Infrastructure to turn costly for B'loreans

Infrastructure to turn costly for B'loreans
DH News Service, Bangalore:
Bangaloreans may have to soon shell out more by way of cess and surcharge for improved infrastructure in the City.


Chief Minister B S Yeddyurappa on Thursday informed the chairman of the Prime Minister’s Economic Advisory Council, Dr C Rangarajan, who was on a visit to the City, that the State government would take steps for additional resources mobilisation (ARM) to generate Rs 5,000 crore for funding infrastructure in Bangalore.

However, there was no word on how the ARM would be achieved.Sources in the Finance Department said, “Cess could be imposed on fuels in Bangalore. In the VAT regime, there is no scope for cess. In Kerala there’s still one per cent cess on fuels. The government may either raise loans, or improve tax collection, to upgrade the City infrastructure.”

Some years ago, the government had imposed cess on petrol and diesel to mobilise funds for the Metro project. But it was withdrawn after the introduction of VAT.

The chief minister also urged the Centre to announce a special package for Bangalore, envisaging a “balanced mix” of financing from the Centre, the State government, the urban local bodies, financial institutions, the private sector and appropriate user charges.

“Unless the Centre gives a helping hand through a substantial increase in its allocation under JNNURM, it will be extremely difficult for the State to find the required resources for financing infrastructure in Bangalore,” he said.

Meagre funds

Yeddyurappa pointed out that as against the required funding of Rs 7,500 crore, the allocations made by the Centre for Bangalore and Mysore for a seven-year period (2005-2012) was only Rs 1,375 crore. According to a recent study conducted by the State, an investment of Rs 31,000 crore is required to improve Bangalore’s infrastructure for the period 2007-2012.

This investment is likely to be funded through grants from the Centre, under JNNURM to the tune of Rs 7,500 crore, from the State (Rs 4,500 crore), from the BBMP and the BWSSB (Rs 5,000 crore).

The balance of Rs 14,000 crore will be raised through debts and public private partnership ventures, he said. Yeddyurappa urged the Centre to take “more effective steps” to bring the price situation under control.

Rangarajan said Bangalore, which has a world class airport, should also have matching infrastructure facilities. When Mumbai can have good infrastructure, why not Bangalore, he asked.