In monetary pain

In monetary pain

Poor financial discipline, rampant corruption and snail’s pace of projects have left the City’s three major civic bodies – BBMP, BDA and BWSSB – on the brink, as fiscal 2011-12 approaches a forgettable end

Building castles in the air. That might be an oft-repeated cliche, but the Bruhat Bangalore Mahanagara Palike (BBMP) will be doing just that when it drafts its budget for 2012-13.

One look at what the Palike proposed in its last three budgets, and what it actually managed to do, will convince you of a planning process gone completely haywire, a financial process grossly mismanaged and a citizenry left to virtually fend for itself.

BBMP’s current financial health - or the lack of it - mirrors four critical ailments: A scary dearth of financial discipline, rampant misappropriation of funds as the scams galore indicate, deepening debt and giving out “collaterals” such as the Krishna Rajendra Market to meet loan requirements. The Palike is precise while using the term “collateral,” since it helps to refute the charge that it is mortgaging its properties.

These ills have not stopped the Palike from drawing out lavish plans year after year. The debts of about Rs 3,000 crore notwithstanding, the Palike had come out with a budget for 2011-12 with an outlay of Rs 9,196 crore.

In 2011-12, it was not a cakewalk for the Palike to prepare the budget and get it okayed by Chief Minister Sadananda Gowda, before tabling it in the Council. The budget, which is supposed to be tabled on the last day of the financial year i.e. on March 31, could be presented in the Council only on August 18 last year.

This did not mean a go-ahead to carry out projects as mentioned in the budget. The next roadblock was the delay in getting the State government’s nod to the budget, which came only in the first week of November last year. However, the projects mentioned in the budget could not be taken up till the middle of December and the old works too came to a grinding halt.

Now, with only 40 days left for the end of the current fiscal, the Palike has not made any progress in implementing most of its works. Against the anticipated receipts of Rs 9,316 crore, the civic body could accumulate only Rs 2,275.64 crore by the end of January this year. So were its payments, which remained at 2,645.48 crore against the expected Rs 9,398.54 crore.

The major sectors from where the Palike had expected huge income were finance and accounts (Rs 2,152 crore), revenue (Rs 2,736.75 crore), town planning (Rs 1,116.4 crore), engineering-public works (Rs 1,354 crore), engineering-projects (Rs 938 crore), engineering-capital investment plan (Rs 315 crore) and advertisement (Rs 198 crore).

Except the revenue department, none could generate more than 10 per cent of the anticipated income. The revenue department succeeded in generating Rs 1,251.46 crore.

The state of payments is also no different. Against the anticipated Rs 9,398.54 crore, the total payments made by the Palike so far are a mere Rs 2,645.48 crore.

Roads, drains, footpaths in disarray

While shoddy execution of works has become the order of the day, the Palike has no funds to repair battered roads, damaged drains and broken footpaths. Besides the sorry state of roads, parks, drains and solid waste management, the impact of the non-implementation of the budget is quite evident in the welfare scheme for weaker sections.

The Palike had roped in the Karnataka Rural Infrastructure Development Limited to construct independent houses for people from SC/ST communities under the 22.75 per cent scheme. However, for the last one-and-half years, many families are running from pillar to post to get the construction of their houses completed. The Palike also could not avail benefits of self-employment schemes to help the economically and socially weaker sections.

Fearing a severe backlash from the electorate for failing to fulfill the promises of providing the benefits of these schemes, the corporators are making private arrangements in many areas to provide self-employment kits to the people. Two months ago, Bommanahalli saw MLA Satish Reddy distributing rations and self-employment tools such as sewing machines and iron boxes to a few families.

The JD(S) floor leader in the BBMP Council, Padmanabha Reddy, minces no words while calling the Palike budget a ‘bogus.’

“Time and again I have been asking the Palike administration to withdraw this bogus budget as it is serving no purpose.”

Another JD(S) leader and finance expert, N Krishna Kumar, blamed the Palike for presenting a budget worth a whopping Rs 9,000 crore, only to borrow more money to meet its financial requirements.

He says, “The BBMP’s financial position is as bad as Satyam Computers and there is a need for an external audit. Tragically, the BBMP authorities do not know what they own and what they owe. They have no idea from where the money comes and how the money should be spent.”

It is the practice in the Palike to table a budget and then implement the planned works for the next year. But, small works taken up in 2008-09 went on for the next two to three years. This led to the work code scam involving the contractors and engineers.

The scam was exposed by the media, compelling the Palike to stop carrying over previous years’ works. The year 2010-11 saw a semblance of financial discipline when the Palike revised its budget estimates from Rs 8,446.75 crore to Rs 3,517.29 crore. This financial year, the Palike is back to its old ways with a revised budgetary outlay of Rs 9,196 crore.

There are strict instructions by the State government not to undertake fresh projects, but complete the old ones.

Clearing backlogs

Deputy mayor S Harish outrightly refutes the allegation that the budget is bogus. “We had to table a budget of this size for this fiscal as we had announced some major projects in 2008-09 and 2009-10 in anticipation of huge revenue from Akrama-Sakrama scheme.Unfortunately, the scheme came a cropper. We are, in fact, trying to clear the backlogs of the two previous years through this year’s mammoth budget,” explains Harish.

He contends that it is due to the present government’s efforts that the revenue from property tax increased from Rs 600 crore to Rs 1,800 crore this year. He expects a revenue of at least Rs 2,000 crore for the Palike next year, once Property Identification (PID) comes into effect.

He, however, admits that the Palike could not get special grants from the State government in the last two years, which resulted in non-implementation of projects.

Chairman of the Standing Committee on Taxation and Finance, Manjunath Raju, says no government could execute 100 per cent of the works mentioned in the budget.

“Successive governments could not achieve even 50 per cent of their budgetary targets. We will be able to achieve somewhere near 40 per cent of our budget,” he adds.

“When we have a loan of Rs 3,000 crore, the actual size of the budget should be seen as somewhere around Rs 6,200 crore. We will be successful even if we implement half of the works worth Rs 6,200 crore,” says Raju.

 

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