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Cabinet approves Rs 374 crore MRF for three MCDs as one time exemption, 19th July 2016

Home/ Cabinet Approves Rs 374 Crore MRF For Three MCDs As One Time Exemption, 19th July 2016

DIRECTORATE OF INFORMATION AND PUBLICITY
GOVERNMENT OF NCT OF DELHI
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  • Cabinet approves release of Rs 374 crore to three MCDs as Municipal Reform Fund
  • Cabinet allows one-time exemption for financial year 2015-16
  • North MCD to get Rs 145 crore, East Rs 110 & South Rs 118 crore under the reasonable and equitable sharing formula

  • Decision to help MCD employees in tiding over difficult financial conditions

New Delhi: 19/07/2016

The Delhi Cabinet, in its meeting chaired by the Chief Minister Mr Arvind Kejriwal on Tuesday approved the release of Rs 74 crore to the three Municipal Corporations of Delhi as one time exemption for the financial year 2015-16, so that the employees of these corporations do not face financial hardships.

The cabinet approved Rs 145.30 crore for North MCD, Rs 110.70 crore for East MCD and Rs 118 crore for South MCD.

The cabinet accepted the formula worked out by the Urban Development Department for allocation of MRF share to the three corporations, since strictly on the basis of the recommendations of the Finance Commission two of the three corporations – North and East – do not qualify to get any allocation of the MRF.

The allocation share was decided by giving 50 % weightage to population, 25% to Area and remaining 25% to Population Density for each of the three corporations.

Background and Brief History of MRF: -

The 3rd Delhi Finance Commission submitted its report of recommendations, which covered the period of five years 2006-2011, to the govt. on 05-04-2007. The effect of acceptance of recommendations of the report has been given from 1st April, 2008 and it was valid for the period of three years i.e. up to 31st March, 2011. The devolution of funds made already to local authorities for the two years 2006-07 and 2008-09 were treated as final. The devolution of funds are given in the form of (i) Tax Assignment (ii) Municipal Fund (iii) Grant in Aid.

Delhi Govt has been providing Non-Plan funds to all three DMCs , New Delhi Municipal Council and Delhi Cantonment Board i.e. 5% of Net proceeds of all taxes and duties collected by the Govt. of National Capital Territory of Delhi for Education, Maintenance of school Buildings/Re-Settlement colonies. Maintenance of capital assets and Basic Tax Assignment (BTA) i.e. 4% of Net proceeds are also made available to the three Corporations and 0.07% to Delhi Cantonment Board.

MRF was released only in 2012-13 to all the three Corporations.

The effect of the recommendation of 3rd DFC as accepted by Government of NCT of Delhi has been given from 01-04-2008.

Before trifurcation, during the Financial year 2009-10 an amount of Rs. 3.00 crore was released to unified Municipal Corporation of Delhi with the concurrence of Finance Department, Government of NCT of Delhi . In the year 2010-11, an amount of Rs. 143.00 crore was released .

No funds under Municipal Reform Fund were released during the year 2008-09 and 2011-12.

After trifurcation, in the year 2012-13 an amount of Rs.150 crore was released to three DMCs as an interim measure, and it was adjusted against repayment of outstanding Ways and Means of Loan of three DMCs in the same financial year.

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