Centre approves Rs 125 crore for Chandigarh Municipal Corporation

The Government of India has approved a much-needed Rs 125 crore for the Chandigarh Municipal Corporation, providing relief to the civic body facing a severe financial crisis. The approval letter was handed over to Mayor Harpreet Kaur Babla by Punjab Governor and UT Administrator Gulab Chand Kataria at Raj Bhavan today.

The Mayor thanked the Administrator for his efforts in securing the funds, which she had been pursuing for a long time. She had even met Union Home Minister to raise the issue.

The Finance Department of the Administration on August 14, 2025, wrote a letter to the Ministry of Home seeking its approval for diversion of Rs 125 crore from its own earnings and savings to the civic body. The administration devised a new way — re-appropriation of the amount — to help the MC after its earlier demand for the additional fund was not approved by the Centre.

The department requested the Centre to approve the proposal for re-appropriation from Head of Materials and Supplies to Grants-in-Aid (General)) amounting to Rs 125 crore. The re-appropriation of funds was processed considering the availability of savings within the same section. The administration has no power to divert the amount on its own. That’s why it required the approval of the MHA to divert its own money to the MC.

This dire financial situation has paralysed the city's progress, affecting essential services and infrastructure. All the developmental works have been halted. The MC has failed to re-carpet the roads for years or increase its revenue despite taking multiple steps. Even street light replacements are unaffordable. Due to the crisis, no new projects have started in the past two years. No tenders for development works have been floated. The civic body has been struggling with committed liabilities and expenditures, leaving it with no funds for developmental works.

The financial crisis had affected maintenance of city parks, with payments to Resident Welfare Associations pending for months. Public toilets also remain in dire need of repair.

The approved funds are expected to provide some relief to the MC and help it resume developmental works.