Govt cuts GST grant to NMC by half to Rs 27 crore

NAGPUR: Nagpur Municipal Corporation’s (NMC) financial crisis is likely to worsen. The state government has released 47% less Goods and Services Tax (GST) grant for the current month.
The state’s urban development department (UDD), under chief minister Devendra Fadnavis, on Monday issued two notifications releasing GST grant of Rs 280.47 crore for 18 municipal corporations including NMC and Rs 647.34 crore for Brihanmumbai Municipal Corporation (BMC). NMC has been given Rs 27.21 crore.

After launch of GST, NMC was given Rs 42.44 crore for July 2017. The grant was increased to Rs 60.28 crore in August 2017 and then reduced to Rs 51.36 crore in September 2017. That figure continued till last month.

NMC office bearers including mayor Nanda Jichkar, officials and even union minister Nitin Gadkari met Fadnavis and demanded a grant of Rs 88.63 crore per month. The government responded by reduced grant by half for current month.

Municipal commissioner Ashwin Mudgal said UDD was yet to convey the reason behind such drastic reduction. “I dont think it is a permanent reduction and changes are likely in the next few days.”

Jichkar said NMC would pursue the issue with the government and get remaining amount of GST grant. “I think GST grant has been reduced as it is last month of current fiscal. We are hopeful of getting Rs 51.36 crore every month. Our demand remains for for Rs 88.63 crore. Government has assured to give special financial assistance to NMC to make up for less GST grant. NMC is also likely to get dues of stamp duty revenue soon,” she said.

NMC’s financial liability has increased greatly while its revenue has stagnated. The civic body is finding it difficult to pay for city bus operations, garbage collection and to other contractors. Already, contractors have stopped all works including civil and water works. Salaries of employees for current month is yet to be disbursed.