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Finances in doldrums: Chandigarh MC stares at empty coffers by next month

With Centre refusing bailout, MC chief says civic body will barely manage to pay salaries, carry out development works with current resources.

punjab Updated: Apr 07, 2018 12:55 IST
Vivek Gupta
Vivek Gupta
Hindustan Times, Chandigarh
Finances in doldrums,Chandigarh MC,empty coffers
A section of officials in the MC said there might be delay in disbursal of committed expenditure from June, as income from internal sources — such as water bills — is generated every alternate month while the Centre’s grant comes on quarterly basis.(HT File )

The Chandigarh municipal corporation is staring at a financial crisis with its coffers set to get empty next month. Confirming it, MC commissioner Jitender Yadav said: “The fixed deposits have come down to Rs 19 crore from nearly Rs 200 crore. These too will be used up in May for payment of salaries and other committed expenditure.”

While hinting that development works will be affected, Yadav said the situation has plunged to a level where “we can barely manage salaries and other committed liability this fiscal” from the MC’s existing resources.

A section of officials in the MC said there might be delay in disbursal of committed expenditure from June, as income from internal sources — such as water bills — is generated every alternate month while the Centre’s grant comes on quarterly basis.

“The only solution that I see for MC’s sustainable survival is increase in internal resources and prudence in expenditure. All the councillors are aware of this matter,” said Yadav.

Why MC is in the red?
  • No increase in central grant: While the MC’s expenditure has been increasing, it has not received adequate grant-in-aid from the Centre. It is getting not more than 10% share in the UT resources against 30% mandated under the Delhi finance commission recommendations.
  • Weak internal resources: The civic body has failed to increase revenue from its internal resources. It has further increased its revenue deficit and put burden on fixed deposits.
  • Wasteful expenditure: The MC has been accused of splurging on public functions and study tours for its councillors and officers. Officials confess that its sanitation contract worth Rs 50 crore per annum in southern sectors is on the higher side.

Centre gives rude shock

Another bad news for the MC is that the Centre has refused to bail it out from its current fiscal mess. The civic body gets its revenue mainly from two heads — its earnings from internal resources and the Centre’s grant-in-aid, which is basically its share in the UT’s revenue. A senior MC official confirmed that there has been no increase in the Centre’s grant. Last year, the MC got Rs 269 crore. The figure remains the same for 2018-19.

This has come as a rude shock to the MC, which passed Rs 910-crore budget for 2018-19 budget, hoping for an increase in the central assistance. But the gap between projected expenditure and available funds is not set to bridge.

“Financial prudence is utmost required now,” said the MC commissioner.

No money for maintenance

The MC is not expected to earn more than Rs 450 crore in 2018-19 (including central assistance) where as its annual committed liability is already over Rs 550 crore, including salary, pension, utility bills and maintenance work.

An official in the MC’s engineering department, who did not wish to be named, said the civic body is struggling to clear its pending liability to contractors. The amount has soared to Rs 7 crore.

“Earlier we were managing the expenditure from fixed deposits. But as these too are on the verge of exhaustion, we fear that we will not be able to carry out road recarpeting or general maintenance,” said the MC engineer.

First Published: Apr 07, 2018 12:55 IST