Kochi: Demonetization has hit the cash-strapped city corporation which is highly dependent on daily tax collections and other remittances from various sources. As the daily collection has dropped from Rs 25 lakh to Rs 2 lakh the day to day functioning of the local body has been badly hit. Meanwhile, in an attempt to effectively address the situation, Mayor Somini Jain has asked civic officials to accept the scrapped Rs 500 and Rs 1000 notes from tax payers and other service users.
“These two months are significant as most of the tax collection is being remitted during this time. If the payment is rejected citing demonetization, it will destabilize the Corporation exchequer. Hence, I have given instructions to permit the acceptance of old notes,” the Mayor told DC. Since the civic body is depositing the money directly into its bank account, accepting old notes will not be a big issue, according to civic authorities.
However, Ms. Jain admitted that scarcity of smaller denomination notes has hit the payment of fees for various services and contractors. “Since the maximum withdrawal limit is Rs 10, 000 per week, we are unable to pay the wages of workers. All works have to be stopped until normalcy is restored,” said a Corporation contractor. Development works, salary and pension disbursement and other payments will be delayed if the crisis continues for long. Earlier, the mayor sought special permission for local bodies for using scrapped currencies until December 31.
