Chandigarh MC financial crisis: What are the steps being taken to pull the civic body out of the situation?

The pending liabilities like salaries, pensions, utility bills which MC has to pay for 2018-19 are Rs 492 crore while its own receipts are Rs 171 crore.

Written by Hina Rohtaki | Updated: May 15, 2018 7:58:25 am
Chandigarh MC financial crisis: What are the steps being taken to pull civic body out of the situation? Chandigarh Municipal Corporation

What is the financial position of the Chandigarh Municipal Corporation?

The pending liabilities like salaries, pensions, utility bills which MC has to pay for 2018-19 are Rs 492 crore while its own receipts are Rs 171 crore. The total grant-in-aid which it has received from the UT Administration is Rs 267 crore. There is a shortfall of Rs 54 crore even for paying salaries, pensions and other necessary amount, not to talk of development works in the city amounting to Rs 250 crore. The corporation had passed a budget of Rs 910.76 crore for 2018-19 but it has been struggling to make payments to contractors for previous year’s works as well.

How did the corporation reach such a situation?

The corporation has remained static in generating revenue over the years. Its own receipts are just Rs 171 crore and it depends primarily on the UT Administration’s annual grant-in-aid for paying salaries too. Several properties of the corporation are lying vacant and there have been no takers for it despite repeated auctions. Mayor Davesh Moudgil said the UT Administration has not been giving MC’s share of revenue as per the Delhi Finance Commission’s recommendation which in 2010 recommended 17.5 per cent share and revised it to 30 per cent in 2014 in UT’s revenue. But the recommendation was not implemented.

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What is the impact of this financial crunch?

Major development works in the city – road recarpeting, laying of pipelines and other public health-related work have been stopped as the civic body has failed to make payments to contractors engaged with them. The MC owes over Rs 25 crore to the contractors. The road recarpeting work worth Rs 35 crore and all other development-related works have been put on hold. Contractors have stopped taking up new work as well. They have been holding protests against the MC outside its office in Sector 17.

Which are the major works affected?

Road recarpeting which had to be carried out in different parts of the city is on hold. Laying of Ductile Iron pipelines at Ramdarbar, Mauli Jagran, Manimajra and installation of paver blocks at Sector 22, Kajheri, Industrial Area Phase II and other parts of the city have been stalled by the contractors. Also, the work of laying sewerlines at Maloya Colony, Dhanas, Indira Colony and Manimajra has also been stopped.

How long is the deadlock between contractors and MC expected to continue?

Hari Shankar Mishra, a contractor, said they would not resume work or participate in any tender until their entire payment was made. The contractors have given six days’ time to the Mayor to pay their dues. If that does not happen, the contractors have threatened to suspend water supply from tube wells and lock public toilets, the maintenance of which is with most of them.

How can the civic body get immediate relief to tide over the situation?

MC officials and councillors have been demanding that the civic body can get immediate relief if the UT gives its 17.5 per cent share only, if not 30 per cent. The UT Administration’s revenue is around Rs 3,738 crore and 17.5 per cent would mean the corporation to get Rs 654.22 crore annually. The administration is also being asked to hand over excise department, RLA, stamp duty so that the revenue earned by them goes to MC. Increase in revenue at this stage is not possible as there has been stiff opposition from BJP and Congress against the increase in property tax, water tariff and other taxes, said a senior official.

What is the MC doing to manage the situation now?

Back-to-back meetings are being held with UT Administrator V P Singh Badnore to urge the administration to give MC its due share of the revenue. Both BJP and Congress are playing politics over the issue and have been meeting the Administrator separately. The first meeting was held with 12 BJP councillors from BJP chief Sanjay Tandon’s camp. The second was with Congress councillors and members of the party unit and now the Mayor and members of the Finance and Contract Committeee have met the Administrator separately. BJP Councillor Arun Sood said it would have been better had the Mayor call a special meeting of the House and all the councillors went to meet the Administrator together. He added that everyone should rise above party lines and pull the MC out of the crisis.

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