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Financial Management

No hike in property tax, AMC budget up by Rs 400 crore

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The Times of India 05.02.2010

No hike in property tax, AMC budget up by Rs 400 crore

AHMEDABAD: The ruling Bhartiya Janata Party (BJP) at Ahmedabad Municipal Corporation (AMC) budget turned down the property tax hike proposed by municipal commissioner on Thursday.

However, for those who paying taxes regularly, AMC offered a 10 per cent rebate on tax bill. Standing committee, chairperson, Asit Vora said, “It is to encourage regular tax payers in city for the timely payment of their dues.

Earlier, AMC authorities have been extending rebate scheme to tax defaulters only.” In a move to bring in transparency, AMC authorities are planning to computerise and place online all the tender details right from issuing, to final allotments and also payment details for cross checking its veracity to avoid controversy. Vora said, “In a pilot project we started this system in west zone of AMC and will now further implemented it in other zones.”

This year’s budget held importance as municipal election are due now. It saw a substantial jump of Rs 410 crore in budget allocation from earlier proposed budget of Rs 3,301, taking the final figure to Rs 3,711 crore. The AMC authorities are also working around its finances in the absence of octroi income — which accounted for nearly 70 per cent of AMC’s income.

The civic body is planning to garner revenues to the tune of Rs 100 crore by selling extra Floor Space Index (FSI) and premium plots in the city limits. However, this time the budget is propelled by the golden jubilee celebration of state government and thrust on improving basic infrastructure facilities in municipal limits.

One of the high points of the budget is starting of new centre of stem cell therapy and embalming certificate, essential for outstation dead bodies at VS Hospital. Leader of opposition, AMC, Surendra Baxi, said, “The budget is populist by nature and there is hardly any new projects for citizens. Most of the ongoing projects of last financial year are included in it.”

On absence on any mega projects, a senior AMC official said, “The focus is on completion of existing capital projects in the city, and improving the civic amenities.”
 

BMC cash crunch may pinch you

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Hindustan Times 05.02.2010

BMC cash crunch may pinch you

If the Brihanmumbai Municipal Corporation (BMC) does not implement cost cutting and revenue boosting measures, it could run into a deficit of Rs 4,512 crore in the next five years.

These were the estimates in a confidential report given by the finance department to the standing committee two months ago.

A deficit budget indicates that the expenditure is more than the revenue. The civic budget for 2010-11 did not propose any tax hikes.

But Mumbaiites cannot celebrate yet. A look at the methods the BMC plans to adopt to mobilise more funds shows that citizens may end up being burdened.

The cash crunch is due to a dip in octroi revenue and increased salary expenditure.

Expecting a revenue shortfall of up to Rs 6,000 crore, the BMC is mulling over a hike in octroi, revising property tax and charging builders a premium on additional floor space index above 0.33. Increase in octroi means prices of commodities will rise. A revision of property taxes will lead to a 100 per cent hike in tax for the island city and 75 per cent for suburbs.

A premium on additional FSI will cause real estate prices to escalate. “Superficially, the administration is saying that there will be no increase in taxes, but by adopting all these measures it will end up burdening the common man,” said Congress corporator Sameer Desai. Budget 2010-11 has been raised by proposing a loan of Rs 6,000 crore from internal and external sources.

The BMC’s internal special funds have been exhausted. “We have decided to cut establishments costs to 40 per cent from 65 per cent. Many development projects will be undertaken on build-operate-transfer basis,” said Municipal Commissioner Swadheen Kshatriya.

Next year’s deficit is expected to be Rs 603 crore. The BMC last had a budget deficit of Rs 644 crore in 1999.

Last Updated on Friday, 05 February 2010 08:30
 

BMC keeps fist tight

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Hindustan Times 04.02.2010

BMC keeps fist tight

The finance crunch that the Brihanmumbai Municipal Corporation (BMC) is going through reflected in the disappointing budget for the fiscal year 2010-2011.

The budget was unveiled on Wednesday.

No new projects will be undertaken and a few projects such as concretising of roads, reconstruction of hospitals and underground parking lots at Crawford Market have been postponed.

The Mumbai Eye — to be built on the lines of London Eye -— does not find a mention in the list of projects planned for this year.

The budget of Rs 20,417 crore has shown an increase of merely 4 per cent in comparison to last year’s budget.

The BMC managed this increase by taking a loan of Rs 6,000 crore to compensate for the dip in octroi revenue and the increased burden of salaries revised salaries according to the Sixth Pay Commission.

The only highlight of the budget is the priority given to water supply augmentation projects with Rs 2,721 crore allotted to them.

This money will go towards projects such as the Gargai dam, replacement of old water mains and the ambitious Middle Vaitarna dam, which promises an additional 455 million litres of water every day.

The main reason for the BMC’s revenue crunch is the dip in octroi revenue by 10 per cent due to the economic slowdown.

Octroi and property tax are the BMC’s prime revenue-generating tools and contribute almost one-fifth of the annual civic budget.

Implementation of the Sixth Pay Commission this year has also increased the burden on the civic body’s annual revenue expenditure by Rs 1,800 crore.

“I have requested the head of the Departments to cut down on expenses which are unnecessary and to see to it that projects which are approved are completed without an increase in their costs,” said Municipal Commissioner Swadheen Kshatriya.

Kshatriya said the BMC is contemplating an increase in octroi charges and considering undertaking pay scale revisions — according to the Sixth Pay Commission — once every 10 years instead of five.

 


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