The Kozhikode Corporation Council party of the United Democratic Front has requested the local body administration not to transfer its own fund to the Special Treasury Savings Bank (STSB) as demanded by the State government as it would lead to an administrative stagnation.
The State Finance department issued a circular that required local self-governments to open accounts in the STSB first in 2021. The circular had apparently contravened an earlier decision of the Local Self Government department allowing local bodies to maintain their funds in banks. With many local bodies refraining from following the order, the circular was issued again recently. The government, facing an extreme financial crunch, is banking on the local bodies’ funds for many of its expenses.
However, the UDF has directed the heads of the local bodies under its rule not to follow the order, alleging that it was a move to steal the funds. The own fund constitutes income of the local bodies through building tax and permits.
“The third instalment of the project share should have been sanctioned in December 2023, but is still pending. Due to treasury restrictions, the Corporation has not been able to pay up contractors even though the first and second instalments were sanctioned. The civic body depends on the own fund for salary of the employees and daily expenses,” K.C. Shobhita, UDF council party leader said.
At present, the treasury has restricted the withdrawal limit on one check as ₹5 lakhs. If the own fund is transferred to the treasury, the restriction would be applicable for it. Corporation would be in a crisis, as it would not be able to distribute the salary of the employees on time, Ms. Shobhita added.
The UDF council party has warned the administration not to make the move without the approval of the Corporation council. “Earlier the government stole the powers of the local bodies and now an attempt is being made to steal their funds. This is injustice and an attempt to sabotage the Panchayat Raj system and against the spirit of democracy,” she said.
As of now, the Kozhikode Corporation is yet to receive ₹150 crores from the government on account of the employees’ salary. “The Corporation is being forced to borrow money for its developmental activities. The administration has not been able to get the due benefits from the LDF government,” Deputy leader of the council party K. Moideen Koya said, warning the Mayor not to follow her usual routine of approving something expecting the council to follow the suit later.
