Diversion of GST Grant Likely To Put Pune Municipal Corporation Under Financial Pressure Due to Pending Water Bills

The Pune Municipal Corporation (PMC) is facing potential financial strain as the Maharashtra government plans to redirect the GST grant, typically allocated to municipal corporations, towards settling outstanding water bills owed to the water resources department.

PMC’s indebtedness to the water resources department amounts to a staggering ₹187 crore, a revelation that could significantly burden PMC’s finances if the state proceeds with its intended course of action.

Under normal circumstances, PMC receives a monthly GST grant of approximately ₹180 crore from the state government. However, recent directives from the state administration issued on May 8 have mandated civic bodies, including PMC, to utilize these funds to address water bill arrears. PMC has been instructed to furnish details regarding undisputed outstanding water bills as part of this process.

Despite PMC’s denial of any outstanding water bill dues to the water resources department, the state government’s decision follows recent communications from the department highlighting the substantial arrears. Municipal corporations have been directed to engage with the water resources department to ascertain undisputed arrears, settle outstanding dues, and provide comprehensive documentation.

A senior official from the water resources department confirmed, “We notified the state government about the arrears and undisputed water bill charges on May 6.”

Failure on PMC’s part to furnish outstanding details to the authorities will result in the undisputed water tax amount, calculated by the water resources department, being deducted from the GST subsidy starting next month.

In response, Nandkishore Jagtap, head of PMC’s water supply department, stated, “We submitted an explanation regarding the arrears to the state government on May 10, clarifying that the water resources department’s calculations date back to 2016. They have imposed fines, alleging commercial water charges instead of residential ones, despite our periodic settlements.”

According to officials from the water resources department, while the state government has sanctioned an annual water usage allowance of 11.50 thousand million litres per cubic feet (TMC) for Pune in accordance with the Maharashtra Water Resources Regulatory Authority (MWRRA) regulations, PMC’s usage exceeds this allocation at 18.50 thousand million TMC. Consequently, the department has levied administrative fines for the excess water usage, totaling ₹187 crore.

PMC, however, contests these claims, asserting that 97.50% of its water quota is allocated for residential purposes, with the remaining portion earmarked for commercial use, as per regulations.

Jagtap emphasized, “We adhere to the prescribed guidelines for supplying water to commercial establishments.”

As PMC grapples with the impending financial implications of its water bill arrears, the situation underscores the challenges municipalities face in balancing fiscal responsibilities amid regulatory compliance and resource management.