The Times of India         20.11.2013

NMC revenue going down, but Rs 200cr loan proposed

NAGPUR: The Nagpur Municipal Corporation (NMC) house will discuss a proposal to raise Rs200 crore loan in the general body meeting on Wednesday. But the civic body's stand on the proposal seems questionable, if revenue data is considered.

Even as the civic body is facing financial deficit due to strong opposition to local body tax (LBT), revenue from other major sources has also dwindled due to the apathy of office bearers and administration. The question that needs to be asked is whether NMC is being pushed into a debt-trap due to its failure in implementing developmental projects as planned.

Standing committee chairman Avinash Thakre had directed the administration to moot a proposal seeking approval to raise Rs200 crore loan. The reason cited by Thakre was financial deficit of Rs150 crore in this fiscal following replacement of octroi by LBT.

According to LBT data, revenue from octroi was Rs296 crore between April 1 and November 18, 2012. In the corresponding period in this fiscal, revenue from LBT is Rs187 crore, including Rs34 crore from stamp duty. There is a financial deficit of Rs109 crore, but not Rs150 crore as claimed.

However, revenue shortfall has hit other departments too, including property tax department. Thakre set a target to recover Rs222 crore from property tax in this fiscal. Up to November 18, revenue was Rs61.76 crore as against last fiscal's Rs69.41 crore.

NMC sources blame this on non-implementation of capital-based property tax and the administration's apathy in implementing six-monthly tax system.

Similarly, the water works department handed over water works to a private operator, but revenue has not increased. The revenue was Rs72.77 crore as on October 31, as against last fiscal's Rs64.70 crore. Of this 7.68% increase, 5% is due to the water tariff hike. In fact, the water works usually witness around 10% natural growth every year.

Overall NMC revenue as on October 31 stands at Rs372 crore as against last fiscal's Rs474 crore, a deficit of Rs102 crore.

A couple of days ago, Thakre himself said that the revenue from town planning department too had come down this fiscal. However, the BJP-led ruling alliance keeps blaming the financial deficit on LBT. Interestingly, the BJP had itself fuelled the protests against LBT and even filed a petition in the high court.

Now, the civic body is proposing a Rs200 crore loan to add to the current debt of around Rs220 crore.