Gwalior Municipal Corporation Faces Severe Financial Crunch, Resorting to Bank Loan to Pay Salaries

Gwalior, Madhya Pradesh: The Gwalior Municipal Corporation (GMC) is grappling with a serious financial crisis, forcing it to borrow from a bank to pay staff salaries and pensions. To cover expenses, the corporation has taken a ₹15 crore overdraft against its ₹20 crore fixed deposit, highlighting the gravity of its cash flow problems.

Escalating Financial Strain

During a recent Mayor-in-Council (MIC) meeting chaired by Mayor Dr. Shobha Sikarwar, the worsening financial condition of the corporation was discussed, and the decision to take the overdraft at a nominal interest rate of 0.25% was approved. GMC typically disburses around ₹18 crore each month as salaries and pensions to its employees. Due to the fund shortage, the corporation has struggled to transfer these payments on time, relying instead on revenue collection to meet obligations.

Bank Loan to Ensure Timely Salaries

The overdraft will help the corporation ensure timely payment of salaries and pensions to employees, underscoring the municipality’s dire financial situation. The MIC also addressed irregularities in the procurement of electrical cables, ordering a committee comprising two senior members and a retired official to investigate the tender process.

Impact on Public Services

The corporation’s financial woes are affecting essential public services. Road construction in neighborhoods and maintenance of local streets has been stalled due to lack of funds. While main thoroughfares remain relatively intact, many colony and lane roads are in a state of disrepair. The MIC also reviewed updates to solid waste management contracts and revenue collection for sand, husk, gravel, and stone fees, emphasizing the need for administrative decisions to manage these shortfalls.

Mayor-in-Council Members Present

The MIC meeting was attended by members including Avadhesh Kaurav, Nathuram Thekedaar, Shakeel Mansoori, Vinod Yadav Mathu, Gayatri Mandeliya, Premlata Jain, Sandhya Kushwaha, along with Additional Commissioners T. Prateek Rao, Pradeep Tomar, Munish Singh Sikarwar, and Rajni Shukla (Finance).

The financial crisis has drawn attention to the urgent need for structural reforms in the GMC, as residents continue to face delays in basic services due to the municipality’s strained resources.