Chandigarh MC to withdraw Rs 50 cr from pension fund to pay salaries

Facing a severe financial crunch, the Municipal Corporation (MC) has decided to withdraw Rs 50 crore from its employees’ pension fund to clear the pending salaries of its regular and outsourced staff.

Struggling with mounting liabilities, the MC had been waiting for additional grants from the UT Administration. Punjab Governor and UT Administrator Gulab Chand Kataria had assured that surplus funds from the UT’s current annual budget would be allocated to the MC after the Centre’s approval.

However, no funds have been announced yet, leaving the MC with no choice but to arrange finances on its own.

The MC has failed to pay salaries to its 9,748 employees, including 6,965 outsourced workers, on time. Regular employees, who are paid by the 30th or 31st of the month, have been awaiting their salaries for February. Similarly, outsourced workers, usually paid by the 7th, are unpaid till date.

The monthly salary bill stands at Rs 26 crore for outsourced workers and Rs 16 crore for regular employees.

Until yesterday, the MC had been exploring a Rs 50 crore loan and had initiated discussions with the Chandigarh Housing Board, government institutions and banks to secure credit at the lowest possible interest rate. However, officials decided to withdraw the money from the pension fund.

Mayor Harpreet Kaur Babla confirmed that they had decided to withdraw Rs 50 crore from the pension fund and all employees will receive their salaries by Saturday evening.

The amount will be deposited back with interest as soon as they receive the grant-in-aid for the fiscal year 2025-26 in the first week of April, she added.

Earlier, MC had withdrawn Rs 6 crore from its employees’ pension fund to clear electricity bills of the Kajauli water works to avoid a penalty of Rs 11 lakh for the delayed payment.