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Hit by cash crunch, MBMC eyes FD to avail overdraft facility

02:55 AM Oct 28, 2021 | Suresh Golani

Staring at an acute cash crunch, the Mira Bhayandar Municipal Corporation (MBMC) has now planned to dip into its reserves (in fixed deposits) as a bail-out measure. However, the MBMC is treading cautiously by deciding not to encash the fixed deposits (FD’s) but instead avail overdraft (OD) facilities on the asset valued at Rs. 122 crore.

While a resolution to this effect was passed in the online general body meeting with the BJP, which single-handedly rules the civic body, Congress strongly opposed the move.

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To justify their idea of availing the OD facility, the civic administration claimed that a significant part of funds amounting to more than Rs. 125 crore had been routed to spend on enhancing medical infrastructure to contain the spread of Covid-19 since the pandemic broke out last year. While financial assistance from the government has been limited to just 20 crore, the civic administration still awaits funds towards levies towards stamp duty charges.

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“The OD facility will be used only when required-for payment towards development projects and other important work,” said a senior MBMC officer.

“OD is a credit facility that invites interest only on the amount used, and we can deposit the amount back when we receive government grants. This will ensure that our FDs remain intact along with its benefits.”

Congress corporator Anil Sawant said that the move by the BJP is nothing but an evil ploy to pamper contractors by emptying the civic coffers in the last leg of their final five-year stint. “We will register our opposition to the unjustified and illegal move with the state government,” he said.

Meanwhile, the civic administration claims of being saddled with expenses and overheads amounting to around Rs. 100 crore, which includes pending bills to contractual agencies towards developmental projects and ex-gratia festive bonus to its employees. This apart from a substantial financial burden on the cash-starved civic treasury due to the astronomical hike in salaries owing to implementation of the seventh pay commission.

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