BBMP in a budget paralysis

The Bruhath Bengaluru Mahanagara Palike (BBMP) is in an incredible crisis: Its budget is on hold! Meaning, it cannot issue a single work order, call for tenders or spend an additional rupee to address an unfolding crisis. (DH File Photo)

Battling a chaotic monsoon season, a twister of commute woes and an unprecedented spike in Dengue, the Bruhath Bengaluru Mahanagara Palike (BBMP) is in an incredible crisis: Its budget is on hold! Meaning, it cannot issue a single work order, call for tenders or spend an additional rupee to address an unfolding crisis.

Just why did the Palike reach this astounding state of affairs? Soon after taking over as Chief Minister, B S Yediyurappa articulated a reason to the Urban Development Department (UDD): The budget was approved by the previous government in May but had no State Cabinet nod, and thus was illegal.

Now, what do the numbers say? On May 23, the Palike’s Taxation and Finance Standing Committee Chairperson had presented a budget outlay of Rs 10,688.63 crore for 2019-20. This was further increased to Rs 12,957.79 crore by the BBMP Council.

Revenue-spending gaps

But there was a problem: A huge gap in expected revenue and expenditure, as the then BBMP Commissioner N Manjunath Prasad contended. Overlooking the Palike Finance Department suggestion, the original outlay of Rs 7,400 crore was inflated. Prasad himself wrote to the UDD to restrict the budget to Rs 9,000 crore.

Of course, the State Cabinet could increase the budget outlay. But where was a Cabinet? In the period between May 23 and now, as political crisis after crisis had the entire administration in a tizzy, governments changed and a new Cabinet has assumed power only this week.

Predictably, the crisis has triggered a war of words in the Palike Council. The air is thick with charges of the government’s repeated interference in BBMP’s administration.

While the government cites procedural lapses, the Council’s ruling party members blame it all on ‘politics of vendetta’ that has withheld all civic projects in the Palike limits.

Execution issues

But the current state of the city’s civic governance structure also exposes big gaps in investments and implementation, be it linked to infrastructure or addressing emergencies. “Bengaluru requires massive infusion of funding into infrastructure and services to retrieve it from the present crisis of quality of life,” notes Srikanth Viswanathan, Chief Executive Officer, Janaagraha.

“Higher public investments in infrastructure,” he notes, “needs to be accompanied by more effective and efficient project execution i.e. faster tendering and work commencement, timely project delivery at high-quality and project completion within pre-defined timelines.”

This mandates a strong in-house mechanism to generate and manage funds. But the reality is grim. Elaborates Viswanathan: “While BBMP’s financial position has improved in the past four years, it is far from robust.  The other civic agencies such as the BWSSB and the BMTC are as bad or worse in respect of their financial position and performance.”

Dependence on State

The agencies, all of them, are highly dependent on state government grants and schemes. “They do not have predictable medium-term funding. Their own revenues are woefully inadequate and procurement and project execution tardy and opaque.”

In the immediate context, the virtual budget paralysis has left the corporators worried about the backlash from the struggling citizens. Across the city, sparked by infrastructural delays, fiscal mismanagement and apathy, citizens and civic groups are justifiably outraged.

Corporators say delayed approval of the budget would force them to put off implementation of works assured to citizens at ward committee meetings.

Rules don’t help

Is there a way out of these recurring crises? Do existing laws allow for a transformation in the fiscal governance?

“Progressive laws and policies such as the Karnataka Local Fund Authorities Fiscal Responsibility Act 2003 (KLFAFRA) and the Karnataka Municipal Accounting and Budgeting Rules 2006 (KMABR) do not apply to the BBMP or other city agencies, even as the latter applies to all other municipalities in Karnataka,” Viswanathan explains.

The KLFAFRA requires medium term fiscal plans and other measures for better fiscal and budgetary discipline. The KMABR mandates audit of annual accounts by independent Chartered Accountants (as in the case of private companies), citizen participation in budgeting and publication of city management reports. “KLFAFRA and KMABR have the potential to transform quality of financial governance in Bengaluru’s civic agencies.”

Participatory budgeting

Bengaluru’s elected leaders can fulfil the aspirations of their voters only if they are able to ensure adequate budgets and proper execution of works in their constituencies, he notes. “Bengaluru’s civic leaders can nurture their neighbourhoods only if they blend old world activism with participatory budgeting and ‘following the money.’”

The question now, as he articulates, is this: “Can the Bedas and Bekus of Bengaluru make common cause and ask for implementation of KLFAFRA and KMABR to all civic agencies of the city?”

Civic groups, the Citizens for Bengaluru (CfB) in particular, have been active in first creating a robust network of truly representative ward committees in the city. The next step has been daunting: To get the ward panels debate and decide budgetary preferences.

Ward-level budgeting

Srinivas Alavilli from CfB says the ward committees should take ownership of the BBMP budget. The budget itself should be prepared from the ward level with local inputs by the members and citizen groups. “This way, the corporators too will be hugely benefited with ward-level data.”

The budget preparation, as Alavilli observes, is currently “very adhoc and totally centralised.” The process itself is entirely dependent on the state government. “The entire finances depend on the mercy of the government. It is very unfair to let a political turmoil take hostage of the city.”

Bengaluru, he says, is lucky to have the committees in place. “But now, they are mostly limited to grievance redressal. This can change once members are trained in budget inputs. Hopefully, the new commissioner will start the training process.”

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