The Kalaburagi City Corporation, northern part of the state of Karnataka, India, is facing a severe financial crunch, resulting in unpaid salaries for its staff. Permanent employees have not received their wages for February and March, while outsourced workers have gone without pay for three months. This situation has drawn attention to the ongoing fiscal challenges plaguing the civic body.
Despite clear instructions from the 5th State Finance Commission in January 2024 urging urban local bodies to reduce dependency on government grants and build their own revenue streams, the corporation has failed to make progress. Efforts to increase income through commercial and property taxes, and user fees have been poor.
Currently, the corporation employs 345 permanent staff against the sanctioned strength of 1,725. Their combined monthly salary stands at around Rs 2 crore. Additionally, outsourced workers—including sanitation staff, truck drivers, loaders, and cleaners—require Rs 3 crore each month. This brings the total monthly requirement for salaries and basic operations to Rs 5 crore.
However, the corporation’s annual revenue collection is only Rs 39 crore, way below the Rs 60 crore needed to cover yearly salary expenses. The mismatch between revenue and expenditure is the primary reason for the delayed payments.
In a bid to address the shortfall, the administration is now considering introducing user charges for garbage collection from commercial establishments such as hotels, bars, restaurants, and hospitals. Reforms in property tax assessment, trade licenses, and advertisement fees are also being considered. Although officials have assured that salaries will be cleared soon, there seems little hope in the absence of a sustainable way to generate revenue.