As coffers run dry, Chandigarh MC struggles to pay its outsourced staff

With 6,965 outsourced employees making up 71% of its workforce, Chandigarh MC seeks ₹30-crore grant in advance from UT to clear their salaries

Mired by a severe cash shortfall, the Chandigarh municipal corporation (MC) has reached a point where it is finding it impossible to even pay its outsourced staff, who form the majority of its workforce.

While salaries for regular employees have been cleared, Chandigarh MC is struggling to pay its outsourced staff, who are typically paid by the 7th of each month. (HT Photo)

With its 6,965 outsourced employees forming 71% of its 9,748-strong staff, MC has requested an advance grant of ₹30 crore from the UT administration for December to avoid further delays in salary payments.

While salaries for regular employees have been cleared, MC is struggling to pay its outsourced staff, who are typically paid by the 7th of each month.

As per MC officials, as of December 4, the civic body’s bank accounts held just ₹5.15 crore, leaving it unable to meet its total monthly liabilities of ₹75 crore.

Of this, outsourced staff wages take the largest share at ₹26 crore, while ₹16 crore are allocated for regular staff.

Amid the crippling cash crunch, MC is also struggling to meet other monthly obligations such as pensions ( ₹3 crore), its water and electricity bills ( ₹12 crore), maintenance works ( ₹11 crore) and fuel requirements ( ₹6 crore).

MC officials are hopeful the UT will release the December grant by next week, which will help avert further delays.

MC commissioner Amit Kumar said, “We sought advance grant from UT so that salaries of outsourced staff are not delayed. We are trying to recover MC’s pending arrears from various sources so that we can resume development works. In November, we collected around ₹1 crore as property tax and talks are underway with government departments to clear their pending dues.”

Notably, MC has already received ₹493 crore of its ₹560 crore annual grant from the UT, leaving just ₹67 crore to cover the December-to-March period.

To make matters worse, MC is set to fall short of its annual income target of ₹435 crore. In the first two quarters of the 2024-25 fiscal, MC managed to bring in only ₹176 crore from various income sources, such as property tax and water bills. It set a target of collecting ₹173 crore in the next two quarters — ₹86 crore short of its original annual target.

In May, the ongoing fiscal mess had forced MC to halt all development works across the city. Compounding its woes, even the UT administration has refused to release any additional grant.

For months, MC has been seeking additional grant of ₹200 crore from the UT administration, but UT administrator Gulab Chand Kataria has not announced any grant. Instead, he directed MC officials and councillors to curtail expenses and focus on improving MC’s own revenue generation.

Fiscal crisis to come up at next House meet on Dec 24

MC has scheduled its next General House meeting on December 24, with a sharp focus on strategies to boost revenue and revive stalled development projects. This meeting will also mark the final session under the tenure of current mayor Kuldeep Kumar Dhalor.

The pending agendas from the last House meeting will also be revisited, including a proposal to increase the rates for tertiary treated water and the sale of vacant land in Manimajra. These measures are being considered to secure immediate funds for MC, which has been grappling with a severe financial crunch.