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₹8 crore left in coffers, Mohali MC facing major financial crunch
Development works are set to suffer as Mohali civic body’s monthly salary liability alone runs into ₹4 crore
Half way into the current financial year, the Mohali municipal corporation has exhausted majority of its funds, leaving it with just ₹8 crore for the remaining two quarters.
With its monthly salary liability alone running into ₹4 crore that will empty its coffers by November, the civic body is heading into a major financial crisis that is set to bring city’s development to a complete halt.
The development works pertain to maintenance of sewer lines, stormwater drains, water supply, solid waste management, street lights, toilet blocks, roads, footpaths, and parks, apart from the beautification of city’s entry points.
Why is MC in the red
Claiming that Mohali MC had been passing through financial straits ever since the AAP government came into power, city mayor Amarjit Singh Sidhu also blamed GMADA and PSPCL for not keeping their end of the deal, leading to dues worth ₹45.5 crore and ₹20 crore, respectively.
While PSPCL has been defaulting on depositing 2% municipal cess collected from power consumers, GMADA has not been paying its share owed for development works carried out by MC.
As per a 2020 agreement, GMADA has to foot 25% cost of any development work carried out by MC, but in the past nine months, GMADA has only paid ₹9.5 crore out of a total ₹55 crore. Similarly, 2% municipal tax is levied on consumption, use or sale of electricity within city limits. But PSPCL has not been clearing the owed tax.
Besides, while the corporation’s expenditure has been increasing by the year, the Punjab government has been imposing a cut on its annual budget estimates.
Notably, in May this year, the Punjab local bodies department had imposed a cut of ₹17 crore in Mohali MC’s budget for 2023-24. MC had proposed a budget of ₹190 crore, but the department approved only ₹173 crore. Of this, ₹95 crore will come from Punjab municipal funds, whose two quarterly instalments are pending.
Even, in 2022-23, the department had imposed a cut of ₹25 crore in Mohali MC’s budget.
Against a proposed budget of ₹161 crore, the department had approved only ₹136 crore.
Similarly, in 2021-22, the department had slashed MC’s budget by ₹31 crore, bringing it down from the proposed ₹148 crore to only ₹117 crore.
As such, MC relies heavily on contributions from GMADA and PSPCL for the city’s development works.
Among MC’s other major sources of income are property tax, advertisement fee, excise duty, water and sewerage bills, and rent and tehbazaari fee.
“Due to the extreme fund crunch, we will not be able continue with the regular development works, let alone start new projects. MC had planned to install air purification towers at various points in Mohali, but that will have to be stalled for now,” said the mayor.
MC commissioner Navjot Kaur said last month, GMADA had paid ₹9.5 crore of the pending dues and the corporation had already written to the development authority and PSPCL to clear all pending dues at the earliest to allow the city’s development works to continue.
Deputy mayor Kuljit Singh Bedi said several government buildings had also been defaulting on property tax payment, further compounding MC’s fund crunch. “Many developmental works suffer due to financial constraints. If only GMADA and PSPCL clear their dues, MC can be in the black again,” he said.
Meanwhile, local AAP MLA Kulwant Singh alleged complete mismanagement of funds in the civic body: “The mayor should answer where have the funds been spent in the past six months. There is no cleanliness in the city and the roads are also in a bad shape.”
What they say
Due to the extreme fund crunch, we will not be able continue with the regular development works, let alone start new projects. Ever since the AAP government came into power, we have been passing through financial straits.
Amarjit Singh Sidhu, Mohali mayor
There is complete mismanagement of funds in Mohali MC. The mayor should answer where have the funds been spent in the past six months? There is no cleanliness in the city and the roads are also in a bad shape.
Kulwant Singh, Mohali MLA
