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The Chandigarh Municipal Corporation (MC) faces a financial crunch with an annual expenditure of ₹1,885.3 crore. Despite this, Punjab governor and UT administrator Banwarilal Purohit approved the MC's budget for 2024-25. The approval came three months after a contentious budget meeting where the MC House passed the budget with a grant-in-aid increase of only ₹5 crore from the previous year.

The budget approval process was controversial. AAP mayor Kuldeep Kumar Dhalor presented the budget directly to the MC's general House, bypassing the finance and contract committee (F&CC). This move faced strong opposition from BJP councillors. As a result, the UT administration had to pass an interim budget of ₹300 crore for April, May, and June.

Financial struggles and hope for grants

The MC hopes to generate ₹633 crore from various income sources this year, up from ₹530 crore last year. However, the corporation still faces a significant deficit. During the March 6 meeting, the MC House passed a ₹2,325-crore budget, which included an approximate deficit of ₹1,131 crore. The MC requested ₹1,651.7 crore in grant-in-aid (GIA) for the fiscal year, but the Union government allocated only ₹560 crore in the interim budget. Consequently, the UT administration decided not to provide additional grants to cover the deficit.

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Monthly committed liabilities for the MC amount to around ₹70 crore. With only an interim budget available, the MC struggled to fund new projects or pay pending bills. Key liabilities include employee salaries, wages, pension benefits for retired employees, and other office expenses.

MC’s budget procedure issue

While approving the budget, Purohit noted that the MC erred in its budget-passing procedure on March 6. Although the municipal commissioner provided an explanation, the UT administration found it contrary to the required procedure based on legal advice. Despite this, the UT administration accepted the explanation as a one-time measure. Purohit emphasized the need for the MC to follow the prescribed procedures as per the MC Act in the future.

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The budget was ultimately approved due to the urgent need for funds to meet essential requirements. The MC's financial challenges highlight the importance of adhering to proper procedures and securing adequate funding for smooth operations.