Salaries on hold, Delhi's North and East municipal corporations burn cash on pensions

NEW DELHI: They blame the Delhi government for their financial woes but North and East corporations also have a role in digging themselves into a hole. Together, they owe the state government Rs 2,100 crore yet spend about Rs 650 crore every year on schemes and projects they don't need to take up.

Officials say the two corporations spend about Rs 125 crore each on old-age pension purely for political reasons. "It is Delhi government's responsibility to give old-age pension but the corporations have been paying it for decades," said an official, adding, "If there is political will, this money can be put to productive use."

Sources say North Corporation officials are trying to convince the political establishment to discontinue old-age pension and may move a proposal in this regard. East Corporation officials are also against paying pensions. However, with the next municipal elections due in 2017, BJP, which controls all three corporations, is unlikely to act on the advice now. "It is not an obligatory responsibility, but the corporations have been giving pension for decades. I agree there is a need to reconsider the pension issue, especially after trifurcation of MCD," said Delhi BJP chief Satish Upadhyay.

For North Corporation, its six hospitals are another massive cost. "We spend about Rs 360 crore annually on these hospitals. The state government should either pay us for their upkeep or take over their operations," said a senior official. East Corporation has one big hospital on which it spends crores.

Besides saving under these two heads, the corporations could optimize the utilization of their infrastructure and manpower as South Corporation did soon after it was created. Sources say North and East corporations should cut back on their redundant departments. "Toll tax has been outsourced, still we have a department for it. There are many such departments that should be either merged with other departments or closed," said an official.

The corporations have also lagged in generating revenue. At present, less than 35 per cent of properties pay property tax. Last year, North Corporation earned only Rs 17 crore from advertising. "There is a problem and we are trying to streamline the system. We have set a target of Rs 500 crore for our remunerative projects department, but all this will take time,'' said Ravinder Gupta, mayor, North Corporation.