Guest Column: Chandigarh municipal corporation finances in a morass

The MC’s budget for FY 2024-25 left an uncovered deficit of ₹200 crore. Surprisingly, against an approved expenditure of ₹1,100 crore ( ₹960 crore under revenue head and ₹150 crore as capital expenditure), the receipts are only ₹910 crore, including ₹560 crore as grant from the UT administration and ₹350 crore from its own receipts.

The governor’s refusal to release extra funds to the Chandigarh Municipal Corporation (MC) to meet a shortfall of ₹200 crore in its budget for financial year (FY) 2024-25 raises some pertinent questions and a situation that needs to be addressed without delay.

The common refrain of the Chandigarh UT administration is that the MC must augment its own resources. (HT File)

The almost total drying up of funds with the MC is having a telling impact on the upkeep of city roads and parks, cleanliness and other public services of the City Beautiful. In the absence of regular recarpeting of roads as per the normal schedule, many internal roads are ridden with potholes and parks present a picture of neglect, challenging the image of the city that aspires for excellence as a Smart City. Even the ubiquitous paver blocks are, at many places, covered with wild growth of grass.

The MC’s budget for FY 2024-25 left an uncovered deficit of ₹200 crore. Surprisingly, against an approved expenditure of ₹1,100 crore ( ₹960 crore under revenue head and ₹150 crore as capital expenditure), the receipts are only ₹910 crore, including ₹560 crore as grant from the UT administration and ₹350 crore from its own receipts. There was no clue to the ways and means of meeting this deficit, forcing the mayor to seek this amount as a special grant-in-aid from the UT administration when, half way through the fiscal, he found the MC in an embarrassing predicament of its inability to meet even the routine and committed expenditure.

The common refrain of the Chandigarh UT administration is that the MC must augment its own resources. This was perhaps the reason for approving a ₹200 crore deficit budget. Not wholly disputing the basis of such an advice or a directive in general, one must not fail to appreciate that no revenue generating departments have been transferred to MC and it also does not get any share in the electricity duty. Presently, while the MC incurs the expenditure on roads that bear the burden of about 50,000 new motor vehicles every year, the registration charges and road tax revenue accrue to the Chandigarh administration. Other than the house tax, water charges, some revenue from advertisements and licence fee from street vendors, no other meaningful source of revenue vests with the MC.

An expenditure of ₹493 crore during the first half of the fiscal represents more than 54% of the total budgeted (approved) expenditure. And only ₹59 crore was spent on capital works, a woefully small amount for developmental works in a city like Chandigarh. In a situation of such acute financial crunch, the people of Chandigarh cannot even imagine the undertaking of any new development works by the MC. The MC has already explored and enforced some means of augmenting its resources. Sewerage cess on water bills, a euphemism for ‘toilet tax’ was introduced sometime back and house tax was also hiked. It charges parking fee in some markets, licence fee for taxi stands and for use of community centres. Apni mandis that cater to the needs of the common man, also pay a licence fee. These are not adequate to meet the growing needs of the city. Therefore, it will be just and in the fitness of things that, in the spirit of 74th Amendment, the Registration and Licensing Authority (RLA) is transferred from the transport department to the MC.

That said, the MC, on its part, must see some merit in the governor’s stand. While imposition of any new tax or levy, by whatever name called, will only burden the common citizen and should be avoided, there is certainly a scope of cutting all wasteful expenditure. Also, the quality of works executed is often shoddy, recarpeting of roads is washed off at places after a single rainfall and the seemingly stainless-steel waste receptacles have lost their sheen and are getting rusty. No accountability is fixed and the concept of third-party audit is totally absent.

Booths constructed years back for a fish market in Sector 43 and for general trade at other places are lying unallotted or sold for want of attractive terms of transfer. Open spaces in front of eateries can be permitted to be used in an aesthetic manner and for a fee. Judicious use of spaces for advertisements will also rake in some additional revenue. The MC can even levy a fee on cable operators and internet service providers for use of trees for supporting their cables till the time Chandigarh becomes a totally ‘wired city’ with no overhead wires.

Given the entire conspectus of MC’s responsibilities and financials, various pertinent issues that today impede its working, should not run into a morass of political or bureaucratic positioning.

(The writer, three-time MP from Chandigarh and former Union minister, is a veteran Congress leader. pkbchd@gmail.com)