Chennai, July 30 (IANS) The Greater Chennai Corporation (GCC) is grappling with a widening fiscal deficit as expenditure continues to outpace revenue, placing mounting pressure on the civic body’s finances and affecting its ability to meet payment obligations.
Despite maintaining relatively stable revenue collections, the Corporation’s overall deficit touched Rs 1,763 crore in the 2025-26 financial year and increased to Rs 1,970 crore after accounting for principal loan repayments, said officials.
The financial strain has been driven by a sharp increase in revenue expenditure, which rose from Rs 3,581 crore in 2022-23 to Rs 5,676 crore in 2025-26. Officials attributed the surge to higher operational costs, including conservancy services, Design-Build-Finance-Operate-Transfer (DBFOT) public conveniences, vehicle hire charges, wage revisions, and the maintenance of newly established schools and other civic infrastructure.
Adding to the challenge, capital grant assistance under various government schemes has declined steeply over the same period, falling from Rs 1,941 crore in 2022-23 to just Rs 521 crore in 2025-26. The reduction in external funding has forced the civic body to increasingly depend on its own internal resources to sustain infrastructure and development works.
To bridge the funding gap, the GCC has repeatedly transferred funds from its Revenue Account to its Capital Account. Internal transfers increased from Rs 303 crore in 2022-23 to Rs 937 crore in 2025-26, far exceeding the Corporation’s normal transfer capacity.
Officials said the continued reliance on internal financing has significantly strained liquidity and limited financial flexibility.
The impact of the cash crunch is reflected in the Corporation’s mounting payment obligations. As of July 29, unpaid bills stood at Rs 1,929.72 crore.
With an estimated Rs 1,505 crore worth of additional bills expected during the current financial year, the GCC’s total liabilities for 2026-27 are projected to reach Rs 3,434.72 crore.
To stabilise the financial position, the Corporation has initiated a series of immediate and medium-term measures. Corporation Commissioner has begun daily reviews of the civic body’s cash flow while prioritising essential payments.
A special property tax collection drive launched in July has yielded encouraging results, with collections reaching Rs 158.18 crore during the first 27 days, compared with Rs 61.55 crore during the corresponding period last year.
The GCC is also undertaking data mapping to identify tax leakages, reassessing under-assessed properties, exploring asset monetisation opportunities and reviewing departmental expenditure.
In addition, requests have been submitted to the state government seeking a ways and means advance and the advance release of two quarters’ surcharge on stamp duty to ease the immediate cash flow pressures.
–IANS
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