Dip in lease rent and property tax collection is reported to have derailed wage disbursal of temporary and casual workers in Corporations and municipalities.
Demonetisation has rendered a severe blow to the 93 municipalities and six Corporations, especially about 80 per cent of the municipalities that are striving hard to manage their finances and pay the salaries of regular employees in time.
Municipalities and Corporations rely on property tax and lease rent to meet their major expenses. Lease rent is collected from the eighth day of every month. Following the curbs in collecting Rs.1,000 and Rs.500 notes, the collection in both the heads have come down drastically.
Collection comes down
The average collection under these heads has come down from Rs.4 lakh to Rs.5 lakh a day to Rs.25,000. The worst sufferers are the casual and temporary workers. They may have to wait till the month end for drawing their wages, sources said.
In the absence of a specific direction from the State government about accepting currency notes that are no more legal tender, the urban local bodies have decided not to collect taxes from Friday. If the crisis continues for more than a week, the financial crisis in municipalities that are already in the red, will deepen further and salary distribution of regular employees too may be affected. Resuming normal transactions would not be an easy task. Achieving the Plan targets in the last quarter of the financial year would not be easy either, sources said.
