Revenue static, challenges galore for Chandigarh MC
Hoping for additional funds from the Centre under the 4th Delhi Finance Commission (DFC) recommendations, the MC had sought ₹1,704 crore in grants, ₹9 lakh as electricity duty, and projected ₹410 crore from its own sources.
The financially strained Chandigarh Municipal Corporation (MC), led by BJP mayor Harpreet Kaur Babla, on Monday passed a ₹2,114-crore budget for the financial year 2025-26. However, with revenue barely covering committed liabilities, the civic body is set to struggle with no funds left for development work in the city.
Hoping for additional funds from the Centre under the 4th Delhi Finance Commission (DFC) recommendations, the MC had sought ₹1,704 crore in grants, ₹9 lakh as electricity duty, and projected ₹410 crore from its own sources. However, the UT administration has only allocated ₹625 crore from the central budget, announced on February 1, leaving the civic body in a dire financial situation.
“Even if the MC manages to generate 100% of its projected revenue ( ₹410 crore), the total funds will reach only ₹1,035 crore. With annual revenue expenditure at around ₹1,197 crore—covering salaries, pensions, and utility bills—the MC will have no funds for development works, despite a budgetary allocation of ₹467 crore for capital projects,” said Congress councillor Gurpreet Singh Gabi.
In 2024, the MC had announced ₹420 crore for development projects but managed to spend only ₹139 crore due to the financial crunch. The situation has worsened to the extent that salary payments to both regular and outsourced staff have been delayed, and the civic body remains entirely dependent on grants from the UT administration. With new tenders stalled since May 2024, development in the city remains at a standstill.
Revenue projection, capital expenditure decreases
The MC had passed a ₹2,325 crore budget for financial year 2024-25 and had targeted to generate ₹633 crore from its own sources. But the MC revealed in the new budget that the revised estimate receipts (actual generation) in 2024-25 could only be ₹347 crore.
For the coming fiscal, the MC is aiming to generate ₹410 crore, with most of the sources being property tax and water bills.
“As per the Punjab Municipal Corporation (Extended to Chandigarh) Act, 1994, the MC should be given its shares of the stamp duty levied on those properties, tax on vehicles, tax on electricity, and entertainment tax”, said BJP councillor Saurabh Joshi.
Also, MC’s total expenditure is estimated to be ₹1,664 crore, a lesser from 2024-25’s estimate of ₹1,885.3 crore.
For 2025-26, the MC plans to spend ₹467 crore in capital head (used for carrying out development work in the city) and ₹1,197 in revenue head (committed liabilities like salaries, wages, pensions and others).
The MC had announced ₹420 crore last year for carrying out developmental works, but amid the fiscal crisis, the civic body could spend only ₹139 crore in 2024. 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. The new tenders are at halt since May 2024.
‘Rough road ahead; expect stringent measures soon’: MC Commissioner
Municipal commissioner Amit Kumar said, “With limited revenue, it is going to be a rough road ahead for the MC and we will be incapable of even paying salaries to the staff. Though we are repeatedly demanding additional grants from UT, no grant has been received till date and if the situation persists till March 15, be ready to face stringent measures.”
‘Talks on to increase revenue from UT, Centre’: Mayor
City mayor Harpeet Kaur Babla said, “I have already initiated talks with the Centre to give MC its share according to 4th Delhi Finance Commission recommendations. Also, several other plans have been made to increase revenue. I have arranged a meeting of councillors with the UT administrator on February 21 to discuss the financial situation.”