BBMP’s 6728 crore budget: Yet another unrealistic financial plan for the city?

The Bruhat Bangalore Mahanagara Palike (BBMP) presented its annual budget, the last by the current Council, on March 17th 2015. The total outlay in the 2015-16 Budget is of Rs. 6730 crores.

Acknowledging the financial situation of the BBMP to be “tight and tough”, Chairman of the Finance and Taxation Committee, V Anand characterised the budget as a realistic one. Instead of initiating new projects, the budget’s main focus would be to see through the ongoing and spilled over works and to cut down on administrative overheads.

Total grants of Rs. 2,891 crores are expected from the State Government. The Revised Estimate of State Grants for the year 2014-15 is Rs 1,019 crores. The budget lays strong emphasis on boosting revenue receipts from property tax, service tax on Central and State Government properties, rent from BBMP Markets, SWM Cess and Trade Licenses.

An amount of Rs 415 crores has been allocated towards Solid Waste Management including investments in innovative technologies. Around Rs. 247 crores has been allocated to environment-related works such as development and maintenance of Parks and Lakes as well as Afforestation and Rainwater Harvesting.

BBMP does not have the financial resources

BBMP does not have the financial resources to provide adequate quality of services. Here are some grapphs that visualise the budget over the years.

 

As the city grew out of limits with more and more structures, the actual revenue the city received has decreased over the years, although the estimations always project a higher amount.

Payments from BBMP have decreased over the years. Incidentally, on the budget day, contractors were seen protesting in front of BBMP, demanding that BBMP pay the bills pending since April 2013.

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The BBMP budget estimates Rs. 6,730 crore of outlays for Bengaluru. Actual receipts have been consistently overestimated by over 100% in each of the last five years. Total receipts have declined consecutively for last four years; decline of 25% since 2011-12 resulting in significantly poor outlays. 

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The BBMP is almost broke. Sample this; the BBMP’s outstanding loans of over Rs 3,000 crores with pending bills of over Rs 2,500 crores, both combined are roughly twice the size of total annual receipts. In 2014-15, the BBMP had outstanding loans of Rs 3,675 crores, while revised estimate for repayment (Principal plus Interest) is only Rs 146 crores. This year, as the budget estimate is lower, the revised estimate is likely to be much lower than that for last financial year.

 

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On the other hand, the BBMP needs to raise its own revenue which has never managed to cross the Rs. 2,000 crore mark, making it heavily reliant on State and Central Grants. Across the years, property tax collection has never been as much as it should be.

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The repercussions of BBMP’s debt-ridden finances can be felt on Bangalore’s infrastructure and citizen services.  The total budget comprises Revenue Expenditure of Rs. 2,243 crores and Capital Expenditure of Rs. 4,486 crores.  Of the total Revenue Expenditure, Rs. 534 Crores will go towards salaries, Rs. 717 crore on other administrative expenses and a further Rs. 100 crore will go towards Interest on Loans, leaving only Rs. 893 crores for Works-related expenditure. Given total actual receipts are likely to be in the region of Rs 3,000 crore, total expenditure on infrastructure and citizen services is likely to be only Rs 1,500 Crores.

Here are the other highlights of the budget sent in a press release:

Budget estimate for 2015-16:

Opening Balance: Rs.17.17 crores. Receipts Rs.6712.45 crores.

Total Expected Receipts: Rs.6729.62 crores (From BBMP’s own source: Rs.3810.17 crores and Government Grants is Rs.2902.28 crores.]

Total Estimated Expenditure:

  • Rs.6728.98 crores out of which Revenue Expenditure is Rs.2243.22 crores
  • Capital Expenditure – Rs.4486.4 crores.
  • Surplus Rs.64.00 lakhs.
  • Proposal sent to Government for release of Grants to the tune of Rs.5480.87 crores.
  • Government in its Budget 2015-16 has announced is Rs.2891.02 crores.

Expected government grants, taxable and non-taxable income:

  • Expected Property Tax – Rs.2480 crores.
  • Expected Rent from Shops & Commercial complexes – RS.75 crores.
  • Optical Fibre Cable charges – Rs.300 crores.
  • Solid Waste Management Cess – Rs.30 crores.
  • Expected Collection of Fees & Fines – Rs.237.5 crores
  • Government of Karnataka Grants – RS.2891.06 crores.
  • Government of India Grants – Rs.11 crores.
  • Priorities to Maintenance works. Developmental and Welfare. Health. Education. Afforestation programmes.
  • Rs.401 crores for 24.01% Programmes (SC/ST programmes).
  • Rs.105.08 crores for Health Programmes.
  • Rs.1 crores for Installation of CC Cameras in BBMP Schools and Colleges.
  • Rs.130 crores for lake development.
  • Rs.40.4 crores for conservation of BBMP properties.
  • Rs.20 crores. Grants is earmarked for Maintenance and Construction of markets.
  • Rs.40 crores for Zonal maintenance works.
  • Rs.415 crores for solid waste management
  • Rs.55 crores for Maintenance of Street lights.
  • Rs.76.56 crores for Horticulture works.
  • Rs.250 crores for the development of newly added villages of CMC/TMC.
  • Rs.600 crores for providing Basic Infrastructure under Nagarothana Scheme.
  • Rs.41.52 crores for new and maintenance programmes in BBMP Forest Department.
  • Rs.147.33 crores for development of Storm Water Drain.

Other highlights

  • Priorities is given for the completion of Spillover Works and Administrative Reforms.
  • Extension of e-governance to All Offices.
  • All financial transactions to be made Online ..
  • Professional training to BBMP Staff.
  • Control over administrative expenditure
  • Recruitment of 4000 pourakarmikas which is under process will be completed during this year

With inputs from Shree D N

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BBMP aims to close pending bills with a realistic Budget

About Ambar Nag 0 Articles
Ambar Nag is the Manager, Open Works, at Janaagraha Centre for Citizenship and Democracy.

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