Funds denied due to lack of elected MCC Council; City development works severely affected

Mysuru: Already grappling with a severe financial crisis, the Mysuru City Corporation (MCC) faces another setback as the State Government has made it clear that the annual grant from the 15th Finance Commission — ranging between Rs. 65 crore and Rs. 70 crore — will not be disbursed in the absence of  elected representatives.

On Jan. 29, the Directorate of Municipal Administration sent a letter to the MCC Commissioner, stating that a meeting held on Jan. 18, chaired by Government Secretaries and Project Directors, confirmed that Mysuru and 43 other Urban Local Bodies (ULBs) are ineligible for the grant in the financial year 2024-25 due to the absence of elected Councils and representatives, as per Finance Commission guidelines.

As a result, these 43 ULBs, including MCC, have been explicitly directed not to undertake any projects under the 15th Finance Commission grants for the financial year.

Impacting development

This decision severely impacts MCC and other local bodies such as Bogadi Town Panchayat, Hootagalli City Municipal Council, Kadakola Town Panchayat, Rammanahalli Town Panchayat and Srirampura Town Panchayat, which will now have to operate without the crucial financial assistance.

In the previous years, the Government would issue letters every January instructing ULBs to prepare estimates and complete tender processes for various projects under the 15th Finance Commission grant.

However, with no special financial grant available this year and a clear directive barring projects under this grant, the MCC and other ULBs are struggling to initiate development projects.

Since the 15th Finance Commission mandates that grants cannot be disbursed to local bodies without elected representatives, 43 ULBs, including Mysuru, have lost their special grant for the financial year 2024-25.

Other ULBs also affected

Additionally, the Directorate of Municipal Administration has informed Commissioners of ULBs and Project Directors of District Urban Development Cells (DUDCs) across multiple districts — including Bengaluru Rural, Bengaluru Urban, Belagavi, Bagalkot, Chikkamagaluru, Dakshina Kannada, Davanagere, Haveri, Kalaburagi, Kolar, Ramanagara, Shivamogga, Tumakuru, Udupi, Uttara Kannada and Vijayapura — that the 15th Finance Commission grant will not be released due to the absence of elected representatives.

Meanwhile, MCC’s financial situation remains dire, with no funds forthcoming from the Karnataka Government. Compounding the crisis, it has also failed to receive grants from any Centrally sponsored schemes.

The MCC is facing a severe financial crisis, struggling to manage essential city operations — such as providing drinking water, street lighting, sewer maintenance, park upkeep, sanitation and roadworks — entirely from its own resources. These resources include Property Taxes, Water Taxes, Trade Licence fees, commercial road fees, and advertisement rentals.

Pending bills

The financial situation has deteriorated to such an extent that, even after completing development projects, the MCC has been unable to clear dues owed to contractors for years. With the 15th Finance Commission grant no longer available, the situation is expected to worsen.

Under 15th Finance Commission scheme, MCC received an annual grant of Rs. 65 crore to Rs. 70 crore. Preparations for disbursement were typically made in January and necessary projects across city’s 65 wards were completed by April-May. Now, with lack of funds, the civic body is struggling to maintain the city and initiate new projects.

Undermines spirit of Constitution

This is a major setback for Mysuru’s overall development and maintenance. The special grant played a crucial role in facilitating several development projects across all 65 Wards. However, due to lack of elections for the Corporation and other local bodies, this vital grant is now being missed. The State Government is directly responsible for this situation. Given the current circumstances, the MCC can’t undertake any new projects. The Government must seriously reconsider this decision and announce elections for MCC Council without delay. If the intention is to uphold the aspirations of the Constitution within a democratic system, it must adhere to the principle of decentralisation of power. Continuing with centralised governance would undermine equality, social justice and the very spirit of Constitution.       — Shivakumar, former Mayor

Special grants to be sought

The MCC Council, comprising elected representatives, must approve fund allocations. As a result, there is currently no possibility of receiving funds from the 15th Finance Commission. On Tuesday, officials from the State Finance Commission visited the MCC and indicated that Finance Commission funds may become available once the elected Council is constituted. However, there is no certainty regarding the disbursal of these funds. For the 2023-24 fiscal year, since an elected Council was in place until November 2023, the allocated funds will be received. However, for 2024-25, due to the absence of an elected Council, Finance Commission funds remain unavailable. Given this situation, a request will be made to the State Chief Secretary for special grants from the State Government to ensure the completion of ongoing projects. Additionally, efforts are being made to recover outstanding Property Tax dues from large defaulters as part of MCC’s resource mobilisation strategy.  — Shaikh Tanveer Asif, MCC Commissioner