CHENNAI: Within two years, the net deficit of the city corporation has increased nearly three times, reflecting the increasing financial pressure on the civic body. The corporation's revenue deficit for 2025-2026 which was originally estimated in last year's budget to be merely `68.96 crore has also seen a staggering 10-fold rise in the revised estimate, mounting to `756.71 crore.
Mayor R Priya presented the civic body budget for the financial year 2026-27. While the net deficit has risen sharply from `601.09 crore in 2024-25 to `2,011.77 crore in 2026-27, the city corporation expects to keep its revenue deficit this time at `105.32 crore, which it intends to achieve by focusing on other non-tax revenue sources simultaneously.
Speaking to TNIE, a senior corporation official said, "The threefold increase in the net deficit is largely due to higher capital expenditure. The carryover of negative balances from one financial year to the next has also compounded large differences." While the opening balance for 2024-25 stood at `515.57 crore, the revised estimate reflected a negative balance of `596.28 crore. The estimated opening balance for 2026-27 is also projected to remain negative at `1,669.74 crore.
Speaking on the 10-fold differences in revised revenue deficit in 2025-26 compared to budget estimates, the official said, "This is again due to increased capital expenditure, either state or GCC announced works, that the civic body had to transfer `500 crore from its revenue receipts to it's capital account, leaving a `500 crore deficit in the revenue account." Even without this, the revised estimated deficit still saw an increase of `188.14 crore compared to the budget estimate in 2025-26.
The official said in 2025-26, a range of works have been taken up using capital funds in buildings and storm water drain departments, due to which it saw a jump of `61.37 crore and `257.8 crore in the revised estimates respectively.
On how the estimated revenue deficit for 2026-27, is expected to be contained at `105.32 crore, the official said, "We are now focusing on generating non-tax revenue through advertisements, which we expect to bring in `75-`100 crore. We also anticipate improved revenue collection through conventional means."
As for property tax, the corporation's primary source of revenue, the budget expects a collection of `2,450 crore. While as per the revised estimates last year, the property tax collection was pegged at `2,300 crore.
Corporation officials said they have collected `1,700 crore until the early days of January 2026.
For the bus route roads department, an allocation of `725.06 crore has been made, which is an increase from `628.25 crore from previous year. However, the revised estimate for 2025-26 for the department was at `311.6 crore.
The education department saw an increase of `11.13 crore compared to last year's budget of Rs5 crore. The revised estimate for the department was `26.30 crore.
However, in other sectors like stormwater drains, the allocation has decreased from `1,032.25 crore last year to `693.05 crore this year. Corporation officials said most of the SWD works are over with 99% under Asian Development Bank funded projects being completed. Solid waste management saw a reduction of `29 crore from previous year.
The allocation for special projects also saw a steep reduction with `85.03 crore, which is `93.97 crore less than the previous year. The budget for bridges has also decreased, with `130.03 crore allocated this year against `164.03 crore last year.
The revenue deficit has been increasing over the last two years. In 2024-25, the actual deficit has been at `563.09 crore.