Fund-starved Chandigarh MC fails to pay employees’ December salary

Mired by a severe financial crisis, the Chandigarh municipal corporation (MC) has failed to timely pay salaries to its regular staff and is now waiting for an advance grant from the UT administration to avoid further delays.

The MC has a total of 9,748 employees, including 6,965 outsourced employees. While outsourced staff wages take the largest share of MC’s monthly expenditure at ₹26 crore, ₹16 crore are allocated for regular staff.

In routine, the salaries to regular employees are disbursed on 30th or 31st of every month, but this time, the salaries could not be released with the MC struggling to even pay the rest of its monthly liabilities. Amid the crippling cash crunch, the MC is also struggling to meet other monthly obligations such as pensions ( ₹3 crore), its water and electricity bills ( ₹12 crore), maintenance works ( ₹11.5 crore) and fuel requirements ( ₹6 crore).

While salaries for regular employees have already been delayed, the MC will also struggle to pay its outsourced staff, who are typically paid by the 7th of each month.

“The MC has requested an advance grant of ₹30 crore from the UT administration for January to avoid further delays in salary payments. But with the MC just having ₹73 crore as total grant for the month of January, February and March, it is going to be really difficult for it to pay salaries for the next months. We are hopeful of getting the grant this week,” said MC officials.

Municipal commissioner Amit Kumar said, “We are dependent on UT’s grant at present are we are expecting the money soon. Looking at the condition, the salaries can be delayed in the coming months too. We are trying to recover MC’s pending arrears from various sources so that we can resume developmental works.”

Notably, the MC has already received ₹487 crore of its ₹560 crore annual grant from the UT, leaving just ₹73 crore to cover the December-to-March period.

To make matters worse, MC is set to fall short of its annual income target of ₹435 crore. In the first two quarters of the 2024-25 fiscal, MC managed to bring in only ₹176 crore from various income sources, such as property tax and water bills. It set a target of collecting ₹173 crore in the next two quarters — ₹86 crore short of its original annual target.

In May, the ongoing fiscal mess had forced MC to halt all development works across the city. Compounding its woes, even the UT administration has refused to release any additional grant.

For months, MC has been seeking additional grant of ₹200 crore from the UT administration, but UT administrator Gulab Chand Kataria has not announced any grant. Instead, he directed MC officials and councillors to curtail expenses and focus on improving MC’s own revenue generation.

The MC has been grappling with a severe financial crunch, forcing it to halt all development works since May and even putting long-pending road carpeting projects on hold. Such is the crisis that the corporation may not be able to even pay out staff salaries in the coming months. Punjab governor and UT administrator Gulab Chand Kataria directed MC officials and councillors to curtail the expenses and focus on improving the corporation’s own revenue generation.

Mayor Kuldeep Kumar Dhalor said, “We have requested the UT to release the entire pending grant of ₹73 crore and we are expecting the amount in the next 3-4 days. We will release the salaries as soon as the grant is received and we are working on increasing our own revenue too, so that a similar situation is not witnessed in coming months.”

Crippling cash crunch

In routine, the salaries to regular employees are disbursed on 30th or 31st of every month, but this time, the salaries could not be released with the MC struggling to even pay the rest of its monthly liabilities.

Curtail expenses, focus on improving revenue generation: Kataria

Punjab governor and UT administrator Gulab Chand Kataria directed MC officials and councillors to curtail the expenses and focus on improving the corporation’s own revenue generation.