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Municipal Finance

Employees to feel heat of BMC’s cash crunch

Monday, 14 December 2009 10:57 administrator
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Indain Express 14.12.2009

Employees to feel heat of BMC’s cash crunch

In a bid to tide over a financial crunch, the Brihanmumbai Municipal Corporation has decided to cancel allowances of its employees in the coming years. After burdening its kitty by revising employees’ salary in line with the Sixth Pay Commission and owing to poor revenue by the Octroi department, the cash crunched BMC has decided to save around Rs Rs 187.5 crore by not paying promised allowances to the employees. These include family planning allowance (Rs 28.65 crore), children’s education (Rs 157.56 crore) and special disability allowance Rs 1.35 crore.

We will not be paying these allowances till the financial condition of the BMC stabilises,” said chief accountant (finance) Ram Dhas.

Since the Octroi revenue dropped over the last few months due to global meltdown, the civic administration has predicted deficit up to Rs 4,500 crore in its capital budget till 2015, if the situation doesn’t improve. BMC has also sought the state government’s permission to draw an internal loan of Rs 2,500 crore.

It has already suggested ways to cut down expenditure and increase revenues by identifying new sources of income.

The civic law committee this week also approved the proposal to increase fees for renewing hawking licenses, displaying hoardings and advertising on signboards to increase the flow of income. While hawkers will have to bear the brunt of an 80 to 100 per cent hike for their licencing fee, advertisers will shell out 75 per cent additional charges. The new charges will be effective from January 2010.

The civic administration has estimated additional income of Rs 35 crore in its budget by hiking these fees.

The civic administration has issued a 20-point guideline to overcome the crisis with stringent measures, including no funding for large scale infrastructure projects, stalling recruitments and 25 per cent reduction in corporators fund—which is used for ‘unforeseen civic repair works’, beautification and construction of gyms and social welfare centres.

It has also written to state government asking it to clear the dues amounting to Rs 703 crore for property, water, sewerage and other taxes.

Last Updated on Monday, 14 December 2009 10:59
 

Cash-starved BMC to cut corporators’ funds by 25 pc

Thursday, 19 November 2009 10:59 administrator
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Hindustan Times 19.11.2009

Cash-starved BMC to cut corporators’ funds by 25 pc

Corporators will also feel the pinch of the cash crunch in the civic body.

The Brihanmumbai Municipal Corporation (BMC) has decided to cut the corporators’ local area development funds by 25 per cent.

The BMC is facing a revenue shortfall of an estimated Rs 2,000 crore due to the economic slowdown and real estate slump.

The latest casualty of its drive to cut down on expenditure is the local area development fund under which each corporator gets Rs 35 lakh every year to spend in his or her ward. The sum is not handed over to corporators but the civic body sanctions works of up to Rs 35 lakh going by the corporators’ recommendations.

The fund has often been at the center of controversy as citizen groups have been alleging that it leads to corruption due to a nexus between contractors and corporators. The fund is mostly used for building community halls and laying tiles on pavements.

Corporators are unhappy. Chairman of the Standing Committee Ravindra Waikar (Sena) said the civic body should revoke the circular on cutting funds immediately.

Acting Municipal Commissi-oner, R A Rajeev said, “The circular is effective at least for one more week and later we will submit all facts about the financial situation of the civic body before various political party leaders. It would affect corporator fund and development fund too.”

The BMC has also decided to stall new projects and cut down contracts for civil works like replacing tiles on pavements and constructing community halls and public toilets by 25 per cent. Instructions have been issued to all wards. This would save at least Rs 2 crore in each ward.

The BMC, one of the richest civic bodies in the country with a budget of Rs 19,000 crore, has been facing a financial crunch for the last four months. An estimated fall of 10 to 15 per cent in its revenue due to a drop in octroi collections and the burden of increased salaries of the 1.10-lakh employees due to the sixth pay commission have forced the BMC to cut corners.

Last Updated on Thursday, 19 November 2009 11:01
 

Realty company to pay MCD for false case

Wednesday, 18 November 2009 11:06 administrator
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Indian Express 18.11.2009

Realty company to pay MCD for false case

A trick too many proved costly for a realty company, with the Delhi High Court ordering it to pay Rs 2 lakh to the Municipal Corporation of Delhi (MCD).

After getting a de-sealing order for a building in Safdarjung Enclave, the firm resumed unauthorised construction. When the MCD found out, it obtained a sealing order from the Lieutenant-Governor.

The company immediately applied for a second de-sealing order, that too with the L-G’s office. When the application was dismissed, the builder approached the High Court.

The game was, however, over when MCD counsel Sanjeev Sabharwal recounted the story before Justice Gita Mittal, who took a stern view of the fact that many “precious” court hours had been wasted on the false case of the builder.

“The MCD deserves to be compensated for the costs as well as judicial time,” Justice Gita Mittal said in her order.

“Petitioners (Chiranji Properties Private Limited and its director) shall pay an amount of Rs 2 lakh to the MCD,” the court directed. “The application was rejected by the L-G because the petitioners took advantage of the earlier de-sealing order for his property. The property was de-sealed to give an opportunity to rectify, but only led to another unauthorised floor being added,” Sabharwal submitted.

The matter is posted for hearing on March 26 next year.

Last Updated on Wednesday, 18 November 2009 11:08
 
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