CHENNAI: The city corporation is unlikely to initiate any big-ticket projects using its own capital resources during the current financial year due to mounting financial stress as its overall deficit after principal repayments stood at Rs 1,970 crore in 2025-26.
GCC sources told TNIE the financial strain is largely the result of aggressive capital expenditure over the last two years, particularly in the run-up to the elections.
Now, the civic body is increasingly relying on state and central government grants, including the Chief Minister’s Integrated Urban Transformation Mission and Urban Challenge Funding, to meet public demands.
Officials said GCC has maintained relatively stable revenue collections over the past few years. Still, its expenditure has grown at a much faster pace, widening the gap between income and spending. This gap is attributable to the expansion of civic infrastructure, increased operation and maintenance (O&M), and taking up a large number of projects with GCC’s own funds.
Financial data shows GCC recorded a revenue surplus of Rs 166 crore in 2022-23 and Rs 728 crore in 2023-24. However, after accounting for capital expenditure and principal repayments, the corporation posted overall deficits of Rs 375 crore and Rs 355 crore, respectively. The financial position deteriorated in successive years as the overall deficit jumped from Rs 529 crore in 2024-25 to Rs1,970 crore in 2025-26.
During 2025-26, capital receipts stood at Rs 2,251 crore, while capital expenditure surged to Rs 3,551 crore, creating a capital deficit of Rs 1,300 crore, compared to just Rs 120 crore last year. Since 2022-23, capital expenditure has increased by over 25%, from Rs 2,830 crore in 2022-23 to Rs 3,551 crore in 2025-26.
This is, however, a 61% increase compared to capital expenditure in 2024-25, which was only Rs 2,201 crore. As GCC was increasingly dependent on transfers from its revenue account to finance capital works, such transfers rose from Rs 303 crore in 2022-23 to Rs 937 crore in 2025-26, while capital grant support declined from Rs 1,941 crore to Rs 521 crore during the same period.
As of July 29, the corporation has contractor bills amounting to Rs 1,929.7 crore pending, while anticipated bills during 2026-27 are estimated at Rs 1,505 crore, taking the liability to Rs 3,434.7 crore. Officials said around Rs 800 crore of earlier contractor dues had already been cleared through invoice discounting under the Receivables Exchange of India Ltd., repayments for which are continuing.
Even the revenue expenditure has increased substantially from Rs 3,581 crore in 2022-23 to Rs 5,676 crore in 2025-26, primarily due to higher expenditure on conservancy operations, DBFOT public conveniences, vehicle hire charges, increase in wage bill due to wage revision, and O&M on newly added schools and other assets created
To improve liquidity, GCC has intensified property tax collection, raising Rs 158.2 crore during the first 27 days of July this year against Rs 61.55 crore during the corresponding period last year.
The civic body is also reviewing expenditure across departments, identifying under-assessed properties and tax leakages, pursuing asset monetisation, and has sought Ways and Means Advances, and advance release of stamp duty surcharge from the government to ease cash flow.
“GCC is under severe financial pressure. It is difficult to meet even routine expenditures such as salaries, conservancy payments and other essential commitments. Most likely, it will have to avail an overdraft this month to manage the cash flow,” official sources added.
VCK questions shifting of Ambedkar’s portrait
Chennai: An Dr B R Ambedkar portrait on the wall behind mayor’s seat in the GCC council hall has been moved to the opposite side of the hall to make way for a portrait of M K Stalin. Condemning the movie, VCK councillor K Gopinath said Ambedkar, who had faced caste discrimination and was made to sit on the floor during his school days, had now been pushed to a corner in the council hall too. “Either place Dr Ambedkar’s portrait alongside Mahatma Gandhi’s portrait or remove it from the council hall,” he said. Mayor R Priya said she would ensure that Dr Ambedkar’s portrait is placed next to Gandhi’s portrait.