Local Area Development Paradox

Local governance in Chennai is ridden with a curious paradox. The elected representatives have substantial funds to spend on development works, and there is a pressing need for infrastructure, yet the funds are not being utilised.

According to data provided by the Corporation of Chennai under the Right to Information Act (RTI) 2005, more than 80% of funds allotted to successive mayors of Chennai for development works over the last 10 years remain unutilised.[i]

On average, the mayors spent 26.8% of the funds allotted every year, though not a single rupee was utilised in 2006-07 and 2010-11 (See Table 1).

Mayor’s Special Development Fund

The special development fund is a discretionary fund allotted to the mayor for permissible works. Started in 1998-99, the Mayor’s Special Development Fund scheme entails a wide array of development works. The amount allotted to the mayor every year has increased from 50 lakh to 2 crores over the years. However, of Rs 11 crores allotted during the last ten years, only Rs 1.99 crores have been spent (See Figure 1 and Table 1). The unspent amount stays with the corporation for other purposes.[ii]

Figure 1. The Gulf between Allotment and Expenditure 

Source: RTI filed with the Corporation of Chennai in 2013. 

Table 1. Utilisation of Mayor’s Special Development Fund Between 2003 and 2013.

Source: RTI filed with the Corporation of Chennai

Underutilisation of Councillors’ Ward Development Fund

A similar trend exists in the utilisation of councillors’ ward development fund. More than 50% of the funds allotted to the councillors for the development of their wards over the last ten years—amounting to nearly 140 crores—remain unutilised.[iii]  The utilisation of ward development funds has decreased dramatically over the last ten years—from 97.61% in 2003-04 to 17.83% in 2012-13. Surprisingly, the total amount allotted every year to the councillors increased six-fold in the same time-period (see Figure 2 & Table 2).

Figure 2. Councillor’s Ward Development Fund: The Spike in Expenditure Before 2011 Council Elections

Source: RTI filed with the Corporation of Chennai

The data on local area development-related expenditure shows an anomalous pattern: an increase in the amount allotted results in a significant decrease in utilisation (see the highlighted portions of Table 2). In 2003-04, the utilisation of the councillor’s ward development fund stood at 97.61% ; however when the allocation increased from Rs 9.3 crore to Rs 10.85 crore next year, the utilisation fell to 85.07%. The downward spiral continued as the allocation increased further. When the allotment climbed up to Rs 46.5 crore in 2011-12, the utilisation slipped from 62.75%  in the previous year to 29.59%. After the All India Anna Dravida Munnetra Kazhagam (AIADMK) swept the council elections in 2011, the allocation increased to Rs 60 crore per year, but the utilisation plunged to an all-time low of 17.83% (in relative terms).  The only exception to this pattern is the year before the 2011 elections when the utilisation spiked to 62.75% (of the 38.75 crore allotted). 

Table 2. Utilisation of Councillor’s Ward Development Fund between 2003 and 2013

Source: RTI filed with the Corporation of Chennai

The corporation’s records reflect a lack of initiative on the part of the local elected representatives in carrying out necessary development works. But the former mayor M Subramanian of the Dravida Munnetra Kazhagam (DMK) defends them on the ground that there are just too many restrictions on spending:[iv]

There is little scope for the Mayor to utilise the funds. All the departments of the corporation receive sufficient budget allocation to carry out development works such as construction of storm water drains, roads etc. The mayor cannot spend on works that come under other departments–like the slum clearance board, the housing board and the public works department (PWD) –which actually need funds.

Furthermore,  Saidai P Ravi of the Congress, who was the leader of the opposition between 2006 and 2011 in the corporation council, said that since the funds allotted to the mayor are divided zone wise, they eventually amount to a pittance.[v] This leaves us with a paradoxical situation where we have funds as well as the need for infrastructural development, yet the utilisation is minimal.

Contrary to their argument, while the allotment (to the mayor as well as the councillors) has increased substantially, the scope for utilisation also expanded in 2011 with the inclusion of 45 new wards into the corporation limits—a 144% increase in the total area.[vi] However, in the year after the 2011 elections, nearly 67% of Mayor’s Special Development Fund remained in the corporation’s coffers while the aggregate utilisation of councillors’ funds plummeted to an all time low (in relative terms) of 17.83% (See Table 1 & 2).

How were the Funds Utilised?

In its official response to the author’s RTI query pertaining to the last ten years, the corporation could furnish details of projects proposed and completed only between 2011-12 and 2013. The zonal offices could not furnish records of works proposed and completed under the scheme for the greater part of the concerned period. The Financial Management Unit and the Buildings Department of the corporation were locked in a tug-of-war over who should collate and furnish the data.

Table 3. Works Proposed/Implemented by the Incumbent Mayor since he Took Office After the 2011 Elections. (See Appendix for the project details)

Source: RTI filed with the Corporation of Chennai

Nevertheless, the projects proposed by the incumbent mayor Saidai S Duraisamy (of the All India Anna Dravida Munnetra Kazhagam [AIADMK] ) give us a glimpse into the utilisation patterns (See Appendix for the list of projects undertaken). Out of 29 works proposed (or implemented) under the Mayor Special Development Fund scheme since 2011-12, eight are located in Zone 10, which overlaps the mayor’s own constituency. The (peripheral) zones that include the newly incorporated wards remain ignored (See Figure 3 in conjunction with Figure 4).

 Moreover, out of 29 works proposed (or implemented), eight are bus shelters (five of them in Zone 10) with the proposed cost between 14 lakh to 20 lakh each (See Table 3). These bus shelters often serve as good advertisement spots for the elected representatives and their party. According to Ravi–

The new zones should be receiving new projects but that is not the case. Instead, we see that the public money is being spent on bus shelters that can be constructed free of cost by the corporation through the BOT (build-operate-transfer) mechanism. There is no need for the mayor to spend the money on bus shelters.

Mayor Saidai S Duraisamy refused to be interviewed on this issue on the grounds that he did not have Chief Minister Jayalalithaa’s permission, an indication of the level of autonomy that local elected representatives enjoy. However, an associate commented:

The mayor decides where to take up a project on a first-come-first-serve basis. If one zone got more projects than the others, it means more people from that zone approached him. As for the construction of bus shelters, there are problems with the BOT mechanism in certain areas. These bus shelters can also be a source of additional revenue for the corporation.[vii]

For urban studies scholar Solomon Benjamin, this trend “hits on a core issue of urban political crisis”.[viii] There were no elections to the civic body for 23 years after the state government dissolved the council in 1973.[ix] It was only in 1996 that the government decided to conduct the elections again and by that time “the political vacuum got taken over by a politics that brings together parastatals, further reinforced by the World Bank and USAID programmatic agenda of ‘urban reforms’ that empowered higher level technocratic administrator circuits”.[x]

As a result, with a party controlled “mayor heavy political system”, we have a situation where elected municipal councils remain subjugated and with little say in the political debate on where the funds are to be spent”.[xi]

Figure 3. Number of Projects proposed/implemented by the Mayor in each zone: Out of 29 works proposed (or implemented) under the scheme since 2011-12, eight are located in Zone X which overlaps the incumbent Mayor’s constituency.

Source: Compiled from information furnished by the Corporation of Chennai under the RTI Act, 2005

Zonal map of the Corporation of Chennai - http://www.chennaicorporation.gov.in/deploy/CORP.war/zone/index.htm

RTI Query - Councillors' fund: Click here

RTI Ouery - Corporation's Reply Mayor Funds: Click here

RTI Query - Corporation's Reply Councillor Funds: Click here

References