Corpn struggles to pay staff salaries

KEY PROJECTS MAY TAKE A BACK SEAT

Corpn struggles to pay staff salaries

Komal.Gautham@timesgroup.com

Chennai:15.07.2021 

Greater Chennai Corporation between April and July collected ₹130 crore more in property tax than in the same period last year. But its bank overdraft increased, from ₹250 crore (in 2018) to ₹450cr (in January 2021), dues to contractors are ₹200cr and its debt rose from ₹2,200 crore to ₹2,500 crore.

This means projects funded by capital funds in education, health care and solid waste management will take a back seat as has been happening for more than eight years.

Post 2014, ‘spending’ on projects and taking huge loans for big ticket projects that are neither good in quality nor improve citizens’ lives have led to this financial crisis, says activists.

The corporation’s income comes from property tax (₹720 crore), professional tax (₹350cr) and about ₹720 crore in central and state finance commission grants apart from ₹19 crore as trade licence renewal and ₹240 crore in parking fee, rents and other user charges.

While no major revenue mechanism has been created in the past 10 years, projects like smart parking and ‘onstreet parking’ got stuck due to Covid. The property tax revision rollback in February 2020 took a huge toll on finances.

“Right now, paying ₹80 crore-₹100 crore in salaries every month is a herculean task, with ₹10 crore going for interest payments. Bank overdrafts have crossed ₹500cr. We improved a little in 2019 after tax revision but are back to where we were in 2018,” said an official.

Activists say the corporation has been announcing big ticket packages taking huge loans from external agencies.

“Some projects are important but it’s the manner in which they are awarded and implemented that puts a big financial burden,” said Jayaram Venkatesan of Arappor Iyakkam, an anti-graft NGO. “Most new drains and roads scrape off every year notwithstanding the 3-year maintenance period,” Venkatesan added.

A former IAS official who worked with the corporation said there are many ways the civic body can improve its finances instead of resorting to cost cutting.

“Many recommendations have been lying idle since 2009,” he said.