Debt burden, lack of new revenue source hit GHMC

Increasing debt burden coupled with no new sources of revenue is proving to be a millstone across the neck of the Greater Hyderabad Municipal Corporation (GHMC).

Employees and staff of the GHMC have acquired salaries with 10 to fifteen days’ delay in February, and sources attribute the identical to the monetary difficulties confronted by the company. While the norm is to pay salaries by first or second day of each month, this time, even everlasting staff had been paid solely on February 15.

While officers garbage the declare of monetary difficulties, insiders verify that that is the primary time after 1996 when salaries had been paid this late.

Senior officers from the Finance division attribute the delayed cost to late submission of payments by the outsourcing companies and different departments. Wages to Sanitation and Entomology staff had been paid through the first week itself, they are saying, whereas linking the delay in wage cost to everlasting staff with non-submission of revenue tax returns.

A look via the revenue assertion of the GHMC reveals that the expenditure on debt servicing has grown exponentially in comparison with the earlier 12 months as much as February.

While the parts of Interest on Municipal Bonds, HUDCO Loan Payment and provision for Sinking Fund stay fixed for the 2 years, extra head of Interest on Rupee Term Loan has spiked up the full quantity beneath debt servicing.

GHMC has availed the HUDCO mortgage for the double bed room housing mission, and the rupee time period mortgage to fund the Strategic Road Development Plan (SRDP) beneath which a number of ongoing initiatives for flyovers, underpasses and elevated corridors have been taken up. Municipal bonds too, have been issued for funding the SRDP initiatives.

Interest on time period mortgage, non-existent throughout earlier monetary 12 months, has added up ₹67 crore to the monetary burden this 12 months as much as February. The curiosity on HUDCO mortgage is greater by ₹5 crore in comparison with final 12 months. Both these parts have elevated the debt servicing expenditure by about ₹73 crore.

At ₹143 crore, the expenditure on debt servicing has surpassed the funds allocation of ₹136.5 crore, even earlier than the monetary 12 months got here to an finish.

Roads and highway upkeep are two extra parts beneath which the expenditure has elevated significantly. Up to February, ₹372 crore was spent on creating highway infrastructure, towards ₹300 crore spent through the earlier 12 months for the corresponding interval.

Budgetary allocation of ₹200 crore was made this 12 months for Comprehensive Road Maintenance Programme (CRMP), beneath which 709 kilometres of main highway stretches got for personal upkeep.

However, the precise expenditure as much as February has far exceeded the allocation, at about ₹310 crore.