CHENNAI: The Greater Chennai Corporation (GCC) is facing increasing cash flow constraints, as its expenditure growth continues to outpace revenue collections over recent financial years. Despite maintaining a steady income, the civic body’s overall deficit reached Rs 1,763 crore in 2025-26 Financial Year and then to Rs 1,970 crore after accounting for principal loan repayments.
The fiscal gap is largely driven by civic infrastructure expansion, expanding operation, and maintenance commitments, and a heavy reliance on GCC's internal funds for major municipal projects.
Revenue expenditure surged from Rs 3,581 crore in FY 2022–23 to Rs 5,676 crore in FY 2025–26. This increase stems from rising operational costs in conservancy operations, Design-Build-Finance-Operate-Transfer (DBFOT) public conveniences, vehicle hire charges, wage revisions, and maintenance for newly added schools and civic assets.
Concurrently, capital grant support under government schemes experienced a sharp drop, falling from Rs 1,941 crore in FY 2022–23 to Rs 521 crore in FY 2025–26. To plug the funding gap for ongoing capital works, GCC repeatedly drew on internal transfers from its Revenue Account to its Capital Account. Over the last two financial years, GCC transferred an average of 3.6 times its transfer capacity, with internal transfers climbing from Rs 303 crore in FY 2022–23 to Rs 937 crore in FY 2025–26.
The continuous reliance on internal financing has severely stretched the civic body’s liquidity. As of July 29, pending bills stood at Rs 1,929.72 crore. With anticipated bills for FY 2026–27 estimated at Rs 1,505 crore, GCC's total bill liability for FY 2026–27 has touched Rs 3,434.72 crore.
To address the mounting deficit without interrupting essential urban services or ongoing development, the GCC leadership has initiated several immediate and medium-term interventions.
The Corporation Commissioner said the civic body is conducting daily reviews of its cash position and prioritising urgent payments. An intensive property tax collection drive in July yielded Rs 158.18 crore in its first 27 days, compared to Rs 61.55 crore during the same period in July 2025. GCC is initiating data mapping to plug tax leakages, reassessing under-assessed properties, and pursuing asset monetisation alongside departmental expenditure reviews.
Requests have been submitted to the state government for a ways and means advance and an advance release of two quarters of surcharge on stamp duty.