Chandigarh MC seeks Rs 200 crore grant from UT to restart projects

The Municipal Corporation (MC) has approached the UT Administration for an additional grant of Rs 200 crore to restart stalled development projects across the city.

In a letter to the Secretary, Local Bodies Department, the MC Joint Commissioner outlined the corporation’s financial struggles, highlighting a 121% rise in expenditure over the past decade compared to a modest 70% increase in grant-in-aid during the same period.

The letter pointed out that despite the constitutional amendment, the MC has not received control over any revenue-generating departments, a factor that has severely limited its financial autonomy. Additionally, the recommendations of the 4th Delhi Finance Commission were yet to be implemented, and the MC was still awaiting its Rs 40 crore share of electricity duty as budgeted for the 2024-25 fiscal.

The implementation of the 7th Central Pay Commission further compounded financial pressure, with increased pay allowances, pension for regular staff and higher wages for contractual and daily wage employees. The MC has also faced rising costs due to the revision of DC rates in Chandigarh.

While the MC was striving to enhance its income and cut costs, the limited scope of new taxes without burdening public constrained its options. The Administration allocated Rs 560 crore in grant-in-aid for the current financial year, against the MC’s projected demand of Rs 1,651.75 crore. So far, Rs 387 crore has been released on a monthly basis.

However, the Joint Commissioner noted that the bulk of these funds was consumed by recurring expenses, leaving little money for development works. The MC is also grappling with committed liabilities of around Rs 70 crore per month.

Mayor Kuldeep Kumar Dhalor has planned to convene a special House meeting around October 15 over growing financial crisis in the MC due to which no new tender has been issued since May. During a House meeting held on September 26, BJP councillors had expressed a concern over the halted progress.