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 around the neck of the Greater Hyderabad Municipal Corporation (GHMC).

Employees and workers of the GHMC have received salaries with 10 to 15 days’ delay in February, and sources attribute the same to the financial difficulties faced by the corporation. While the norm is to pay salaries by first or second day of every month, this time, even permanent employees were paid only on February 15.

While officials rubbish the claim of financial difficulties, insiders confirm that this is the first time after 1996 when salaries were paid this late.

Senior officials from the Finance department attribute the delayed payment to late submission of bills by the outsourcing agencies and other departments. Wages to Sanitation and Entomology workers were paid during the first week itself, they say, while linking the delay in salary payment to permanent employees with non-submission of income tax returns.

A glance through the revenue statement of the GHMC reveals that the expenditure on debt servicing has grown exponentially compared to the previous year up to February.

While the components of Interest on Municipal Bonds, HUDCO Loan Payment and provision for Sinking Fund remain constant for the two years, additional head of Interest on Rupee Term Loan has spiked up the total amount under debt servicing.

GHMC has availed the HUDCO loan for the double bedroom housing project, and the rupee term loan to fund the Strategic Road Development Plan (SRDP) under which several ongoing projects for flyovers, underpasses and elevated corridors have been taken up. Municipal bonds too, have been issued for funding the SRDP projects.

Interest on term loan, non-existent during previous financial year, has added up ₹67 crore to the financial burden this year up to February. The interest on HUDCO loan is higher by ₹5 crore compared to last year. Both these components have increased the debt servicing expenditure by about ₹73 crore.

At ₹143 crore, the expenditure on debt servicing has surpassed the budget allocation of ₹136.5 crore, even before the financial year came to an end.

Roads and road maintenance are two more components under which the expenditure has increased considerably. Up to February, ₹372 crore was spent on creating road infrastructure, against ₹300 crore spent during the previous year for the corresponding period.

Budgetary allocation of ₹200 crore was made this year for Comprehensive Road Maintenance Programme (CRMP), under which 709 kilometres of major road stretches were given for private maintenance.

However, the actual expenditure up to February has far exceeded the allocation, at about ₹310 crore.

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Printable version | Apr 16, 2021 7:36:02 PM | https://www.thehindu.com/news/cities/Hyderabad/debt-burden-lack-of-new-revenue-source-hit-ghmc/article33951444.ece

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