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Chandigarh administrator calls meet on Jan 28 to discuss MC’s fiscal woes

By, Chandigarh
Jan 24, 2025 09:54 AM IST

Discussions on MC’s ongoing financial challenges and its budgetary demands for the upcoming fiscal to come up at meeting

In response to municipal corporation’s severe financial crisis that has halted development works across the city since May 2024, Punjab governor and UT administrator Gulab Chand Kataria has called a meeting with the civic body on January 28.

This meeting follows a series of past encounters where MC officials had sought financial assistance from the administrator, only to be told to focus on increasing their own revenue streams rather than relying on external funding. (File)
This meeting follows a series of past encounters where MC officials had sought financial assistance from the administrator, only to be told to focus on increasing their own revenue streams rather than relying on external funding. (File)

The meeting, which will include senior MC officials, aims to discuss the financial challenges facing the corporation and finalise its budgetary demands for financial year 2025-26, ahead of the Union budget announcement.

This meeting follows a series of past encounters where MC officials had sought financial assistance from the administrator, only to be told to focus on increasing their own revenue streams rather than relying on external funding.

Despite the ongoing crisis, including delays in paying staff salaries, the administrator has been emphasising the need for cost-cutting measures and self-sufficient revenue generation.

MC facing 42-cr salary liability with just 33cr left in coffers

The financial strain has left MC struggling to pay salaries to both regular and outsourced staff, leaving it totally dependent on a grant from the administration to help it tide over.

Adding to the mess, the Union government has yet to release a revised budget for MC for FY 2024-25, even though a similar estimate for the UT administration has already been cleared.

The administration had sought 200 crore specifically for MC, but no approval has been granted.

So far this fiscal, MC has received 527 crore of its 560-crore annual grant, leaving just 33 crore to cover the February and March period, even as its monthly salary liability alone stands at 42 crore.

Amid the crippling cash crunch, MC is also struggling to meet other monthly obligations such as pensions, its water and electricity bills, maintenance works and fuel requirements.

“During the upcoming meeting, officials will provide updates on revenue generation efforts and plans, and will discuss how to ensure that staff salaries are paid. Additionally, officials will put forward a demand for a grant-in-aid for FY 2025-26,” said MC commissioner Amit Kumar.

According to sources, MC plans to request 1,704 crore as grant-in-aid for the next fiscal, including funds to implement the 4th Delhi Finance Commission recommendations and reimbursement of electricity duty, which is not currently being paid by the UT administration.

For FY 2024-25, MC had requested 1,651.7 crore as grant-in-aid, but only 560 crore was approved by the Union government.

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