Rein in BBMP’s finances

Rein in BBMP’s finances

Financial issues

The Bruhat Bengaluru Mahanagara Palike is an unbridled horse with absolutely no control over its finances, with poor fiscal discipline and a total absence of proper auditing procedures completely wrecking the civic body. This state of affairs will hopefully end soon with the state government proposing to bring BBMP under the purview of two laws—the Karnataka Local Fund Authorities Act, 2003, and the Karnataka Municipalities Accounting and Budgeting Rules, 2006, which aim at ending the prevailing financial anarchy. Ironically, while all other municipalities come under the ambit of these laws and the state government itself is required to present a revenue surplus budget and maintain the fiscal deficit within limits prescribed by the Karnataka Fiscal Responsibility Act, the BBMP is law unto itself, with absolutely no provision for oversight. The size of the BBMP budget for 2019-20 as approved by the state government stands at Rs 11,648 crore as against the estimated revenue of Rs 7,500 crore, a deficit of Rs 4,148 crore. With the gap between the revenue projections and actual realisation increasing year after year and in the absence of any plan to bridge the deficit between expenditure and receipts, the budget is clearly unsustainable. The BBMP has got away with murder, so to speak, with no internal audit of its accounts being conducted for about a decade, even after several irregularities were pointed out by the Comptroller and Auditor General (CAG).

While the elected representatives of the civic body have so far stalled any attempt to usher in accountability and continue to do so, the state government should not go back on its resolve to financially rein in the BBMP. Once BBMP comes under the fiscal responsibility laws, independent empanelled chartered accountants will have to audit the accounts and submit them before July 31 every year. The laws will ensure standardised accounting and budgeting procedures and a Management Information System (MIS), all of which will not only instil fiscal discipline but also make it difficult for the corporation to deviate from approved plans.

These long-pending financial reforms are a welcome move as they will usher in transparency and accountability in the BBMP and hopefully transform the governance of the city. However, the BBMP is not alone when it comes to lack of financial prudence, and the government should consider extending these laws, with appropriate modifications, to other agencies like Bengaluru Water Supply and Sewage Board, Bengaluru Metropolitan Transport Corporation and Bengaluru Development Authority. Assuming that politicians will not succeed in scuttling the process once again, the government has made a good beginning, though much will depend on the implementation.

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