, Rs 82 crores of share of taxes, Rs 150 crore in the form of property tax from discoms and Rs 20 crore by Delhi Jal Board, according to its mayor. In addition, they are calculating that the implementation of the 4th  Delhi Finance Commission (DFC) will yield Rs 3,000 crore for the past three years.

The 4th DFC, which is still to be implemented, has recommended increase in share of taxes to be given to local bodies.

Similarly, the North Corporation mayor has said that they are owed funds to the tune of Rs 538 crore from the Delhi government besides Rs 175 crore for education and Rs 100 crore for health and Rs 400 crore from Delhi Jal Board.

How will all this tangled mess get resolved? The only way out is to democratise the whole local governance structure by removing central government’s arbitrary and over-riding powers, forming zonal, ward and mohalla level committees with people’s representation and participation, thorough and periodic audit of corporation accounts and a definitive policy to boost the resources of the corporations through equitable means and support from higher levels of government. Till this happens, the corporations – and their employees – will lurch from one crisis to another, and the people of Delhi will suffer.