Chandigarh, March 12 — Struggling with a severe cash crunch, the Chandigarh Municipal Corporation (MC) is considering taking a ₹50 crore loan to pay February salaries before Holi. This would be the first time in the civic body’s history that it has had to borrow funds for employee wages.
The MC had been relying on financial support from the Chandigarh administration after Punjab Governor and UT Administrator Gulab Chand Kataria assured on February 22 that surplus funds from the UT’s 2024-25 budget would be transferred post-Centre’s approval. However, with no confirmation yet and an expected announcement only around March 15, the MC is now exploring alternative solutions.
Talks have begun with government institutions, including the Chandigarh Housing Board, and banks to secure a loan at the lowest possible interest rate. Officials mentioned that while loans from government institutions may carry an 8% interest rate, banks could offer more competitive terms. Collateral may also be required.
“We wish to disburse pending salaries before Holi. The MC is exploring a ₹50 crore loan for a month at the lowest possible interest rate, which will be repaid once the 2025-26 grant-in-aid is disbursed in April,” said Municipal Commissioner Amit Kumar. He added, “While this may provide temporary relief, additional financial support from the Centre and the Chandigarh administration is necessary to manage our liabilities.”
With 9,748 employees, including 6,965 outsourced workers, the MC requires ₹26 crore monthly for outsourced staff wages and ₹16 crore for regular employees. Typically paid by the end of each month, February salaries remain pending. Payments for outsourced staff, due by the 7th of each month, are also overdue.
Beyond salaries, the MC is struggling to meet other expenses, including pensions, utility bills, maintenance work, and fuel costs. Development projects have been stalled since May 2024, with no new tenders floated since then.
The civic body has been seeking an additional ₹170 crore grant for months, but approval is still pending.
During the January 30 mayoral polls, BJP president Jatinder Malhotra had announced that the Centre had approved a ₹92 crore special grant following Harpreet Kaur Babla’s victory. However, the funds are yet to be released, adding to the MC’s financial woes.
