MCD Funding Increases, Coordination Key to Service Improvements

MCD Funding Sees Rise, But Utilisation Remains Key: Delhi Economic Survey​

New Delhi, March 23 — Funding for the Municipal Corporation of Delhi (MCD) has improved, but effective utilisation and better coordination among agencies remain critical to delivering cleaner streets, improved schools, and stronger public health services, according to the Delhi Economic Survey 2025–26.

Urban Pressure Driving Higher Allocations​

The survey, presented in the Assembly by Chief Minister Rekha Gupta on Monday, highlighted that rising allocations come as Delhi has become almost entirely urbanised. This has significantly increased pressure on civic infrastructure such as waste management, school education, and neighbourhood development.

Increased Devolution to Local Bodies​

According to the report, overall devolution to local bodies is estimated at ₹6,897.01 crore for 2025–26 (Budget Estimates), up from ₹6,231.79 crore in 2024–25. This reflects a broader push to strengthen urban service delivery.

Major Share for MCD​

A significant portion of the funds continues to be allocated to the MCD. Under the Basic Tax Assignment (BTA), the corporation is set to receive ₹3,282.26 crore in 2025–26, compared to ₹2,983.87 crore in the previous financial year—marking a notable increase following its unification.

Allocations to Other Local Bodies​

The survey also outlined allocations for other civic bodies:

• New Delhi Municipal Council (NDMC): ₹32.37 crore
• Delhi Cantonment Board: ₹22.19 crore

The total allocation under BTA to local bodies stands at ₹3,336.82 crore.

Sector-Wise Funding Trends​

Education​

Funding for education—critical for MCD-run primary schools serving lakhs of children—has increased from ₹2,064.82 crore in 2024–25 to ₹2,293.52 crore in 2025–26.

Health​

Allocations for the health sector, including municipal hospitals and dispensaries that cater largely to lower-income groups, are expected to rise from ₹403.96 crore to ₹464.16 crore.

Urban Development​

Urban development grants, which fund roads, drainage, and sanitation infrastructure, have also increased from ₹729.55 crore last year to ₹802.51 crore in 2025–26.

Focus on Implementation​

Despite higher allocations across sectors, the survey emphasised that the real challenge lies in efficient utilisation of funds and stronger coordination among agencies to ensure tangible improvements in civic services.