The Hindu 27.06.2011
White Paper on BBMP finances sought
Addressing presspersons here on Saturday, he said that if the Government had released Rs. 2,800 crore State grants, the civic body's finances would have been in a healthier condition.
The grant of Rs. 600 crore in 2008-09, Rs. 900 crore in 2009-10 and Rs. 1,300 crore in 2010-11 for the civic body from the State Government was yet to come, he said.
“The BJP presented a gargantuan budget for Rs. 8,848 crore for 2010-11 fiscal. However, no work has been taken up. Where did the money go, since most works are going to be mentioned in the 2011-12 budget as spill-over work?” he asked.
Hundi system
Seeking action against the BBMP's Chief Accounts Officer, Mr. Reddy said that due to his “negligence”, the civic body had to pay Rs. 4.06 crore of the tax payers' money as interest to banks for borrowings made under the Hundi system.
Under the system introduced three years ago, contractors could produce bills at some banks with which the BBMP had entered into a memorandum of understanding for payment, when the BBMP cannot clear them due to fund paucity.
Banks' role
The banks release the amount and retain 6.5 per cent of the total bill and the BBMP has to pay the bank within six months. “However, due to the Chief Accounts Officer's ‘negligence', the BBMP had to pay Rs. 4.06 crore additionally as interest. Bills up to July 2010 for various works have been cleared under the system.
“The tax payers have the right to know whether the Standing Committees or the BBMP Council had permitted clearing contractors' bills through this system,” Mr. Reddy said.
