Bumpy ride ahead for Chandigarh MC with ₹560 crore graint-in-aid

With its annual committed liabilities alone standing at around ₹500 crore, Chandigarh municipal corporation will have to increase its revenue to meet the shortfall to maintain essential civic services

The cash-strapped Chandigarh municipal corporation is staring at another challenging year with the Union government on Wednesday allocating it a grant-in-aid of only ₹560 crore for the financial year 2024-25, a sharp cut from its demand of ₹1,651 crore.

This year, the civic body had requested the Chandigarh local bodies department to make a provision of ₹1,556 crore in revised estimates for 2023-24 and ₹1935.75 crore in budget estimates for 2024-25 exclusively for MC. (HT File)

With its annual committed liabilities alone standing at around ₹500 crore, MC will have to increase its revenue to meet the shortfall to maintain essential civic services, including roads, water supply, waste disposal and sewerage.

Even in the last fiscal (2023-24), the civic body had got a grant-in-aid of ₹555 crore, much lower than its demand of ₹1,332 crore. The year before, MC had sought ₹981 crore as grant-in-aid, but received ₹545 crore.

This year, the civic body had requested the Chandigarh local bodies department to make a provision of ₹1,556 crore in revised estimates for 2023-24 and ₹1935.75 crore in budget estimates for 2024-25 exclusively for MC.

In the estimates for 2024-25, the civic body had demanded ₹75 crore for road carpeting, ₹42 crore for legacy waste processing, ₹20 crore for setting up a temporary composting plant, and ₹55 crore for pension and arrear liabilities.

Delayed approvals from Centre adding to fund crisis

For years, MC has been requesting the UT administration to pursue the central government for implementation of 4th Delhi Finance Commission’s recommendations, which will provide it an additional grant of around ₹1,176 crore, solving its perennial fund crunch.

The 4th Delhi Finance Commission, in accordance with provisions under Section 84-A of Punjab Municipal Act, 1976, extended to Chandigarh, had recommended that Chandigarh MC should get 30% of the proceeds of collection from the Value Added Tax and local excise duties.

It had also suggested that MC get 100% collections of motor vehicle tax, together with motor vehicle registration charge; 25% of tax on sales or purchase or consignment of goods; and 100% of service tax collections and stamp duties mentioned in Union List.

Notably in August last year, the civic body had halted new tenders for development works after it had ring-fenced ₹282 crore from its funds for city’s waste management on the orders of the National Green Tribunal (NGT).

Following the orders, the mayor had requested UT administrator Banwarilal Purohit for more funds so that the city’s development would not suffer and finally on September 28, the UT administration released ₹25 crore of grant-in-aid ahead of schedule to allow the city’s development works to continue.

Mayor Manoj Sonkar said, “We always demand more funds for betterment of the city. For now, we will ensure proper utilisation of funds granted so that no development work is affected.”