‘Unrealistic’ budgets harm progress

‘Unrealistic’ budgets harm progress
Deccan Herald

What is crippling the pace of Bangalore’s development? ‘Unrealistic’ budgets and lack of a development index for the wards – chorused financial experts in the City. Even as the Bruhat Bangalore Mahanagara Palike (BBMP) is gearing up to prepare the first budget for Greater Bangalore, the experts are sounding caution...

What is crippling the pace of Bangalore’s development? ‘Unrealistic’ budgets and lack of a development index for the wards — chorused financial experts in the City. Even as the Bruhat Bangalore Mahanagara Palike (BBMP) is gearing up to prepare the first budget for Greater Bangalore, the experts are sounding caution.

An interactive session of BBMP officials, resident welfare associations and NGOs, hosted by the Citizens’ Action Forum, on Saturday, zeroed in on the loopholes in the previous budgets and the need to adopt best practices in finance management. “BMP had presented a budget outlay of Rs 1,250 crore last year, but failed to raise even Rs 550 crore as revenue. Greater Bangalore only brings in more area, requiring 4,000 new jobs. How will BBMP generate revenue when property tax collection in old wards are equally bad as in the new wards? Can the BBMP raise 50 per cent funding for JN-NURM?” asked N Mukund, a participant.

Special commissioner of BBMP Gaurav Gupta admitted that Bangalore, unlike other metros, had been given a raw deal. “The city gets devolutions of less than 0.5 per cent from the State government. BBMP has no other resource like octroi or sales tax to fall back on. Apart from property tax, we hope to generate revenue by floating bonds. But the modalities like bond rating and tax rebate are to be worked out,” said Mr Gupta.

Misleading

“BBMP budget needs cleaning up as it is misleading,” declared Krishna Kumar, former secretary, GOI. “The security deposit paid by contractors, deduction of sales tax are shown under receipts (earning). But these funds cannot be used for any project as they are pass-through deposits,” he said.

“Streamlining of the various heads and accountability is a must. Huge amounts are collected as health cess (Rs 33 crore) and beggary cess ( Rs 6 crore). But health cess is going into solid waste management and welfare funds stop at distribution of sewing machines and autorickshaws,” added Mr Kumar.

Analysing the previous budgets of the BMP, Dr Vinod Vyasulu of the Centre for Budget and Policy Studies said, “Unrealistic budgets and inflated resources are harmful as shortage of funds will hamper projects.”

Ray of hope

A ray of hope is the Karnataka Local Fund Authorities Fiscal Responsibility Act, 2003, say experts. “The Act was put in place to help Local Fund authorities practice good budgeting, accounting and auditing with citizens’ participation. This helps manage expenditure consistent with revenue, formulate realistic budget and minimise deviations,” explained Kathyayini Chamraj of CIVIC.