Union Budget: Chandigarh MC alloted ₹545 cr, faces ₹714-cr deficit

The Chandigarh municipal corporation (MC) has been allocated ₹545 crore as grant in aid (GIA) for the coming fiscal.

Though ₹43 crore more than the allocation in the last year’s budget, it is well short of the MC’s demand for ₹981 crore (including ₹23 crore reimbursement of the electricity duty) from the UT administration for 2022-23.

Even though the MC budget puts the deficit for coming fiscal at ₹278 crore, with the administration getting much less GIA allocation in the Union Budget than that assumed, now the deficit will be ₹714 crore as the civic body starts the new financial year.

As per the MC budget, passed by the General House on Tuesday, revenue is estimated to be ₹1,448 crore with an assumption that it would get ₹981 crore as the GIA. The MC pegged its own receipts at ₹616 crore, while the expenditure is estimated to be ₹1,725.19 crore for 2022-23.

In the last year’s budget too, the MC was allocated ₹502 against the civic body’s projection of ₹1,202 crore. It had been calculated as per the Fourth Delhi Finance Commission’s report in 2014, which had recommended an allocation of 30% of the UT’s revenue to the MC.

The MC has been struggling to start new development projects in the last couple of years, and had a hard time paying salaries to its employees because of fund crunch. The administration had to release additional funds to bail out the civic body by covering its both revenue and capital expenditure needs.

For instance, the MC got ₹50 crore for carrying out infrastructure development in villages added to its jurisdiction in 2019. Another ₹50 crore works are to be carried out by the administration in these villages.

Even though successive mayors have assured that additional stream of revenue, like receipts from the Registration and Licensing Authority (RLA), would be given to the MC, but it hasn’t materialised yet. Last year, the MC had prepared ₹1,646 crore budget. As per its budget proposal, it was to earn ₹469 crore from its own receipts but as per revised estimates for current fiscal, it would earn ₹444 crore only. Most of its revenue streams like water tariff have remained stagnant.

As a consequent of low GIA against the budgetary demand, the MC is likely to constrict its spending on development works in the coming fiscal. The capital expenditure has been reduced to ₹401 crore under the budget estimates 2022-23. In the last budget, it was ₹448 crore.

MC commissioner Anindita Mitra said: “We will improve our systems, plug leakages, recover arrears and implement our proposed projects, such as new petrol pumps, to maximise our receipts.”

Meanwhile, unlike the previous two House meetings that saw ruckus by opposition councillors, Tuesday’s special meeting called to pass the budget proposal went off peacefully. Even though the Congress and AAP councillors raised questions over several provisions and on the water tariff hike, the budget was passed without any opposition.

Mayor Sarabjit Kaur said: “The corporation has got ₹43 crore more GIA for the next financial year compared to the current fiscal. We will request the administration to give 70% of the increased allocation to it by the Centre to the MC. We will also meet the Home Minister for implementation of the commission’s recommendations. Ours is pro-people budget. We will get the water tariff hike cancelled.”