Chandigarh admn releases full grant-in-aid, MC still expected to fall short of funds

UT administration has released ₹125 crore for the second quarter of the current fiscal, which is the full due amount

The UT administration has released ₹125 crore as grant-in-aid (GIA) to the municipal corporation (MC) for the second quarter of the current fiscal.

Recently, the UT had junked its request for the release of ₹90 crore as additional grant for the current fiscal. The additional grant was sought in lieu of the estimated loss in revenue on account of stay on hike of water tariff. (HT FILE PHOTO)

Belying concerns in the MC for a cut in the GIA, the administration has released the full due amount. UT officials said there would be no cut in the GIA for the last quarter too.

The release of funds has given the much-needed financial relief to the MC. Recently, the UT had junked its request for the release of ₹90 crore as additional grant for the current fiscal. The additional grant was sought in lieu of the estimated loss in revenue on account of stay on hike of water tariff.

“Even though we are getting the full GIA for July, August and September, the MC will still be short on funds for taking up new development works. The GIA will go in for revenue expenditure like salaries, establishment costs, etc.,” said an official of the MC.

Regarding the MC facing a financial crunch, mayor Ravi Kant Sharma had recently met UT adviser Dharam Pal and had raised the issue of the pending ₹40 crore grant for developmental works in 13 villages. He had also requested the adviser to follow up with the Union home ministry on the issue regarding the release of grants to the MC as per the Delhi Fourth Finance Commission recommendations, besides expediting handing over the Registration and Licensing Authority to the MC, and settling the issues of Chandigarh Housing Board on the Delhi pattern.

₹50 crore for village development released earlier this year

The UT had approved an annual GIA of ₹502 crore in its budget of 2021-2022 for the MC. In the first quarter also, it had released the full due amount. Earlier this year, the UT had released ₹50 crore for village development in addition to the GIA.

The corporation started the current fiscal with a deficit budget of ₹670 crore. The finances of the MC received a major setback when the UT administration decided to stay the hike in the water tariff till March 2022: the civic body was expecting to earn an additional revenue of ₹90 crore from the hike, which was imposed in October last year.

“Even though the administration has released the dedicated funds for road recarpeting, village development, and increased the GIA by ₹50 crore over the last fiscal year, the MC is still struggling to start new development works as it is running a deficit budget,” said the MC official.