Shah assures Mayor of speedy resolution to MC financial crisis
Expressing concerns over the financial crisis faced by the Municipal Corporation (MC), Union Home Minister Amit Shah has assured Mayor Harpreet Kaur Babla that he would speak with Punjab Governor and UT Administrator Gulab Chand Kataria to find out an immediate resolution to the problem.
The Mayor today met Shah in Delhi and raised the critical financial situation of the MC. She apprised the Home Minister of an urgent need for the release of funds as per the recommendations of the 4th Delhi Finance Commission (DFC) and requested an interim solution based on the 3rd DFC recommendations until a final resolution is reached.
Since the 4th DFC report was adopted in 2014, the MC has been repeatedly urging the Chandigarh Administration and the Ministry of Home Affairs (MHA) to implement it. However, the matter remains unresolved, forcing the corporation to struggle financially, she said.
According to the 4th DFC, the MC is entitled to a share of various taxes, including 30% of value added tax (VAT) and local excise duties; 100% of motor vehicle tax and registration charges; 25% of tax on sales, purchase or consignment of goods; and 100% of service tax collections and stamp duties.
Despite these provisions, the MC has received only Rs 560 crore in grant-in-aid (GIA) for FY 2024-25. “This significant shortfall has affected the corporation’s ability to maintain essential services such as road repairs, beautification of parks, sanitation and waste management, and street lighting,” she added.
The MC manages 2,000 km of roads, which includes repairs and construction of 270 km stretches annually; maintains 1,800 neighbourhood parks and more than 100 large ones, installs open-air gyms for residents; carries out citywide sanitation, garbage collection and processing, and stray animal control etc. The corporation funds repairs and maintenance of streetlights on all major roads without financial support from the Chandigarh Administration, said the Mayor.
“The MC primarily earns through property tax and water bills, but major defaulters include government departments. Many cases are stuck in legal disputes,” she added.
Given the rising expenditures on salaries, pensions, electricity bills and development projects, the Mayor requested Shah for an immediate release of additional Rs 200 crore to cover essential costs for February and March. She also urged him that starting FY 2025-26, the grant-in-aid be released quarterly instead of monthly to ensure better financial planning and stability.
