Chandigarh MC’s pending liabilities climb to ₹100 crore

The municipal corporation (MC)’s committed liabilities, and outstanding bills have climbed to a whopping ₹100 crore for 2024-25 fiscal year amid its deepening financial crisis.

While the February salaries of its regular and outsourced staff have already been delayed, it may struggle to pay the March salaries too.

Other outstanding dues include pension payments, electricity and water bills, contractor payments, maintenance work, fuel costs and other committed liabilities, MC officials revealed.

Development projects in the city have been stalled since May 2024 due to the civic body’s inability to meet its financial obligations.

“Bills totaling ₹100 crore are currently pending in the accounts branch of the MC. Some bills are yet to be compiled, which means the figure is likely to be higher,” officials privy to the matter said.

After delays in salary payments in January and February, the situation persisted in March, with the MC confirming that regular staff salaries will not be disbursed until a grant is received from the UT administration. If no funds are allocated by March 15, the civic body may have to explore alternative ways to meet its liabilities, including loans from government or institutes.

“If no grant is received from the UT, the MC will be left with no other option but to take loan from government or other institutes,” said officials.

Though the Punjab governor and UT administrator Gulab Chand Kataria had on February 22 assured that surplus funds from the FY 2024-25 budget would be transferred to the MC after approval from the Union government, no immediate financial support has materialised as of now. The fund allocation, if approved, is unlikely to come before March 15, leaving the MC in a precarious position.

MC focuses on recovering property tax dues

While the UT administration has bailed it out with additional grants on several occasions, the MC is now making efforts to recover pending property tax arrears from the institutes and generate revenue from its own sources.

Commercial and government buildings alone owe the corporation a whopping ₹250 crore in property tax/ service tax, which is a major source of its annual revenue. However, from the total amount, ₹187 crore remains in litigation or is disputed. The list of defaulters runs long, with around 650 buildings of the Punjab, Haryana, Himachal Pradesh and central governments in Chandigarh. Even the UT administration is yet to clear their tax dues.

Other major defaulters include autonomous institutes like Post Graduate Institute of Medical Education and Research (PGIMER), Panjab University (PU), and Punjab Engineering College (PEC) and the three institutions owe a total of ₹123.13 crore. But, despite repeated meetings with the institution heads, no respite came to MC.

The PGI had requested MC to conduct a survey of their properties and reconcile the tax dues. On Tuesday, MC reconciled the data and slapped another notice to PGI, to clear at least ₹12 crore in the next 15 days.

On the other hand, PEC recently submitted ₹2 crore dues and is also asking for reconciling the tax dues. In the case of PU, the MC had requested it to initially pay ₹29 crore out of the total dues, but the institute is yet to pay anything.

After the recent court hearing, the Chandigarh Golf Club has also formally requested MC to reconcile its property tax dues.

The MC has already issued property attachment notices to three institutes to recover outstanding property tax dues. As a part of its legal strategy, the civic body has directed the institutions to declare their movable and immovable assets, so that further legal action of sealing the properties can be done.

Others plans to increase revenue

As part of its plan to enhance revenue generation from its own sources, the civic body is set to auction 6.8 acres of land in Manimajra for a housing project and another two acres for a hospital.

Additionally, it is also considering private partnerships under revenue-sharing models for multiple projects. These include the operation and maintenance of five of the city’s busiest community centers, upkeep of roundabouts, and advertising rights for public toilets, unipoles, and roundabouts. The civic body is also looking at revenue-sharing models for the city’s smart parking project.

The move is aimed at strengthening the financial position of the MC while ensuring better maintenance of public infrastructure.