Chandigarh MC taps into ₹10 crore fixed deposit to pay salaries, bills

Struggling to pay salaries, wages and its outstanding bills, Chandigarh municipal corporation (MC) on Friday was forced to tap into its fixed deposit (FD) savings

Struggling to pay salaries, wages and its outstanding bills, Chandigarh municipal corporation (MC) on Friday was forced to tap into its fixed deposit (FD) savings before its maturity.

During the Covid-19 crisis, MC has lowered its revenue collection projections. (HT file photo)

The fund-starved corporation withdrew one of its FD of ₹10 crore for the purpose. The remainder, about ₹6 crore, will again be deposited as a fixed deposit, said a senior MC official requesting anonymity.

Against the committed liabilities of ₹597 crore, MC expects to get less than ₹580 crore. However, during the Covid-19 crisis, MC has lowered its revenue collection projections and even the grant-in-aid has been cut by 20% on a quarterly basis.

The corporation has to pay ₹420 crore as salaries, ₹50 crore as pensions, ₹120 crore as electricity bills, and ₹100 crore as fuel expenses.

“In such a situation, the MC had to take money out of an FD to clear its committed liabilities. When the fund could not be raised from MC’s revenue, the accounting department decided to withdraw savings before maturity,” said the official.

MC has sought ₹1, 232 crore under the revised budget estimates from the administration. Of this amount, ₹1,072 crore is under revenue head. Only ₹115 crore is to be utilised for development works.

NO FUNDS FOR VILLAGE DEVELOPMENT

Notably, the UT administration has refused to provide funds for development works in 13 villages and Manimajra, which were recently included in the MC. The civic body had sought ₹125 crore for the development work in villages and ₹13 crore for Manimajra.

The administration has stated that provision of these funds would be considered after UT’s revised estimates are approved by the Centre, which is expected by January 2021.

The MC’s request to waive the 20% cut in expenditure, mandated by the central government in UT’s expenditure, has so far elicited no positive response from the administration.