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Municipal Corporation of Delhi – benefits and challenges of having same party at the centre

March 17, 2015

New Delhi is one of the largest capitals in the world with a dense population. The city is governed by three Municipal bodies. The largest body being the erstwhile Municipal Corporation of Delhi (MCD), New Delhi Municipal Corporation (NDMC) and the Delhi Cantonment Board.
MCD first came into existence through an Act of Parliament on 7 April 1958. In 1992, the 73rd and 74th Amendments brought in changes in the functioning of the Municipal Corporation giving greater focus to developing rural and urban areas.

Municipal Corporation of Delhi - benefits and challenges of having same party at the centre

Trifurcation of MCD

In a landmark decision in 2012, MCD which controls the administration of roughly 1,397.3 sq. kms of area and serves over 11 million people, was divided into three corporations:

1. South Delhi Municipal Corporation covering Districts of South Delhi, South-West Delhi and West Delhi
2. North Delhi Municipal Corporation covering Districts of North Delhi, North-West Delhi and Central Delhi
3. East Delhi Municipal Corporation covering Districts of East Delhi and North-East Delhi

Brief Political History

Delhi has been a Union territory till it became a state with its own Chief Minister. But through most of its years, Delhi has been politically governed by the Indian National Congress. The Congress controlled the city till the 90s when the BJP came to power.

In 1998, the Congress party made a comeback and Sheila Dikshit governed the city as its Chief Minister for three consecutive terms till she lost the elections in 2013, making way for Arvind Kejriwal-led AAP to form the government. After a brief rule of 49 days, the AAP government resigned and Delhi was placed under President’s rule till February 2015, when AAP made a comeback with a landslide win. Arvind Kejriwal is once again back as the Chief Minister of Delhi.

Hotly debated trifurcation of MCD

MCD has mostly been dominated by BJP, which has been at loggerheads with the Congress-led government in Delhi. In a highly debated and controversial decision, the Sheila Dikshit-led Delhi government decided to trifurcate MCD, with the objective of providing improved services.

With Delhi being skewed in levels of development between rural, urban, slum areas, unauthorized colonies etc., the trifurcation was opposed by many saying that it would cause financial disparity between the three corporations, as each had its own unique demographic.

Unfortunately, the current situation bears out this logic. Presently, only the South Delhi Municipal Corporation is generating a revenue surplus. Its revenues are around Rs. 3,948 crore against an expenditure of Rs 3,900, leaving a surplus. The revenue was further boosted when the Delhi government decided to regularise the farmhouses of South Delhi, which further added Rs. 300 crore to the revenue kitty. The corporation is targeting becoming loan-free in the next five years.

The North Delhi Municipal Corporation is financially stressed with an expenditure around Rs. 2,200 crore and revenues around Rs. 1,400 crore. The corporation has further liabilities of around Rs. 250 crore, leaving a deficit of around Rs. 1,000 crore.

The East Delhi Municipal Corporation is the most financially stressed of all the three corporations, as it comprises around 30 unauthorized colonies, which do not pay any property taxes. Of the roughly 6 lakh properties in the zone, only 2 lakh contribute to the property tax. In the absence of other revenue generating sources, the corporation generates only Rs. 700-750 crore revenue. Against this, the annual expenditure is around Rs. 1,200 crore, leaving a deficit of around Rs. 500 crore.

So why are two of the three Municipal corporations financially stressed?

Several reasons. First, all three are overstaffed and underperforming. There are several instances of corruption and financial mismanagement and if greater transparency, accountability, automation and pruning of excess staff were duly implemented, all three would certainly improve their balance sheets.

That said, it’s also true that the trifurcation led to East Delhi Municipal Corporation with the least revenue generating areas and assets. Unfortunately, the government has played vote bank politics over the years by encouraging migrant population to settle in unauthorised colonies and further exacerbated the problem by offering free subsidies by way of power, water and other services.

The major brunt of these populist policies is being faced by the East Delhi Municipal Corporation. If more colonies were to be converted to authorised areas and people encouraged to pay taxes and for other utilities, the East could well reduce its revenue deficit, if not turn in a surplus. But that’s a political decision that needs to be taken.

Unlike Central and South Delhi, The East lacks major posh hotels and other assets to enhance its revenues. The other corporation in Delhi, NDMC, is a good example of this. With higher revenues generated from major 5 star hotels and restaurants, its runs a surplus and is thus able to invest in improving colonies and providing better services to areas under its jurisdiction. Furthermore, NDMC is better managed and runs more efficiently. Something that the three corporations under erstwhile MCD have failed to emulate.

Delhi suffers while the corporations battle for control

There has been a running battle for control of power and resources between the municipal corporations and the Delhi government. All corporations have been demanding more resource allocation and greater powers from the Delhi government.

This is a result of having different political parties at the state government level and the corporations. Earlier, we had the Congress-led government that ruled for three terms and was constantly at loggerheads with the BJP-dominated MCD.

The situation got no better with AAP forming the government for just 49 days and, thereafter, the city came under President’s rule. During this period, important decisions got postponed that further contributed to the financial situation of the already stressed municipal corporations. Unfortunately, it’s the citizens of Delhi that have suffered the most, as a result of this battle of attrition.

The advantages of having the same political party

It is always better to have the same political party at the centre and state level. The same is true between the state government and city municipal corporations. If the political parties are different, then there is always greater conflict. And this is true for most cities across the world.

While having the same political party is desirable, in most cities they end up not being the same. For democracy, this is perhaps good as it tends to keep the state government in check, however, the flipside is that conflict between the two often delays vital decisions and in almost all cases, it’s the city that suffers. Delhi too has seen its fair share of conflict over the years.

So what happens next?

Arvind Kejriwal is expected back in Delhi after his personal trip down South for treatment and hopefully, this time around he will remain for the full term and take up all issues pending for Delhi.

It remains to be seen how forthcoming he will be when it comes to devolution of power and resources to the three municipal corporations. As citizens, we can only hope that Delhi gets the administration and quality of service that it deserves.

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Disclaimer: The views expressed are of those of the author and do not represent the views of

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