Crisis, apathy & need for new MC revenue sources
India, May 28 -- "It is time to wind up the Chandigarh municipal corporation", a casual remark from a highly placed and well-connected friend at a recent social function, struck me hard. I remonstrated explaining how the municipal corporation (MC) had helped groom local leadership, strengthen democracy and how residents' welfare associations and ward committees were effective in getting local development and upkeep works done. He insisted that his was a widely shared opinion and that the civic services in the city were in a shambles.
He lamented the "poor" condition of roads, parks and sanitation, in particular.
This opinion, coming from a well-informed citizen, who has lived here since his student days in the early 1960s, compels me to reflect on the various facets of the Chandigarh MC operations.
Grappling with a severe fiscal crisis, the MC looks after roads and walkways, sanitation public health works, solid waste management, sewage disposal, water supply, street lighting, parks, community centres, cremation grounds and parking lots besides operating fire stations and issuing birth and death certificates.
In the budget estimates for the current financial year (FY), 2025-26, against an approved budget of Rs.2,114 crore, the MC's own projected revenue is a mere Rs.410 crore. It had sought to meet the deficit of Rs.1,704 crore as grant-in-aid from the UT administration, but the latter only sanctioned Rs.625 crore. A certain casualty of this will be the development works.
This is not an occasional shortfall but a chronic, structural problem. Services such as sanitation, public health, roads, parks, community centres and public toilets are critical for urban living but do not operate on a profit-making or even cost-recovery model.
While the property tax is a stable and predictable source of municipal income (raised by 100% last month), there is no scope for increasing other charges without imposing undue hardship on the public.
Presently, while the MC incurs the expenditure on roads that bear the burden of over 50,000 new motor vehicles every year, the registration charges and road tax revenue accrue to the UT administration, and the registration and licensing authority remains with the administration. Without a fundamental re-evaluation of major departmental responsibilities and devolution of 30% of UT's revenue, as recommended by the 4th Delhi Finance Commission, the MC's capacity to invest in critical infrastructure and improve public services remains severely constrained.
The Union government only meets a small part of the deficit through annual financial assistance in the form of grant-in-aid through the administration. It's pertinent to note that Chandigarh's residents contribute significantly more to the Consolidated Fund of India in the form of various taxes than the allocations sanctioned for the UT.
The severity of the MC's financial predicament reached a critical point when it was compelled to withdraw funds from its pension fund account to meet salary obligations a few months back.
Whether it be the garbage receptacles, bollards supporting garden light posts, or the road gullies, all are in a bad shape. Then, there is an overdose of paver blocks in the city, not only obstructing water percolation in soil and increasing run off during rains but also incurring heavy expenditure. These have become the biggest source of wasteful expenditure as there is hardly a stretch which is smooth, not overtaken by wild growth or adequately restored after digging for laying of cables or pipes.
A good initiative to erect topiaries in parks has resulted in total wastage of funds; without required bush plantations, the mild steel wire fabricated structures have broken down and present an unseemly picture. Different areas also often complain of muddy or no water supply.
With over 9,500 personnel, the MC could be a prime example of high-quality service delivery.
The financial and operational challenges (such as the functionaries not being answerable to the mayor) within the MC carry significant and far-reaching implications for its long-term viability and autonomy as an "empowered" vibrant institution of local self-government.
A gradual decline in public infrastructure and the overall quality of civic services directly impact the living standards of Chandigarh's residents, ultimately leading to widespread citizen dissatisfaction and erosion of its institutional integrity.
The administrator's recent approval to the corporation's proposal to sell seven acres of its land for a modern residential and commercial complex will rake in a handsome amount of money but this will be just a one-time measure and tantamount to selling "family silver" for non-development purposes.
The corporation must pursue new and sustainable revenue sources. This includes exploring user charges for specific, non-essential services, leveraging advertising rights on municipal properties, aesthetic additional sign boards on shops, fees on cable operators and internet service providers for hanging loose wires on trees, building two banquet halls, renting out of all commercial booths lying vacant for years, and even preparing organic compost from abundant horticulture waste. Simultaneously, efforts must be directed towards improving the efficiency of property tax collection, particularly from the defaulting public sector institutions.
The corporation has taken steps to rationalise staff by laying off about 300 employees above the age of 60 and has approached the UT Administration to convert the position of about 3,000 outsourced employees to sanctioned posts to provide them job security.
The reported move to conduct a manpower audit through the Indian Institute of Public Administration should also help the corporation adopt a phased approach to establishment optimisation without any social disruption compromising with efficient service delivery.
However, strict measures to control non-essential expenditures across all departments are not visible.
The brief, one-year tenure of the mayor's post also significantly affects the MC's operational environment. It is time to amend the law and introduce direct mayoral elections for a five-year term under a 'Mayor-in- Council' system with executive authority essential for the corporation to truly serve its purpose. Hope the Government of India cares....
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