Civic tenders in Chandigarh take a hit amid MC’s fund crunch

Facing acute fund crunch, the cash-strapped Chandigarh municipal corporation (MC) has not floated any new tender for new developmental-work related projects this month.

All the development related projects, including those approved in Finance and Contract Committee (F&CC) and General House of the MC--re-carpeting roads, laying of paver blocks, renovation or upgradation of community centres, beautification of market areas, toilets and cremation grounds, or horticulture related projects-- have been stalled due to financial crisis. Not only this, MC is also struggling to clear pending bills of contractual works. Bills amounting to over ₹10 crore are lying pending for clearance in the MC’s account branch alone.

The civic body is only able to pay monthly liability, including salaries and funds required for water supply and sewerage management, which run up to ₹60 crore per month.

The Chandigarh MC relies on funds from the UT administration as well as its revenue sources for its annual income. For the financial year 2024-25, the UT administration has allocated a grant-in-aid of only ₹560 crore to MC, a sharp cut from the demand of ₹1,651 crore. Given the annual committed liabilities of MC, which alone is around ₹500 crore, now, the MC is focusing on increasing its revenue to meet the shortfall of funds to maintain essential civic services, including roads, water supply, waste disposal and sewerage, but is struggling to do so at present.

“Due to general elections, the annual budget of the Union government is yet to be approved in the Parliament, due to which the full amount of allocated budget has not been released from the UT. As a part of the interim budget, ₹147 crore of GIA has been received by MC from UT for the first quarter, which includes monthly instalments of ₹65 crore for April, ₹41 crore for May and ₹41 crore for June. The money, however, has been utilised for some crucial tenders related to monsoon preparedness or road re-carpeting, thus again making us short of finances to initiate new projects,” said MC officials, adding that the situation will get better once the union budget will be approved and the amount will be released.

City mayor Kuldeep Kumar Dhalor said, “MC is trying to recover pending dues from people, in terms of water bills, garbage bills, property tax and from various other sources. No major project will be halted. We are managing to pay the monthly liabilities but we are working on increasing the MC’s own revenue. We are also requesting the UT administration to hand over control of RLA to MC, so that our revenue generation can be made better.”