Nagpur: The Nagpur Municipal Corporation (NMC) has landed in the eye of a major financial and administrative controversy after it allegedly failed to comply with a Maharashtra Government directive on employer contributions under the Defined Contribution Pension Scheme (DCPS), leaving around 1,000 employees deprived of their rightful post-retirement pension benefits.
The alleged lapse, first flagged by the Office of the Principal Accountant General (Audit), Maharashtra, in December 2025, remained unaddressed for nearly six months despite an official audit objection. The issue has now resurfaced after former corporator Vedprakash Arya obtained official documents through the Right to Information (RTI) Act, exposing what he described as a “serious financial irregularity” within the civic body’s Chief Accounts and Finance Department.
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According to Arya, the Maharashtra Government had issued a Government Resolution (GR) on August 19, 2019, making it mandatory for all government bodies to increase the employer’s contribution under the Defined Contribution Pension Scheme from 10% to 14% with retrospective effect from April 1, 2019.
However, despite the binding directive, NMC allegedly continued depositing only 10% as its employer contribution for several years, resulting in a substantial shortfall in employees’ pension accounts. Although the civic administration reportedly enhanced the contribution to 14% later, it implemented the revised rate only from April 1, 2025, instead of the mandated date in 2019.
As a result, retired employees allegedly received lower pension benefits than what they were legally entitled to. Official records accessed through RTI indicate that the outstanding unpaid employer contribution still stands at nearly Rs 9 crore, while the cumulative financial impact over the six-year period is expected to be significantly higher.
The statutory audit had detected the discrepancy, and the Senior Audit Officer issued an objection to the NMC administration on December 27, 2025, directing the civic body to submit its reply within four weeks. Arya alleged that instead of complying with the audit observations, officials deliberately suppressed the matter and failed to take corrective action.
He further claimed that the civic administration initially refused to provide information under the RTI Act, forcing him to file a first appeal. It was only after the Appellate Authority’s order on June 25, 2026, that the relevant audit documents and departmental records were furnished, bringing the alleged irregularity into the public domain.
According to the documents, employees suffered a direct financial loss of Rs 8.98 crore during the financial year 2024-25 alone due to the shortfall in employer contributions. Arya contended that if similar losses from 2019 onwards are calculated, the total amount withheld from employees’ pension accounts would be far greater.
Calling it a glaring case of administrative negligence, Arya has written to the Municipal Commissioner demanding immediate credit of the pending 4% employer contribution for the period from April 2019 to March 2025, along with applicable interest.
He has also sought strict departmental action and criminal proceedings against officials allegedly responsible for ignoring the audit objection and delaying corrective measures, arguing that the failure not only violated government policy but also adversely affected the financial security of retired civic employees.
The allegations are yet to receive an official response from the Nagpur Municipal Corporation.
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