BBMP ad scam Rs 2,000 cr or one zero too many?

Is the Rs 2,000-crore net loss in Bruhat Bengaluru Mahanagara Palike (BBMP) advertisement revenue in the last eight years realistic or is it an exaggerated and illogical assumption of an enthusiastic officer who sees a scam?

Officials and advertisers say the loss is inflated. They say advertisement revenue has always been meagre compared to property tax. The civic body’s property tax from16 lakh properties is pegged at Rs 2,456 crore for the year 2015-16.

There has been no increase in advertisement revenue in the last eight years since the BBMP “officially” stopped granting permission to new hoardings. The advertisement revenue in the last five years is close to Rs 30-35 crore.

“There is scope to double the advertisement revenue if the authorities strictly collect taxes,’’ says a former assistant commissioner who worked in the advertisement wing. 

Advertisers R Krishnadevaraya and Manmohan Singh say the annual turnover in hoarding business in Bengaluru is around Rs 100 crore. 

This, they say, includes revenue from 4,000 illegal hoardings which are not accounted for. This means the annual business from 3,000 legal hoardings is less than Rs 50 crore. 

Sector experts, however, say the annual turnover in the city from hoardings is close to Rs 200 crore in Bengaluru. 

Assistant Commissioner (Advertisement) K Mathai, however, says his estimate of Rs 2,000 is conservative and not exaggerated. The officer who did a study in Shantalanagar ward, estimated that on an average, the annual tax that the BBMP could collect was Rs 785.26 crore. 

And for eight years, Mathai, in his report says it is Rs 6,282.49 crore. Officials and advertisers, however, differ on the methodology adopted by Mathai and say that not all wards generate revenues that Shantalanagar, which is in the central business district (CBD), does. 

The density of hoardings too is high here which may not be true in other wards.Mathai, however, says that while calculating the net loss, he has taken into consideration the loss caused by hoardings and advertisements permitted by the police, Bengaluru Metropolitan Transport Corporation (BMTC), railways and shop boards which were not taken into consideration earlier. 

Mathai has also calculated the revenue from illegal hoardings while BBMP does not collect any tax from them fearing that accepting tax from such exhibits would amount to regularisation.  n Rs 1,340 crore from 23,000 shop board advertisements  n Rs 216 crore from 2,000 mobile towers n Rs 100 crore from oversized advertisements n Rs 33 crore from 150 Railway advertisements n Rs 27 crore from 20,000 police department advertisements n Rs 12 crore each from petrol bunks and gantry advertisementn Rs 10 crore from advertisements exhibited in cinema halls and from racing and stadia advertisementsn Rs 7 crore from mobile display advertisementsn Rs 5 crore each from cable TV and from ads on vehiclesn Rs 5.18 crore from telephone kiosks, BMRCL advertisements, advertisements on footpath benches and walls  

Move to cover up scam?Meanwhile, sources say there is a move to cover up the scam. Sources in the Lokayukta say the advertising mafia is recklessly removing illegal hoardings. ''The mafia (officers, politicians and advertisers) is removing illegal hoardings without filing cases, collecting taxes or slapping penalties,'' a source in the anti-corruption unit said. Lokayukta officials say it is another fraud being played out on the behest of those at high places so that when the CID makes enquiries, they can claim that there are no illegal  hoardings and advertisements. The state government had recently handed over the advertisement scam to the CID. 

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