Fiscal deficit: Chandigarh MC won’t undertake any new development works this year

With the grants from UT and MC’s own revenues going down due to the Covid-19 outbreak, MC may struggle to even pay salaries to its employees

Even as the Bharatiya Janata Party (BJP) and Congress continued to trade barbs during the general house meeting on Monday, Chandigarh municipal corporation (MC) commissioner KK Yadav declared that no new development work would be undertaken this fiscal year as the civic body is facing a deficit budget, and it would struggle to pay even its employees’ salaries.

Chandigarh mayor Raj Bala Malik along with officers during MC’s general house meeting which was held through videoconference on Monday. (Keshav Singh/HT)

In the meeting held through video conference, Yadav said that against the total committed liabilities of ₹597 crore, the MC has only ₹581 crore, a shortfall of ₹16 crore. Even the routine maintenance works are going to suffer, he said.

“There is also no chance of getting additional funds this fiscal as the Covid-19 outbreak has hit the revenues of both the UT administration and the central government,” said the MC chief.

Though, he added, that certain works such as road carpeting, augmentation of water storage, street lighting and village development will be carried out as funds for these have already been separately allocated by the UT administration.

MC HAS ONLY ₹581CR TO SPEND

The UT had approved a budget of ₹1,472 crore for the Chandigarh MC this year, of which, ₹1.072 crore was requested as grant-in-aid on the lines of the fourth Delhi finance commission. But the UT administration allocated grant-in-aid of ₹425 crore while the MC’s own revenue receipts were stated to be around ₹402 crore, taking the total funds available to ₹827 crore.

However, in view of the Covid-19 outbreak, the MC revised its revenue estimates and brought it down to ₹321 crore. “Of this, around ₹20 crore has been set aside for the Covid fund, for which the Centre’s approval is required, and it is uncertain how it will be used. The MC gets ₹63 crore income from two petrol pumps, but, it fuel expense is ₹60 crore, so only ₹3 crore will be left. Consequently, the MC receipts stand at ₹241 crore, said Yadav.

Earlier this month, the UT had also cut 20% from the ₹425 crore grant-in-aid in June and revised it to ₹340 crore. The 20% cut in expenditure was mandated by the central government in the wake of revenue loss on account of the Covid-19 lockdown.

So, effectively, the Chandigarh MC is left with only ₹581 crore to spend.

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

BJP-CONGRESS BLAME GAME

Congress councillor Devinder Singh Babla attacked the BJP from the onset of the meeting, stating that the BJP is solely responsible the MC’s financial mess. “The only solution to MC’s financial crunch is to remove BJP and bring Congress in control of the MC,” said Babla.

In the midst of the heated exchange between councillors of both parties over Babla’s statement, BJP councillor and BJP’s city unit chief Arun Sood responded by listing some of the works done by the BJP, “29 MGD water has come, funds have been allocated for roads carpeting, dark spots, stray cattle management, and many other works. The financial mess is the legacy of the Congress’ mismanagement during its long rule in the MC. We are slowly rectifying it.”

AGENDAS TAKEN UP

Ironically, even as the MC general house debated the financial crunch, the councillors rejected one revenue generation agenda in Monday’s meeting. The councillors said no to the MC proposal for renting the Mahila Bhawan in Sector 38. The MC was to rent out the first floor of the Bhawan for ₹2.5 lakh per month rent.

The House, however, approved the agenda regarding display of advertisements on 55 public toilet blocks. Changes in current norms for allotment of some norms, such as giving allotment for five years rather than one year, was allowed.

The agenda regarding waiving off license fee of kiosks till full lifting of lockdown at Night Food Street, Sector 14, was also approved.