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Accountability in the Use of Discretionary Funding

March 23, 2013 by

Every municipal councillor in the city of Chennai is allotted a discretionary fund called the Municipal Councillor Local Area Development Fund (MCLAD), which enables them to undertake permissible ‘capital expenditure’- that is, expenditure used to upgrade and acquire physical assets such as equipment and property, in their respective wards. The funds are held with the Corporation of Chennai (CoC), and councillors can recommend development work in their respective wards.

The amount allotted to councillors has steadily increased. Councillors were allotted Rs. 7 lakh as ward development funds in 2007-2008. It was increased to Rs. 15 lakh in 2008-2009, and at the time of writing, amounts to Rs. 30 lakh. However, these discretionary funds have been under-utilised; in 2010-2011, when Rs. 25 lakh was available annually to each councillor, less than 63% of the funds were used. Estimates of fund utilisation from 2007-2011 were obtained upon Transparent Chennai filing an RTI.[i] More recent estimates of fund utilisation are not readily available, raising the issue of accountability in the use of these discretionary funds.

The underutilisation of these funds could possibly indicate that

  • 1. Councillors were not aware of the availability of discretionary funds, or
  • 2. The process of spending these funds is cumbersome, or
  • 3. The councillors are negligent.

There is a chance that some councillors are not quite aware of the executive powers they have been given, through the form of these discretionary funds; the underutilisation of the funds would, in this case, be a logical outcome. There may also be procedural issues with spending the funds- the required procedures may not be articulated clearly enough to the councillors, or the councillors may not find the existing procedures accessible enough. I intend to explore this area further in following weeks. With greater awareness of the existence of local area funding- both among the councillors, and the general public- and more information regarding their utilisation, the use of these funds would be held to a higher degree of scrutiny, leading to their being utilised more effectively.

Related to this matter, in 2010-11, the Central Information Commission (CIC), in separate rulings, ordered the Delhi government and the Municipal Corporation of Delhi to readily supply information on the use of discretionary funds of Members of Legislative Assemblies (MLAs) and Municipal Councillors (MCs) in New Delhi. Details were to be put up on display boards in Hindi in every ward in Delhi. Instrumental to this was the work of citizen groups, notably the Satark Nagrik Sanagthan (SNS), which mobilised citizens to draft a petition demanding more information about the utilisation of these funds. These details were to be put up by March 15, 2011.[ii]

This board displays the developmental works recommended and undertaken in Ward 176, Bhati, Delhi

Sharing this information through a widely accessibly medium- in this case, through multiple display boards in every ward, demystifies the domain of municipal expenditure. Accessibility to this information helps people understand what their elected representatives are doing with the executive powers accorded to them. This system increases the quantum of accountability that the municipal council has to the general public. With increased accountability, performance indicators can easily be determined by independent commentators, without the long-winded process of attempting to obtain data.

The CIC has noted that it is the basic obligation of the government to make this information readily available, under section 4 of the RTI Act.[iii] In the case of Delhi, the petition drafted and signed by citizens proved to be an adequate impetus for the CIC to make this ruling. To initiate transparency in the use of MLA and MC development funds in Chennai, a similar impetus may be required. In the course of the following weeks, I hope to explore the reasons for the under-utilisation of the funds, and the reasons for the seemingly reticent approach the Corporation and Council appears to have when it comes to openly sharing this information.

Bhatnagar, G. V. (2010, September 29). Boards to display details of development funds used.

Bhatnagar, G. V. (2011, February 16). Display details of development fund expenditur.


Kumar, R. (2012, February 2). Display boards trumpet projects ‘executed’ by Delhi Govt reps .

[ii] Content Text here

Written by Abhay Rao, intern, Transparent Chennai