Janaagraha analyses BBMP budget 2016-17

The first budget of the BBMP council which came into power in September 2015, was presented on March 28, 2016. The key highlights of the Budget are given below:

1. An ambitious budget outlay of Rs. 8,991 crores, an increase of 98% over 2015-16 RE of Rs.4,542 Crores. Since 2013-14, BBMP has consistently overestimated its budget by 60%, except 2014-15 and 2015-16.

Particulars	2016-17 BE	2015-16RE	Increase	% increase
Special Infrastructure Project	2158	–	2,158	100%
Property Tax	2300	1350	950	70%
Beggary, Library, health cess	552	324	228	70%
Building plan fees etc	248	182	66	36%
Engineering works	768	349	419	120%
Town planning	442	329	114	35%
Advertisement	146	4	142	3550%
Others	2377	2004	372	19%
Total	8991	4542	4,449	70%

(Rs.in crores)

2. Loans – data on loans availed during 2009-10 to 2013-14, which has principally resulted in the current debt crisis in the BBMP.

Loan Availed (RsCr)
2009-10	1,550
2010-11	721
2011-12	788
2012-13	539
2013-14	277
	3,876

Rs. 22.16 crores was borrowed from KUIDFC for the development of 17 lakes and is fully repaid. Rs.435 crores has been repaid by the State Government, in January 2016.

BBMP has been able to pay only half the above loans outstanding so far. The current total outstanding liability of the BBMP is likely to be close to Rs 4,000 cr, roughly half being loans and half being pending bills. BBMP’s own revenues for a full year will be less than or at best equal to this amount.

(The absence of timely audited balance sheets makes it difficult for anyone (including the BBMP senior management/State Govt/citizens) to understand the true financial position of the BBMP)

Unless there is a specific focussed effort to restructure/address this liability of Rs 4,000 cr in a phased manner over say 2 years or so, BBMP will continue to be financially constrained.

3. Action will be taken to give HID number to authorised advertisements hoarding like PID no to properties in the website of BBMP which will help the public in viewing the size, place and photo of the hoarding

4. Recruitment process of 4000 Poura karmikas for effective collection and transportation of solid waste, action will be taken to complete the process in this year. 5. Ward wise BBM Property taxes will be provided in the website shortly, currently it shows the Zone wise property taxes collected

6. “E-Asthi” and “Namma Asthi” will help in applying the khatha through online only

7. Rentals from markets are proposed to be revised to market rates, to generate an additional income of Rs.50 crores

8. Solid waste management cess collected along with property tax expected to be Rs.75 crores this year

9. Rs.237.5 crores reserved for construction of 5,940 houses, 30 houses per ward at a cost of Rs.4 lakhs per house

10. 118.8 Cr to be spent on 2,970 houses,15 houses each in all wards for backward caste, minority & EWS category

11. Rs. 100 crores to be spent for Lakes, Rs. 50 crores from SFC, and Rs.50 crores from Special Infrastructure program

12. Development of important road network of old and new commercial areas of the city under the TENDERSURE Model

13. Development of 1500 kms length of roads to provide alternative ways in road network

14. Rs. 300 crores to be spent on Storm water drain works out of the Rs.2,158 crores of State Grant on Infrastructure Project.

15. Rs. 300 crores to be spent on Solid Waste Management and disposal and other developmental works related to SWM.

Financial transparency in the BBMP

· BBMP ranked 2nd out of 21 major Indian cities in transparency and citizen participation, second only to Hyderabad, in Janaagraha’s Annual Survey of India’s City-Systems 2015

· BBMP is the only municipality among these 21 cities have disclosed full information on individual civic works, including scanned copies of underlying document (refer http://218.248.45.166:8092/vssWB/)

· Currently one can also view details of property tax collections by zone, by ARO etc. (refer http://bbmp.gov.in/en/web/guest/property-tax-collection-report )

· BBMP has also revamped its website and put out data on its estates and markets, parks, playgrounds, open spaces, public toilets, job numbers etc.

· BBMP has completed the recording the road history of all roads including the entire information under BBMP limits. The details will be uploaded in the BBMP website during the year

These are small first steps, but the direction towards financial transparency is laudable. Implementation of the KMABR in 2016-17 will further strengthen transparency and citizen participation at the BBMP, besides ensuring annual accounts are audited by independent Chartered Accountants before 31 Jul each financial year. So that needs to be cleared by the State Government as soon as possible.

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I. An ambitious budget, 98% increase over the 2015-16 RE

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· Increase in receipts by Rs.4,449 crores, as compared to 2015-16 RE

o Special Infrastructure Plan – Rs.2,158 crores

o Increase in estimates of income from property tax – Rs.950 cr

o Beggary, health & library cesses increase by Rs. 228 cr

o Engineering works increase by Rs.419 Cr

· High variance of >60% till 2013-14

· 30% reduction in 2014-15 BE as compared to 2013-14 BE

· A further 10% reduction in 2015-16 BE as compared 2014-15 BE

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II. 71% increase in property tax collection in FY 16; strong focus on collections can sustain this healthy trend in 2016-17

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Actual property tax collections ranged between 23% to 60% of budgets up to 2014-15;

71% achieved in 2015-16.

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III. Only 14% of BBMP’s total receipts is contributed by own revenues other than property tax, ie, building licence fee, advertisement tax, etc. BBMP needs to focus on optimising these revenue streams in 2016-17

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Other income as a % of total income

· Fees and Fines – 6.3%

· Advertisement tax – 1.6%

· License fees – 0.7%

· Receipts from BBMP Properties –0.6%

· Service charges – 1%

· Other income – 5.1%

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IV. Dependence on State Grants remains high; lack of predictability cause for concern

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· Dependence on State Grants is increasing with 2016-17 grant budgeted at 47% of the total receipts

· The State Budget of 2016-17 has announced Rs. 4,222.73 crores to BBMP, Rs.13 crores from AMRUT

· State would do well to strengthen the BBMP institutionally by granting more revenue powers to the BBMP, restructuring its debt and pending bills in addition to year-on-year grants

This analysis is part of MyCityMyBudget, initiative of IChangeMyCity to engage citizens, councillors and BBMP officials on BBMP budgets.This has been written by Bharathy Jayaprakash of Janaagraha.

All data is sourced from respective Budget books

2014-15 actual data is the revised estimate taken from the budget book of 2016-17

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