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Fund-hit Chandigarh MC denied grant-in-aid in one go

Development hit: Will get quarterly instalment of Rs 67 crore in a week, monthly expenses on salaries, pension alone stand at Rs 41 crore.

punjab Updated: Apr 18, 2018 14:17 IST
Vivek Gupta
Vivek Gupta
Hindustan Times, Chandigarh
Chandigarh MC,Chandigarh civic body,fiscal scenario
The civic body gets its share in form of grant-in-aid on quarterly basis for running and maintaining the city’s civic infrastructure and services. (HT File )

In further trouble for the cash-starved municipal corporation, the Chandigarh administration has refused to release its annual share from the Chandigarh revenues in one go.

The civic body gets its share in form of grant-in-aid on quarterly basis for running and maintaining the city’s civic infrastructure and services.

This arrangement has been in place ever since the municipal corporation (MC) came into existence in 1996, as the entire revenue collected from the city goes into the UT’s exchequer. A portion of it is then released to the MC to meet its expenses. The MC recently got a major blow when the Union finance ministry — that controls the UT’s finances — did not make any increase in the grant-in-aid for 2018-19, keeping it at Rs 269 crore, same as the last fiscal.

This made the MC seek the entire grant in one go to earn some additional interest income.

It would have also facilitated the civic body in meeting its monthly committed liabilities of Rs 41 crore, including salaries and pension, after its fixed deposits (FDs) — that amounted to Rs 500 crore in 2013 — dwindled to Rs 19 crore this year.

However, as municipal commissioner Jitender Yadav confirmed, the administration would be releasing the grant-in-aid on quarterly basis, as earlier, which was communicated to him in a recent meeting.The first instalment of Rs 67 crore for April-June quarter is expected in a week.

‘Need alternative means’

“Given the current fiscal scenario, we will have to look for alternative means to increase revenue from internal resources,” said Yadav. A senior official of the UT administration, who did not wish to be named, said releasing the grant in one go is not possible as the UT gets it share of budget on quarterly basis, as decided by the Centre.

“Moreover, time has come for the MC to rely on its internal resources to sustain expenditure,” he said.

The internal resources mainly include collection from water bills and house tax.

Development works in the city have already taken a massive hit. As reported by HT last week, road recarpeting work allotted last year has been stopped and the MC did not clear the agenda for this year. There are no funds left to construct new community centres and repair water pipelines.

Just the committed liabilities are pegged at Rs 550 crore a year, while the MC’s revenue, including grant, is Rs 440 crore. Mayor Davesh Moudgil said the MC should get Rs 600 crore annually as per recommendations of the finance commission, which have not been implemented since 2013.

First Published: Apr 18, 2018 14:17 IST