Corpn. urged not to transfer own fund to treasury savings bank

The Kozhikode Corporation Council party of the United Democratic Front (UDF) has requested the civic body administration not to transfer its own fund to the Special Treasury Savings Bank (STSB) as demanded by the State government as it would lead to an administrative crisis.

The State Finance department issued a circular that required local selfgovernments to open accounts in the STSB first in 2021. The circular had apparently contravened an earlier decision of the Local SelfGovernment department allowing local bodies to maintain their funds in banks.

With many local bodies refraining from following the order, the circular was issued again recently. The government, facing an extreme financial crunch, is banking on the local bodies’ funds for many of its expenses.

However, the UDF has directed the heads of the local bodies under its rule not to follow the order, alleging that it was a move to steal the funds.

The fund constitutes income of local bodies through building tax and permits.

“The third instalment of the project share should have been sanctioned in December 2023, but is still pending. Due to treasury restrictions, the Corporation has not been able to pay up contractors even though the first and second instalments were sanctioned.

The civic body depends on its own fund for salary of employees and daily expenses,” K.C. Shobhita, UDF council party leader, said.

At present, the treasury has restricted withdrawal limit on one check at ₹5 lakh. If the fund is transferred to the treasury, the restriction would be applicable for it and the Corporation would be in a crisis, Ms. Shobhita added.

The UDF council party has warned the administration not to make the move without the approval of the Corporation council. “Earlier, the government stole the powers of local bodies and now an attempt is being made to steal their funds. This is injustice and an attempt to sabotage the Panchayat Raj system, and against the spirit of democracy,” she said.

Meanwhile, the Kozhikode Corporation is yet to receive ₹150 crore from the government on account of employees’ salary. “The Corporation is being forced to borrow money for its developmental activities.

“The administration has not been able to get the due benefits from the LDF government,” deputy leader of the council party K. Moideen Koya said.

Earlier, the govt. stole the powers of local bodies and now an attempt is being made to steal their funds.

UDF council party leader