09-05-2025
No GST grant for 2 months, NMC faces financial crisis
Nagpur: The
(NMC) is facing a severe financial crunch after failing to receive the mandatory goods and services tax (GST) compensatory grants from the state govt for two consecutive months—April and May—of the current financial 2023–24, NMC received a monthly GST grant of Rs137 crore.
Tired of too many ads? go ad free now
For the 2024–25 financial year, the civic body anticipated an 8% hike, expecting monthly grants to rise to Rs148 crore. However, not a single rupee was disbursed in the first two months, severely impacting the NMC's ability to meet its financial to NMC accounts and finance department officials, the civic body's average monthly expenditure is Rs148 crore. This includes salaries, pensions, electricity and water bills, and crucial payments to private agencies like AG Enviro and BVG India for door-to-door waste collection. Additionally, it covers remuneration for contract-based staff, including security guards, computer operators, and ex-servicemen deployed in the nuisance detection squad.A senior official, speaking on condition of anonymity, said the NMC so far managed to meet its financial obligations for April and May by dipping into its reserve funds, covering an estimated Rs296 crore. However, the situation remains financial stress has already begun to show. Pension disbursement to retired employees, typically done on the first of each month, was delayed and only released on May 8. "If GST grants continue to be delayed, even employee salaries will be at risk," the official within NMC link the disruption in funds to the state govt's populist spending ahead of the upcoming assembly elections. "While the govt is announcing freebies, it is failing to release even the committed grants to urban local bodies. Rather than offering giveaways, the focus should be on long-term schemes to build employment skills for young women, farmers, and other marginalised groups," said the delay has raised serious questions about state govt's fiscal discipline and its commitment to supporting civic bodies at a time when cities are grappling with mounting service demands.
