NMC in deep financial crisis, income dips to mere 41%

Source: The Hitavada      Date: 27 Nov 2017 10:22:44


Special Correspondent,

Empty coffers badly affect developmental works in city

Ruling party convenes a special meeting on December 2 to discuss financial crisis

Corporators unable to get funds for devpt works in prabhags

With massive drop in its income, inability to tap new revenue sources, Nagpur Municipal Corporation is finding itself in deep financial crisis as its income has dipped to mere 41% of projected income throwing its planning haywire. This massive drop in the civic body’s income has rattled the NMC administration and ruling party alike as almost entire development works in the city are likely to come to a grinding halt.

Monthly committed expenditure of the civic body is Rs 105 crore and during current fiscal, the NMC is able to generate only Rs 78 to Rs 80 crore. Unable to bridge this revenue gap, the NMC is expecting a liberal financial aid from State Government under Goods and Services Tax (GST) and also sustainable revenue share from the property tax. Chief Minister Devendra Fadnavis has ruled out any further enhancement in monthly financial aid to NMC while asking the administration to improve financial planning and find out new ways to generate income.

To discuss these revenue issues and financial crisis, the ruling Bharatiya Janata Party (BJP) has organised a special general body meeting on December 2. Some tough decisions are expected to be taken during this brain-storming meeting.

Recently, the Accounts and Finance Department of the NMC had given a paper to top-brass of the civic body clearly explaining in detail about the poor financial condition of the civic body. This eye-opening report has revealed that the NMC will require additional Rs 30 to Rs 35 crore per month to maintain the fine balance between committed expenditure and developmental works. The Standing Committee has presented the budget of Rs 2,266 crore of the financial year 2017-2018 before the general body. However, the civic administration has generated only Rs 941 crore against the projected income.

NMC has demanded Rs 89 crore per month from the State Government against GST to give salary to the employees and for meeting the monthly committed expenditure.

The NMC will require to generate a sum of Rs 105 crore per month for incurring the expenditure towards salary, payment to the contractors, committed expenditure and other necessary expenses. The State Government is giving Rs 51.36 crore every month to the civic body against GST. The disbursement in July was Rs 42.44 crore while in August it was highest Rs 60.28 crore.

However, from September to November, the allocation is Rs 51.36 crore only. The recovery from property tax is low and other departments failed to contribute notable amount in the kitty of the local body. Therefore, the NMC is fully dependent on the support of the State Government through GST.

The corporators are running from pillar to post to get sanction to their development works for their prabhags. The civic body does not have funds to sanction these developmental works from the fix priority of the corporators.

Sandip Joshi, Ruling Party leader of NMC while talking to The Hitavada agreed that the income of the civic body has reduced to critical level. He said, “We are trying our best to improve the financial condition. The State Government is helping the NMC and we are demanding to increase the share under GST. It is necessary to plug the loopholes for the better financial management. Therefore, we have organised a special meeting on December 2 to discuss these problems to improve the financial condition, Joshi stated.”
Municipal Commissioner has strictly warned that zonal commissioners and department heads directing them not to clear files without considering the budgetary allocation.

The committed expenditure of the local body is around Rs 85 crore, this includes Rs 34 crore towards monthly salary, Rs 10 crore for pensioners, Rs 8 crore against electricity bill, Rs 2.25 crore for raw water, Rs 8.50 crore for OCW, Rs 1.10 crore towards petrol and diesel, Rs 85 lakh for security and telephone expenditure, Rs 1.50 crore for advance payment, Rs 5 crore for payment of loan, Rs 3.50 crore to Kanak Resources, Rs 2.70 crore against government dues, Rs 3.50 crore against JNNURM funds, Rs 30 lakh for the payment of private vehicles, Rs 1 crore for lighting maintenance, Rs 42 crore against EMI for Kanhan, Gorewada water works. NMC will require additional Rs 30 crore to make payment of suppliers, contractors for their on-going works. Therefore, civic administration has suggested to increase grants under GST from the State Government and also improve recovery under property tax, market, sanitation cess and other sources of revenue. The local body will have to take austerity measures to reduce the other expenditure.