UT releases ₹40 crore to MC, regular staff to get salaries today

The UT administration on Thursday released a grant of ₹40 crore to the cash-strapped Chandigarh municipal corporation (MC), which will now be able to pay the December salary to its staff.

The development comes a day after Hindustan Times had highlighted that the MC failed to pay its employees for the month of December due to the fund crunch.

“The MC has already received ₹487 crore of its ₹560 crore annual grant from the UT till December. On Thursday, ₹40 crore was received, and the salaries of the regular staff will be released by Friday,” said MC officials.

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

In routine, the salaries of regular employees are disbursed on the 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.

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 of 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.

Though the MC will manage to clear the salaries of December, it will face significant challenges in the remaining months of the fiscal year as it is left with just ₹33 crore for the period of February and March.

To make matters worse, the 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, the MC has been seeking an additional grant of ₹200 crore from the UT administration, but 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.