E-Paper
What ails Chandigarh MC and how city’s development has taken a hit
Delhi finance commission in 2014 revised UT’s revenue share from the administration revenue to 30%. But, far from it, MC is currently paid not more than 8%.
In February, mayor Davesh Moudgil passed Rs 910.76 crore budget for 2018-19 (April-March), out of which Rs 250 crore was earmarked for big projects. But the civic body is struggling in just the second month of the fiscal year. The development projects have been put on hold and contractors have stopped ongoing works as payments are pending. What has made the situation worse is political slugfest among the factions of Chandigarh BJP and as general elections approach, introducing new taxes or increasing rates of existing ones becomes a tricky affair. HT finds out what ails the MC and what is the way out of this mess.
What is MC’s current bank balance?
As of May 7, the MC has just Rs 90 crore in its accounts. It includes Rs 67 crore received from the UT against its first quarterly grant on Friday and Rs 19 crore as the fixed deposit. MC is expecting another Rs 20 crore by June from its internal resources.
Is the situation extremely bad?
It is, as MC commissioner Jitender Yadav has said that whatever amount MC has in bank account is only sufficient to pay salaries and utility bills, which is worth Rs 42 crore a month. They haven’t stopped payments of outsourced employees, but their full payments are not cleared, as alleged by the contractors.
What is the impact?
Major casualty is road works. Re-carpeting work worth Rs 35 crore scheduled for 2018-19 has been put on hold. Estimates worth Rs 20 crore to lay territory water pipelines is not going to be executed anytime soon. Works on constructing new community centres has been postponed. Then other important works like replacing old water pipeline or upgrading storm water lines are not on the priority list now. Major problem is the delay in execution of already allotted works. Road works worth Rs 20 crore allotted last year is not executed so far because the MC hasn’t released payments to road contractors. Contractors engaged with public health and horticulture department too have threatened to stop work due to their pending payments, which has accumulated to over Rs 25 crore now.
How MC got here?
The stagnancy in MC’s share in UT revenues is the prime reason. MC is getting certain percentage of UT’s annual revenue for looking after city’s civic development because the revenue generation department is under the control of the UT administration. This percentage was revised by the Delhi finance commission, as in 2010 it recommended 17.5% share and revised it to 30% in 2014. But the Union ministry of finance that manages UT’s finances did not implement these recommendations and systematically reduced this grant over the years. MC is currently paid not more than 8%, which is just
Rs 269 crore per year where as it is entitled for at least Rs 1,100 crore per year if 30% share is allotted. UT’s yearly revenue is over Rs 3,500 crore.
How can the situation be turned around?
Increase in MC’s share in UT revenues is the only viable solution left since both the ruling BJP and Congress are averse to the idea of burdening city residents with more taxes. MC officials were trying to increase water tariff and house tax but mayor is not keen on it. The MC commissioner is of the view that MC should try to get a share in goods and service tax, stamp duty and motor vehicle tax, all under UT’s control, if it does not get its due share as per Delhi finance commission’s recommendations . The commissioner also suggested the sale of MC’s vacant properties but local realty market is not upbeat.
What about internal resources?
MC has failed to increase its internal resources. Its water tariff is lowest in the tricity now. The councillors often block avenues of revenue generation, latest being the parking row where MC is set to lose Rs 15 crore if the contract is cancelled, as promised by the mayor. While Congress and BJP blame each other for the current situation, both have failed to improve MC’s finances.
What about wasteful expenditure?
In the past, councillors have wasted money on study tours and public functions. Then they gave a whopping Rs 50 crore contract to a firm only for sanitation of southern sectors, which according to the officials is on the higher side.
What is BJP and Congress stance on this?
BJP Member of Parliament Kirron Kher is not inclined towards new taxes, as anything that burdens people will play into the hands of Congress before the general elections due in 2019. She supported the decision of her party’s mayor, who is close to her, to roll back hike in parking fee that has now jeopardised the contract with the firm and loss of more revenue for the MC. She has not yet taken much initiative in pushing the MC’s case with the Centre. Former city MP from Congress, Pawan Kumar Bansal, has blamed the BJP for this mess and asked them to get MC’s due share from the Centre. He said despite UT being a revenue surplus state, MC’s bad condition is ironical.
Is the current mayor doing enough?
Moudgil says he has already met UT administrator and will soon meet Union home minister who takes all the administrative decisions regarding UT, to increase MC’s revenue and take its share to at least 17.5%. His rivals, including from his own BJP, say he has not done anything. He is also charged of being inaccessible and not listening to people’s grievances, which he has denied. Congress leader of opposition Devinder Babla has sought intervention of the UT administrator and seeks a meeting with all the stakeholders.
