ULBs should not run into deficit: Zhaleo Rio warns against financial mismanagement

Kohima

BY | Thursday, 19 March, 2026

Advisor for Urban Development and Municipal Affairs, Zhaleo Rio, IAS (Retd.), has stated that the resignation process of the Chairperson and Deputy Chairperson of the Kohima Municipal Council (KMC) is being carried out as per the provisions of the Municipal Act, leaving it to the councillors to elect a new leader.

Speaking on the update and progress of the matter, the Advisor said that the government has already agreed to fulfill the provisions of the Act. “It is now left to the councillors. They have to elect a new leader,” he stated, emphasizing that due procedure must be followed in accordance with the law.

One-time grants for salary clearance
Addressing the issue of pending salaries of Urban Local Body (ULB) employees, the Advisor informed that both Kohima Municipal Council (KMC ) and Dimapur Municipal Council (DMC) had earlier written to the government seeking one-time grants to clear salary dues.

He said that prior to the long-awaited municipal elections—being held after a gap of nearly 20 years—the government decided to provide financial assistance to ensure that the councils started on a clean slate.

“I discussed the matter with the Chief Minister. Before elections were conducted, we decided to give them a clean chit,” Rio said.

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Accordingly, the government sanctioned a little over ₹5 crore to DMC and over ₹3 crore to KMC to clear pending employee salaries. However, Rio expressed concern that within a few months, similar financial issues have resurfaced.

“This the government cannot tolerate,” he asserted. While clarifying that he has no proof of wrongdoing at present, Rio stated that the department has already called for detailed information regarding revenue generation and expenditure patterns of the councils.

“We are going into the depth of this. If funds have been misused, I will send the department to make inquiries,” he said.

Need for revenue generation and accountability

Rio maintained that Municipal Councils must strengthen their own revenue generation mechanisms instead of repeatedly depending on one-time government grants.

“Without tax or fees, how will Municipal Councils survive?” he questioned.

He pointed out that ULBs receive grants-in-aid from the State Government depending on available resources and also receive funding under the 15th Finance Commission from the Central Government. However, he stressed that their primary source of sustainability must be internal revenue generation.

Citing examples, Rio said that while Dimapur Municipal Council and Mokokchung Municipal Council are managing comparatively well, the key lies in proper management practices.

“It is how they manage. There should be transparency and accountability. They should not run into deficit,” he stated.
Expressing confidence in the viability of major ULBs, Rio added, “I can vouch with confidence that if DMC, KMC, or MMC cannot survive, then there is something wrong.”

The Advisor reiterated that the department has already sought detailed reports on revenue streams and monthly expenditure from the councils to assess their financial health and ensure fiscal discipline moving forward.

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