Pimpri: Pimpri-Chinchwad is likely to face financial losses, as it has not received grants for last two months, which is given by the State government. The State has been giving grants to the civic body from last three years after scrapping of Local Body Tax (LBT) and octroi.
The grants, which were received by the civic body against the Goods and Service Tax, was reduced significantly as against the assurance by the State that it would see a hike of eight per cent every year. However, despite this assurance, the GST grant for last two months has been reduced significantly. A sum of Rs 125.57 crore was received by the PCMC while the expected amount was worth Rs 128.97 crore for two months. If this trend continues, the PCMC will face losses of about Rs 125 crore annually.
The PCMC received a grant of Rs 1,046.40 crore during the financial year ended March 2018. Considering 8 to 10 per cent increase every year, the civic body should have received at least Rs 1,130 crore grant in the new year. But if the grant received for last two months is considered, the total amount received as per PCMC’s expectation was reduced by Rs 125 crore for the financial year.
On the contrary, instead of increasing monthly grant to Rs 128.97 crore per month, a subsidy of Rs 125.57 crore is being given by the State government. According to PCMC officials, it will result in a deficit of Rs 3.40 crore per month and Rs 40.8 crore annually if compared to previous year. The corporation has estimated the expenditure assuming the increase of 8 per cent in the current fiscal year budget estimates.
With the scrapping of octroi and Local Body Tax, the government has now introduced GST. In order to compensate the losses, those were incurred due to the scrapping of the old tax system, PCMC receives GST grant every month. The grant is being transferred in PCMC’s account at the beginning of every month.