The Third Finance Commission, which will submit its report to the State Government on  June 30 2008, will, among others, recommend to provide adequate funds to Bangalore Mahanagara Palike (BBMP) to upgrade infrastructure in the city, the Commission Chairman A G Kodgi said.

Addressing reporters, he said BBMP’s annual revenue is much less compared to other major cities of the country like Mumbai, Kolkata, Delhi, Surat or Hyderabad. Though the Government abolished Octroi over a decade ago, the BBMP has not been compensated for the loss of one of the major source of revenue. The local body used to earn around Rs 300 crore through Octroi when it was abolished in mid-90’s, he added.

The Commission, comprising three members including the Chairman, on Tuesday visited BBMP main office and gathered information on its financial condition. During 2007-08, BBMP has collected Rs 456 crore as property tax, Rs 231 crore as non-tax revenue and Rs 161 crore in the form of debt, Kodgi said.

“Due to paucity of resources, BBMP has not been able to do even the core functions like providing underground drainage, road asphalting, solid waste management and others. Hence, it is necessary the Government extends its helping hand to BBMP. The Government has to make good the loss after abolishing Octroi duty,” he stated.
According to an estimate, BBMP needs to spend Rs 20,000 crore by 2012 on infrastructure. As of now, it needs a minimum of Rs 2,000 crore to asphalt roads and Rs 600 crore to provide basic amenities in its newly-added areas (erstwhile CMCs, TMC and 110 panchayats), he said.

Presently, BBMP has been receiving Rs 322 crore as annual grants from the Government as per the recommendations of 2nd Finance Commission.

Kodgi further said there is an urgent need to address the problem of traffic congestion in Bangalore. Projects like road widening, pavement clearance, removal of encroachments and construction of flyovers and underpasses have to be implemented on top priority.

BBMP has given some proposal to the Commission to be incorporated in its report to improve its financial condition.

However, the Commission’s recommendations will not be applicable for the year 2008-09, as the State Government has already presented the budget for the fiscal.