Staff Reporter

It has a debt of 70 cr. on various heads

VIJAYAWADA: The finances of the Vijayawada Municipal Corporation (VMC) seem to have gone for a toss. The Corporation owes a debt of about Rs. 70 crore on various heads, including for the works taken up with general funds and under Jawaharlal Nehru National Urban Renewal Mission (JNNURM).

The Corporation has to clear bills to the tune of Rs. 40 crore to contractors for the works taken up under JNNURM programme, while another Rs. 30 crore will have to be paid to other government departments like Commercial Taxes.

The contractors who have executed works under JNNURM are making rounds to the Corporation enquiring about their pending bills, as the Corporation has not cleared the same for more than a month and a half. They are sceptical of the Corporation’s capability to clear their dues and are making enquiries with the officials in this regard.

As the contractors are “agitated and anxious” about the dues, Municipal Commissioner P.S. Pradyumna held parleys with them a couple of days ago and reportedly assured them that their bills would be cleared in due course. Mr. Pradyumna tried to persuade them to continue the works.

Though the VMC collects Value Added Tax (VAT) from the contractors while paying the bills, it has not been transferring the same to the Commercial Taxes Department. It has not been adhering to the procedure reportedly because the “funds are being utilised for some other purposes” and also on account of paucity of funds. Other amounts like seigniorage fee and library cess have also not been paid to other departments, official sources admit.

The Corporation’s finances have gone into a state of disarray during the last few months for various reasons. So much so that it was unable to pay the salaries for the last two months as per schedule. The Corporation requires at least Rs. 12 crores a month to meet the operation and maintenance costs, including payment of salaries of employees, wages of workers and payment of electricity bills.

The VMC officials say that development works taken up under JNNURM had a spell on the finances. The Corporation, to keep the momentum of JNNURM works, had diverted the general funds for the purpose. But, the State government has not been releasing its share on time. The situation is “likely to worsen” if the Corporation does not receive the dues like non-plan grants pending with the State government, officials say.


VMC finances in doldrumsNovember 26, 2013