The Deccan Chronicle 06.08.2010

BBMP budget outlay may be doubled

The major revenue spinner for the Palike will be property tax, advertisement fee and the fee earned from trade licences. Last year, BBMP had targeted Rs 1,100 crore from property tax but could collect only 797 crore despite implementing the revised Self Assessment Scheme (SAS).

The revenue generation in the other sectors is no different. Civic expert and Janaagraha co-founder Swathi Ramanathan is not surprised and says BBMP has more often than not, failed in meeting revenue targets. As a result, it has been borrowing heavily from various financial institutions though its capacity to repay these loans is in doubt. The cash strapped BBMP already owes Rs 2,334 crore to various financial institutions.

Considering the revenue generated by BBMP, the civic body would be forced to borrow at least 2,000 crore from financial institutions even if funds from the state government and the revenue earned from the Akrama Sakrama scheme for regularisation of illegal property is taken into account.

With this being the revenue generating capacity of BBMP, there is no point in presenting an inflated budget, asserts Swathi. “The BBMP would be a lot better off if it prepared a budget, taking into account the actual revenue and the anticipated expenditure instead of being carried away by grandiose projects,” she added. “Last year, the BBMP has presented budget for about Rs 4,000 crore. We will have to analyse what was the actual expenditure. The expenditure usually does not touch the budgetary allocation, which is a bad sign,” she said.

Speaking to Deccan Chronicle, chairman of the BBMP standing committee on taxation and finance, P.M. Sadashiva said the state government has assured financial assistance to the tune of Rs 1,500 crore. With the government approving the Sakrama Bill, the BBMP could anticipate an additional 1,500 crore as revenue while the inflow from property tax could run into Rs 1,500 crore.

“With the help of Geographical Information System (GIS), at least seven lakh properties which were out of the property tax have been identified. They would be brought under the tax net,” he said. These revenue receipts would help BBMP to comfortably execute the projects and plans proposed in the Budget, he added.