KARACHI, July 25: The city government may not be able to pay salaries for the next month to its employees due to the extreme shortage of funds as the provincial government has not released its share of the matching grant of Rs32 million for the month of July.

The federal government’s matching grant has been provided to all local governments since 1999, in lieu of octroi and zial tax. The KMC’s share in this regard was Rs320 million but it had been receiving an average of Rs250 million per month. After the formation of the city government the share should have been increased as the former district councils are also part of the present city government, but it has remained the same.

During the current month the city government has not received its share and its finance department has informed the DCO Karachi that it is not in a position to pay salaries and pensions to thousands of its employees for the next month.

The city government needs about Rs350 million to meet the requirements of towns and it has been spending from its limited resources for the whole month.

In the absence of any strong source of revenue generation the city government cannot continue without the grant for the second consecutive month.

It may be mentioned here that some towns are already faced with similar financial crisis. The employees of the education department of Lyari Town were paid their salaries on the 24th of this month.— PPI