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Chandigarh administration to release ₹25 crore for cash-strapped MC
Mayor had approached the administrator for grant-in-aid funds in advance for cash-starved civic body to allow development works to continue
In major respite for the cash-strapped Chandigarh municipal corporation (MC), the UT administration has announced to release ₹25 crore of grant-in-aid ahead of schedule, city mayor Anup Gupta said on Friday.
On August 30, MC was forced to stall tenders for development projects till at least December after it ring-fenced ₹282 crore from its funds for city’s waste management on the orders of the National Green Tribunal (NGT).
Following this, mayor Anup Gupta had met UT administrator Banwarilal Purohit for more funds so that city’s development would not suffer.
“The administrator had assured me to resolve the issue. On Friday, we sought advance against the third instalment of grant-in-aid share from the administration, which amounts to ₹135 crore. Of the total instalment, which is due in December, the administration has assured to release ₹25 crore in advance,” mayor Anup Gupta said.
The mayor assured that city’s development will not be stopped at any cost and that the municipal corporation was committed to serving the people of the city.
For the financial year 2023-24, Chandigarh MC has an allocated budget of ₹ 1,886.30 crore. Chandigarh administration had earmarked a grant-in-aid of ₹555 crore for this financial year and out of this, MC has already received ₹ 310 crore up to second quarter.
MC commissioner Anindita Mitra had on August 30 ordered, “As per orders of NGT to ensure availability of funds to the extent of ₹282 crore, MC has ring-fenced this amount from its funds available under various heads, including funds allocated under capital head. Therefore, in interest of financial prudence, no new tender shall be floated except those of emergent nature, till further orders.”
The order meant that MC will not initiate even the approved development-related projects, at least till December, including those of road carpeting, paver blocks, back lanes and renovation or upgrade of community centres and toilets. The order came at a critical stage when the BJP-run Chandigarh MC is bracing for the Lok Sabha polls next year.
Delayed approvals from MHA adding to fund crisis
Though the advance payment of grant-in-aid will serve as a stopgap measure, what will really come as a breather for MC is implementation of 4th Delhi Finance Commission’s recommendations.
It has been more than four years since the issue has been pending for consideration with the Union ministry of home affairs (MHA), resulting in Chandigarh MC’s 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.
As per a rough estimate for the financial year 2021-22, the civic body could have got an additional ₹1,176 crore if the recommendations were implemented.
Then, MHA is also sitting on releasing electricity duty to MC that is currently going to the consolidated funds of India.
The UT administration as well as MC officials have taken up the matter with the ministry several times, but its nod remains pending. If approved, Chandigarh MC can get at least ₹600 crore every year, which will solve the financial crisis, officials familiar with the matter said.
MC commissioner Anindita Mitra said, “The matter has been taken up by UT administration with the MHA multiple times, but the approvals are awaited.”
