Chandigarh: Cash-strapped MC looking to raise ₹410 crore from own sources in 2025
Pinning its hopes on more relocation of funds from the Centre on the 4th Delhi Finance Commission recommendations, Chandigarh municipal corporation has drafted an annual budget of ₹2,114 crore
With limited grants from the Centre and UT administration, the cash-strapped Chandigarh municipal corporation (MC) is aiming to generate a total of ₹410 crore for upcoming financial year 2025-26, from its sources, to meet its liabilities.
Pinning its hopes on more relocation of funds from the Centre on the 4th Delhi Finance Commission (DFC) recommendations, the civic body has drafted an annual budget of ₹2,114 crore. The budget was presented to the finance and contract committee (F&CC) of the MC on Thursday, and will be presented in the budget House meeting on February 17.
As per the draft budget, MC had demanded ₹1,704 crore from the Centre as grant, ₹9 lakh as electricity duty, and is projecting to generate ₹410 crore from its own sources, taking its total budget to ₹2,114 crore.
But, with the UT administration allocating only ₹625 crore for MC from the Union Budget on February 1, the civic body will face a deficit of ₹1,079 crore. The civic body is once again set to find itself on a tightrope walk, with the funds insufficient to cover its committed liabilities of around ₹900 crore, which include staff salaries, pensions and water/electricity bills—expenditures that cannot be ignored.
‘Revenue projection decreased from last year’
The MC had passed a ₹2,325 crore budget for financial year 2024-25, and had targeted to generate ₹633 crore from its own sources. But, MC revealed in the new budget that the revised estimate receipts in 2024-25 could only be ₹347 crore. In light of this, for the coming fiscal, MC has brought down the target to ₹410 crore. However, no major change can be seen in revenue collection. Also, MC’s total expenditure is estimated to be ₹1,664 crore, a lesser from 2024-25’s estimate of ₹1,885.3 crore.
For 2025-26, MC plans to spend ₹467 crore in capital head (used for carrying out development work in the city) and ₹1,197 in revenue head (committed liabilities like salaries, wages, pensions and others).
MC had announced ₹420 crore last year for carrying out developmental works, but amid the fiscal crisis, the civic body could spend only ₹139 crore in 2024. The financial strain has left MC struggling to pay salaries to both regular and outsourced staff, leaving it totally dependent on a grant from the administration to help it tide over. The new tenders are at halt since May 2024.
Adding to the mess, the Union government has yet to release a revised budget for MC for FY 2024-25, even though a similar estimate for the UT administration has already been cleared. The administration had sought ₹200 crore specifically for MC, but no approval has been granted as of now.