Chandigarh admn to provide monthly aid; MC to lose another ₹10 crore in interest

UT finance department in a recent order levied cuts on the monthly spending of departments and corporations including the MC.

With the UT administration deciding to release grant-in-aid to the municipal corporation on a monthly, rather than quarterly, basis, the financially struggling civic body is set to lose around Rs 10 crore in annual interest income.

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For the 2020-2021 fiscal, the UT administration had allocated ₹425 crore for the civic body. But, the aid was cut by 20% and revised to Rs 340 crore in June. The 20% cut was mandated by the central government in the wake of revenue loss on account of the Covid-19 lockdown.

MC commissioner KK Yadav said, “The MC used to get a grant every three months. All of these funds were not spent in the month when these were received. Most of the aid would be deposited in the MC bank accounts, and we would earn an interest on it. In a year, MC earns around Rs 10 crore from such an interest.”

Now, the MC will lose that option, too. “With monthly instalments, we will lose the opportunity to earn an interest on the deposited amount. Most of it will be spent on our monthly expenses,” Yadav said.

The MC has been struggling with revenue generation, particularly in the wake of the pandemic. The civic body had even revised its revenue estimates and brought it down to Rs 321 crore, but effectively has only receipts of Rs 241 crore for this fiscal. Against the total committed liabilities of Rs 597 crore, the MC has only Rs 581 crore, a shortfall of Rs 16 crore. Even the routine maintenance works are going to suffer.

The MC has to pay Rs 402 crore to its employees as salary and Rs 50 crore as employee pensions. In addition, around Rs 120 crore is reserved for the MC’s electricity bill and Rs 25 crore as payments for petrol/diesel. Consequently, the civic body is left with a shortfall of Rs 16 crore.

In the latest monthly instalment of the aid, after the stipulated cuts in allocation, the MC has received Rs 30 crore instead of the Rs 35 crore it was supposed to get as per original allocations before the Covid-19 pandemic.