We are told that BBMP is broke, they have no money. How many of us know the reaon why. A growing city, with so much commerce (IT, BT and all) going on, how exactly would it be broke? No english is required to explain things, numbers always tell their story. One look at summary of receipts in BBMP 2010-2011 budget may tell us something, (pdf available on BBMP website, also see embedded below for convenience), so here are the items where 2009-2010 budgeted and revised estimates have the biggest gap, orderd the way BBMP listed in their budget, only items bigger than 20 crores, leaving out shortages on JNNURM grants.
Table below:
Receipt Item |
2009-10 budget (lakhs) |
2009-10 revised (lakhs) |
---|---|---|
Grant - Metro (BMRCL) |
7000 |
1.96 |
Grant – IDD |
3500 |
1650 |
Grants from MLA - Development works |
4200 |
200 |
Grants - state finance commission grants |
50000 |
39895 |
Beggary Cess |
3300 |
1988 |
Health Cess |
16500 |
9941.91 |
Library Cess |
6600 |
3976.76 |
Improvement Charges |
9250 |
52.31 |
Khata Transfer charges |
3500 |
1203 |
Infrastructure User charges |
2000 |
0 |
Service charge – central govt buildings |
2000 |
0 |
Service charges on cess collected on behalf of govt |
2640 |
0 |
Service charges on tax expemt properties |
2500 |
0 |
Property tax |
110000 |
79500 |
Rents from shops & commercial complexes |
5000 |
1107 |
License fees – hoardings on BBMP land |
2800 |
0 |
User charges - Solid Waste Management |
4000 |
1.52 |
Building deviation regularization |
5000 |
0 |
Building license fees |
4864 |
2505 |
Borrowing towards other works |
57811 |
155000 |
Attaching/embedding below for reference - Receipts details from BBMP, from their website. BBMP 2010-11 Budget Receipts
Attachment | Size |
---|---|
Municipal Finance in India, RBI, Dec 2007.pdf | 1.01 MB |
India Municipal Finance Study - ADB, 2009.pdf | 89.93 KB |
ಪ್ರತಿಕ್ರಿಯೆಗಳು
quick conclusions
Some things that numbers say
so why is it so?
The key reason, as noted in RBI report "Municipal Finance in India:An Assessment" (Dec, 2007):
Notice the word imbalance. That is explained in RBI report as:
Yeah, many functions do not have corresponding financing source.
So RBI has researched this. And we see in BBMP's budget every year. What is being done to address this imbalance? Nothing. Don't tell me about the bangalore regional governance act (drafts are floating around) please, it works only on the functions of BBMP, and is absolutely silent on the finances.
ADB's study on municipal finance, ETA Feb 2011
As per India: India Municipal Finance Study, ADB, Aug 2009 (Financed by the Republic of Korea e-Asia and Knowledge Partnership Fund)
Tha ADB preamble says that the study will be ... ending by 28 February 2011.
sources of income for BBMP, disparity?
As per this report titles "Municipal Finance Systems in Conflict Cities: Case studies on Ahmedabad and Srinagar, India", sources of revenue for BBMP like body are:
Also ...
And how much is this disparity? See table below
Level of government
Revenue (Rs. million)
Per capita income (Rs.)
Centre
833.20
987
State
486.60
574
Local
39.00
205
Some of the above and
Some of the above and solutions had already been enumerated in the BBMP gyan. See constraints, recommendations and reference links. A medium term fiscal policy has also been prepared (reference 19) but implementation status is unknown as in most things govt. ;-) The ADB report may be yet another redundancy again as in all things govt. The IT companies don't pay tax owing to the STPI act (?) or similar that provided for a 10-year tax holiday. Hue and cry was raised when the DTC would start taxing them next fiscal but IIRC the tax holiday was extended by another 5 years. So, all that $16-$18 billion worth of software exports from K'taka are tax-free. But, all companies irrespective of their contribution do want subsidised land, top-notch infrastructure...
our income tax, back to our city?
And if you notice all items listed in BBMP receipts, you would be hard pressed to find clear or direct ways for our income taxes to return to the city. So what you have is a situation where most big companies are enjoying tax benefits, and tax paying professionals just don't have a big way available to "fund" their own city.
The only indirect way the income tax returns to our city would perhaps be those Grants (JNNURM, Stata Finance Commission). Grants to BMTC, BWSSB etc would also count as those two agencies also run our city, which reminds us all that of water, power, mobility and telecom, BBMP is not responsible for providing any service, and it is supposed to "run" our city. Strange.
Back to talk of fiscal dependency, talk as much as you would about property taxes, but even if BBMP had collected as much as it planned, it would still have had to borrow money. Numbers say this:
So with 100% property tax collection, BBMP would still have had to borrow Rs 600 cr+ if I interpret the numbers right.
pl refer the MTFP of 2009-10
Last year the BBMP commsiioner issued an Mdium Term Fiscal plan which said that according to his own calucations of a debt limit the BBMP could borrow Rs 5000 crs This is itself illgeal since the MTFP is not meant for BBMP and there are still no rules framed for the Local Fund Authorities Fiscal responsibility act which applies to urban and PRIs
That is why BBMP is now broke because all the ways of paying back have gone awry
That is why they have increased the ad rents on billboards and are trying means such as betterment charges (proposed Rs 120 crs) and akrama sakrama etc
the fact is with the extreme infrastrcuture focus in the Adminsitrators period 2007-10 all kinds of ways of the State to ruin Bangalores funds were tried out and it is no wonder that the scam revelaed last month amounts to 3500 crs almost the total borrowed amount
SO THAT IS WHERE THE MONEY HAS GONE AND THAT IS WHY BBMP IS BROKE !!!