SDMC suffers financial crunch; Adopts austerity measures

The BJP-led South Delhi Municipal Corporation (SDMC) has directed all departments not to create any additional financial commitments except in unavoidable circumstances, officials said. The move comes a month after the AAP government had decided to accept most of the recommendations of the Fifth Delhi Finance Commission (DFC), providing 12.5 per cent of its total tax collection to municipal corporations in the city.

According to the devolution formula, 12.5 per cent of tax collection that will be transferred to the local bodies will be divided into two parts. The East and North Delhi corporations will receive 65 per cent and 35 per cent, respectively of the first part of the six per cent. The other three per cent will be meant for all other local bodies.

The remaining 6.5 per cent will be devolved to the local bodies through budgetary provisions of different departments, Urban Development Minister Satyendar Jain had said while presenting the Delhi government's action taken report on the Fifth DFC in the Assembly in January. SDMC Commissioner P K Goel in a letter issued to all departments on February 8, has said, "With the implementation of recommendations of the Fifth Delhi Finance Commission, the devolution of funds to the SDMC has been drastically curtailed".

A senior SDMC official said the move has been decided as an "austerity measure". "In view of the adverse financial situation of the SDMC and keeping in mind the existing cash and committed liability of the corporation, it has become necessary to avoid creation of additional financial liability," the letter read.

"All heads of the departments are hereby directed not to create any additional financial commitments except in unavoidable circumstances with prior approval of the the undesigned only," it said.

(With inputs from agencies.)