GHMC faces financial crisis

Hyderabad, November 01: With the elections just three weeks away, the Greater Hyderabad Municipal Corporation (GHMC) has plunged into a deep financial crisis.

The corporation, which is supposed to deposit salaries for its employees on Saturday, failed to do so due to financial problems.

Salaries are generally credited into the accounts of the employees on the first of every month. With November 1 being a Sunday, salaries are credited a day before.

Sources said a total of Rs 25 crore is required for payment of salaries, but GHMC could deposit only Rs 8 crore. Officials are trying to credit the balance amount by Monday by diverting other revenues.

Add to that, the civic body requires another Rs 25 crore for making election arrangements. It has written to the state government to release the amount but the latter is yet to respond.

GHMC has been facing financial problems for the last few months due to dwindling revenues and more commitments. In fact, it has already availed an overdraft of about Rs 500 crore a year ago due to financial crisis and various other commitments. And, bills worth about Rs 150 crore are yet to be paid to contractors for various works.

Though GHMC has been facing a cash crunch for the last few months, it could pay the salaries on time from property tax collections. While the target for property tax is Rs 650 crore for the current year, it could collect only Rs 210 crore so far. Collections showed a sharp decline in the last one week as the municipal staff are busy with election arrangements. Since the election process will go on till November 7, collections will be affected further. For improving the collections, the GHMC held a meeting with the top defaulters recently but it did not yield any result.

While the GHMC property collections are not up to their expectations, recently the chief minister asked the corporation to give 25 per cent of their tax collection to Hyderabad Metropolitan Water Supply and Sewerage Board (HMWS&SB) and deposit the same in an Escrow account.

Meanwhile, the corporation has sought Rs 112 crore from the state government for taking up road repair works. But the chief minister agreed to give only Rs 50 crore. “The state government has issued a GO for road repair works. But the amount is yet to be received by the GHMC,” an additional commissioner said. Moreover, government grants too have come down as the state government released only Rs 18 crore out of Rs 72 crore non-plan grant for the last year. This year, it got Rs 36 crore as non-plan grant.

Building Penalisation Scheme and Layout Regularisation Scheme – other majorsources of revenue – fetched about Rs 500 crore in one year, but these funds were diverted for ongoing projects of the corporation.