‘Division fund’ causes rift in Kochi corporation

The Kochi Corporation Secretary’s insistence that an amount above a certain limit cannot be spent by the civic body in the name of a ‘division fund’, without the approval of the District Planning Committee (DPC), while the civic body’s coffers are nearly empty, has ruffled feathers in the council.

In a letter to the Mayor, Corporation Secretary R. Rahul pointed out that the spending on annual projects could be undertaken only as per a Government Order issued in February 2018. According to the guidelines in the order, only 25% (₹12.56 crore) of its own fund can be spent on urgent work without the DPC’s sanction. But this year, over ₹4 crore has already been paid to contractors for work done, and additional work worth ₹9 crore has already been sanctioned.

Any additional work taken up now will have to be placed before the DPC.

He also stressed the poor financial situation of the corporation, which has accrued liabilities worth ₹88 crore. With just over ₹5.48 crore in the bank, the corporation requires ₹11.5 crore for monthly expenses, owes ₹44 crore to contractors and ₹69 crore to PMAY-LIFE beneficiaries.

Since several expenses listed under the division fund were not sanctioned, UDF councillors raised a hue and cry. “Such a situation where division fund expenses are to be placed before the DPC has never come up before,” said UDF councillor A.B. Sabu. Other councillors pointed out that it could delay projects taken up for the division.

Around ₹40 lakh per year is set aside as a councillor’s division fund to take up projects for the development of the local area, they said.

However, LDF councillor Poornima Narayan said the Kochi Corporation was the only civic body which had the concept of a division fund. How the division fund is spent is still uncertain, she said. “When the corporation’s coffers are in bad shape, our expenses need to be prioritised. Payments should be made under important schemes like PMAY rather than spend public money on insignificant projects,” said Ms. Narayan, chairperson of the education standing committee.