To pay salaries, civic agencies ‘borrow’ from PF of employees

In a bid to pay salaries to its employees, the municipal corporations may have emptied out the employees provident funds account.

In a bid to pay salaries to its employees, the municipal corporations may have emptied out the employees provident funds account.

The municipal corporations may have emptied out the employees provident funds account.

Municipal sources suggest that the while the North Delhi Municipal Corporation has used approximately Rs 400 crore, its eastern counterpart has used around Rs 190 crore of the employee PF accounts.

The municipal officials claim the transfer of funds are internal borrowing, a practice the corporations have followed for several years.

“The practice is like a fallback during financial crisis. The funds are transferred back to the employees provident funds account as and when the grants/revenue is received,” said a senior municipal official.

Sources in the civic body said that even though the practice has been continued for several years, it has never affected the salary or payment to the employees after retirement.

“The provident funds are a collection of employees salaries and as only a limited number of people retire every year the funds are transferred back into the accounts of the respective employees,” a high-ranking official said.

He added that the activity is followed across all agencies and not a new practice.

The unions in the municipal corporation claimed that will apprise the high court about the situation on Wednesday.

“These funds are savings of the employees and the municipal authorities have no right to willfully transfer them. We will explain the severity of the situation to the high court and hopefully, it will decide in our favour,” said Sanjay Gehlot, president, Swatantra Mazdoor Vikas Sanyukt Morcha.

North and East Delhi Municipal corporations have been under a severe financial crunch for over an year which has led to continuous delay in salary payments of employees. The continuous delay had also led to a 13-day strike in the municipal corporation, bringing key municipal services to a complete standstill. Although the employees had called off their strike temporarily on Monday, the final call on the stir will be taken on Wednesday.