Nagpur: At a time when the city corporation owes over Rs 500 crore dues to various agencies and contractors , the cash-strapped Nagpur Municipal Corporation ( NMC ) is all set to top up its bank loan by Rs100 crore to meet the revenue deficit.

Besides this, municipal commissioner Ashwin Mudgal, who is set to table the NMC’s budget for 2018-19 and revised budget for 2017-18, may propose a massive cut in the standing committee chairman Sandip Jadhav’s budget by almost 50%.

Confirming this, a source in the NMC’s accounts and finance department told TOI that the civic body has loan of Rs300 crore and the repayment at Rs7 crore a month is being done regularly.

The present loan is expected to be fully repaid by October this year. The city corporation now plans to avail Rs 100 crore top up loan, said the source, adding Mudgal will propose this in his civic budget for the year 2018-19. If it materializes, the total debt will increase to almost half of its annual income.

As on date, the NMC is already facing around 60% financial deficit against a revenue target of Rs2,271 crore set by the standing committee chairman Sandip Jadhav.

Jadhav had proposed Rs2,271 crore revenue in his 2017-18 budget. Mudgal may revise it to Rs1,135.5 crore, the source added. “Revenue generation has affected to a great extent due to scrapping of octroi and then local body tax (LBT). Many development projects have taken a hit due to fund crunch,” added the source.

While grants from the state government may not be under the NMC’s control, the civic body has also failed to increase its revenue base. The political class too is reluctant to implement the revised tax system and has been sitting on several proposals aimed at increasing revenue.

The critical financial situation of the NMC can also be gauged from the fact that a delegation of contractors had to meet standing committee chairman Sandip Jadhav over non-release of their payments.

Contractors working for the Nagpur Municipal Corporation are seeing red over delay in payments of works completed by them. Since November last year, they have been made to wait for over a month to receive payments.

“Our outstanding dues have crossed over Rs100 crore and we have decided not to take up any new works,” said office-bearers of Nagpur Municipal Corporation Contractors’ Welfare Association (NMCCWA).

According to NMCCWA office-bearers, barring exceptions, contractors’ bills were cleared in about a week’s time if everything was in order. But since the end of 2017, the process has been thrown out of gear largely due to paucity of funds at the civic body. It has been a hand-to-mouth situation with the brisk recovery of pending dues by the revenue department being a saving grace, the source added.

