Tough road ahead for Chandigarh MC as Rs 156-cr grant dries up

Development activities have come to a halt as the Municipal Corporation (MC) has exhausted Rs 156 crore it received as the first instalment of the grant-in-aid for 2025-26. The cash-strapped civic body is unlikely to meet its expenses with the stipulated budget.

Of the Rs 156 crore received as part of the grant-in-aid, Rs 56 crore has been set aside for the pension fund, an amount previously diverted to pay salaries. After paying the April salaries, the MC will be left with little to cover wages for May and June. Officials warn that salaries disbursement may be affected in June unless additional funds are received.

Facing a severe financial crunch, the MC had earlier withdrawn Rs 50 crore from its employees’ pension fund to clear the salaries for February both for regular and outsourced staff. Another Rs 6 crore was withdrawn to clear electricity bills of the Kajauli water works to avoid a penalty of Rs 11 lakh for the delayed payment.

There is some hope for the civic body raking in some additional funds from the property tax collection, which is open till May 31. The civic body is offering up to 20% rebate to encourage timely payments and expects to collect over Rs 30 crore by the deadline. However, even this may not be enough to cover rising operational costs.

Given the current fiscal situation, the MC had been counting on 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.

Mayor Harpreet Kaur Babla said she would leave no stone unturned to procure funds for development works that have been remained stalled for nearly a year.

The Mayor said she would again meet Union Home Minister Amit Shah to get additional funds for the corporation, as they were not able to provide basic civic amenities to the people in the current constraints.

To generate revenue, the Mayor said the corporation was also planning to sell nearly 6.9 acres of prime land in Pocket 6 of Mani Majra in Sector 13 for a housing project. The MC is expecting to earn more than Rs 500 crore from the sale of the land parcel, which has been reserved for a residential project under the Chandigarh Master Plan. The MC has already completed its ground survey, which includes land verification, identification of existing encumbrances and assessment of underground services at the site.

Will meet Shah again: Mayor

Mayor Harpreet Kaur Babla said she would again meet Union Home Minister Amit Shah to get additional funds for the corporation. She said the corporation was also planning to sell nearly 6.9 acres of prime land in Pocket 6 of Mani Majra in Sector 13 for a housing project. The MC is expecting to earn more than Rs 500 crore from the sale of the land parcel, which has been reserved for a residential project under the Chandigarh Master Plan.