Chandigarh suffers ₹240 crore revenue loss in first half of fiscal year

While the Chandigarh administration has set an ambitious revenue target of ₹6,112 crore this fiscal, it has managed to collect only ₹2,815.94 crore (46.07% of the target) in the first six months (April 1 to September 30, 2024). This represents a 1.48% decrease from the same period in 2023, when ₹2,815.04 crore was collected against a target of ₹5,918.93 crore.

The UT administration has suffered a revenue loss of ₹240 crore in the first half of the 2024-25 fiscal, data from the Comptroller and Auditor General of India (CAG) has revealed. This even as the city is already witnessing a slowdown in development and maintenance works due to the municipal corporation’s financial crisis.

The capital expenditure, which include funds designated for development projects and asset creation, have also been come down-- from ₹722 crore in 2023 to ₹655 crore in 2024. (HT File)

While the UT administration has set an ambitious revenue target of ₹6,112 crore this fiscal, it has managed to collect only ₹2,815.94 crore (46.07% of the target) in the first six months (April 1 to September 30, 2024). This represents a 1.48% decrease from the same period in 2023, when ₹2,815.04 crore was collected against a target of ₹5,918.93 crore.

A senior UT official said the reasons for the revenue dip include a more competitive excise policy in Punjab and shifting of businesses to neighbouring towns such as Mohali and Panchkula, which has impacted GST and sales tax revenue. Additionally, revenue from stamp duty has dipped due to a Supreme Court ban on floor-wise sale of property in heritage sectors (Sectors 1 to 30), according to the officer.

The CAG report also reveals that UT’s primary deficit, i.e the difference between the current year’s fiscal deficit and the interest payment on the earlier borrowings, has climbed from ₹894 crore during the corresponding period in 2023 to ₹931 crore this time. This deficit is largely due to the lower-than-expected revenues from goods and services tax (GST), sales tax, and excise duty, which constitute a major part of UT’s revenue.

The UT’s spendings have also seen a slowdown with the expenditure standing at ₹3,493.83 crore (59.04% of the total budget of ₹5,858.62 crore) against last year’s ₹3,528.85 crore (62.6% of the total budget of ₹5,636.71 crore) during the corresponding period.

The capital expenditure, which include funds designated for development projects and asset creation, have also been come down-- from ₹722 crore in 2023 to ₹655 crore in 2024. This suggests UT has limited its capital on infrastructure development this year.

UT finance secretary Hargunjit Kaur was not available for comments despite repeated attempts to reach her.

RK Garg, president of the Second Innings Association, said, “I have repeatedly raised the need for financial prudence, but the administration has failed to effectively manage its finances, resulting in a loss of public funds.”

He added that the UT should introduce better policies to attract capital and promote business and employment within the city. The UT administrator should monitor the current practices more closely and convene a meeting with financial experts to address these issues,” he said.