BBMP aims to close pending bills with a realistic Budget

TDR bank, high value property tax recovery committee, four new flyovers - what else is in the financial plan for the city?

Bruhat Bengaluru Mahanagara Palike (BBBMP) on February 17th 2014 presented a Budget of Rs 7773.08 crore for 2014-15. However, there are not many new projects, while the emphasis is made on paying pending bills and continuing spill over works.

Debt-ridden cash-strapped BBMP had come under fire in last July for presenting an imaginative Budget of Rs 8498 crore. Out of the expected Rs 8445,26 crore, BBMP could collect only Rs 3208.95 crore. This reduced the estimated expenditure for 2013-14 to Rs 3236.15 crore, and the pending payments and announced works in the last Budget spilled over to the 2014-15 Budget.

The BBMP could collect only Rs 1247 crore as property tax so far, for 2013-14, and another Rs 20 crore as penalty for late payments. This time the BBMP has proposed to form a High Value Properties Tax Recovery Cell, with a view to revise and recover taxes from identified 2,000 properties in the BBMP limit. So this year, the BBMP has put a ‘realistic’ target.

Chairman of Tax and Finance Standing Committee Shivaprasad says: “This time we have kept the property tax target at Rs 2500 crore only. If we receive more than that, we would be happy” BBMP Tax and Finance Committee claims to have taken a suo motu decision to confiscate movable properties of tax defaulters, which will be implemented after the government nod.

According to Budget document, trade licences will be issued henceforth to fetch Rs 60 crore for BBMP. MoUs with telecom companies in accordance with the new Optical Fibre Policy have already been signed; BBMP expects Rs 750 crore from this. BBMP hopes to get Rs 400 crore from betterment charges (the charge levied on converted stray sites and bulk land.)

New plans: Many ambitious, some curious!

The Budget showcases many ambitious plans for reforms, some of which are curious. It proposes to set up ward committees to ensure greater role for citizens in governance. So haven’t they done it so far, despite the High Court telling them to act on this?

The truth is, there are Ward Committees formed in many wards, however the Council is yet to approve the system formally. Reason: Councillors demanded the translation of the Ward Committee rules, which has been done and submitted to them all, and is expected to come up in the next Council meeting.

The Budget proposes to have a ward information register which will have comprehensive information about the ward in all the wards. Property tax details, BBMP/ State/ CentraI government Institutions, hospitals, public buildings, educational Institutions, hotels, convention halls, Kalyana Mantaps, playgrounds, memorials, burial grounds, parks, lakes, commercial complexes etc will be included in this register. If this materialises, it will be a useful data for the residents.

Namma Bengaluru Nidhi to be raised with the help of citizens for welfare programs and inviting private institutions and corporates to partner in maintaining public assets like lakes and parks of the city signal the starting of a new era in the governance of the city. However, the nature of Memorandum of Understandings signed with the corporates can throw some more light on the subject.

Bengaluru Santhe that sells khadi and handicraft items that depict Bangalore’s culture, Bangalore History Museum proposed at Freedom Park at a cost of 3 crores and eight Kempegowda towers coming up in eight corners of Bangalore with Public-Private Partnership (PPP) are aimed at selling Brand Bangalore. MoUs have been signed and survey has been completed for Kempegowda towers. However, when the issue was discussed in the last council meeting, the project was supposed to happen with complete private involvement with no financial burden to BBMP. When the proposal came down the Budget presentation paper, it has become PPP. This has raised many eyebrows.

Similarly, upgrading of K R Market and construction of multi-level parking was supposed to be undertaken using BBMP or government money, so that the returns can be taken by the BBMP itself. This was extensively declared by the Mayor too. However, now the Budget document talks about PPP for the development of  K R Market.

Vague, unclear proposals

The Budget document says aerators will be installed in lakes at a cost of 5 crore, to maintain water quality. The proposal itself is very vague, with no mention of the lakes in which it is going to be installed, among BBMP’s 59 lakes.

BBMP claims to propose many administrative reforms: e-Governance in all depts, GIS-based road history to be implemented, corporators to be trained in e-Governance etc. However, the Budget document doesn’t make any mention of the already-existing but non-functional GIS-based road history records and property identification.

Another proposal is to issue Rs 6,000 to 20,000 autos, for fitting them with GPS, to make the city ‘safe.’ However, it is not clear out of 1.33 lakh autos registered in Bangalore, how will they chose the lucky 20,000. A casual talk with an auto driver revealed that fitting an auto with GPS doesn’t cost more than Rs 4,500, including all costs.

Yet another such proposal is to construct automated hitech e-toilets. The specifications and locations of such toilets aren’t mentioned in the Budget document or the extract.

The Budget proposes to set up a Transferable Development Rights (TDR) bank, but again, there are no details or roadmap for this purpose.

GIS mapping for hoardings

Advertisement hoardings will be issued with GIS mapping, according to the Budget document. Sources in Advertising Department say that radio chips will be issued for hoardings and they will be mapped. This is because the Advertising Department faces a peculiar problem. The licence fee for hoardings varies according to the zone. Some brainy ‘hoarders’ have found a way to milk this chance. They take permission and pay the fee in E zone, but place the hoardings in B zone, which has a higher fee. Without a proper data base, it is difficult to keep track of this, because of which the BBMP is losing out the revenue.

Budget document says that evacuation of illegal hoardings will be outsourced. This has already been discussed in the meeting and the Council has given its nod for this. However, it is not clear why the BBMP cannot do it on its own, as depending upon a third party cannot ensure 100% removal of illegal hoardings. Also the metal pillars and the boards used in the hoardings have monetary value.

Emphasis on clearing pending bills

The actual secret of the Budget lies in this: The Budget announces all fancy schemes, but there are very few new projects announced. Among the new projects announced are the elevated flyover from Sirsi Circle to BHEL Circle in association with Nandi Infrastructure Corridor Enterprise (NICE) and an elevated road from Race Course Road to the railway underbridge via Shivananda Circle.

An elevated road from Outer Ring Road (Ejipura Cross) to Kendriya Sadan in Koramangala and an elevated steel bridge from Minerva Circle to Hudson Circle under the Jawaharlal Nehru National Urban Renewal Mission (JnNURM) are also in the offing.

Maximum of the Budget will be spent on pending bills (bills not paid for the works done in previous years) and spill over works (the works announced in previous Budgets but did not get money). The ward works are the only hope where people can demand some developmental works.

Selected old wards have been allotted Rs 3 crore per ward. These wards are 195, 128, 179, 180, 138, 27, 190, 133, 4, 32, 69, 8, 172 and 103. Some new wards have been allotted Rs 4 crore. these wards are ward 35, 10, 198, 70, 157, 134, 47, 46, 90, 114, 137. No logic has been given for the allotment, as most of these new wards were carved out of existing wards and do not fall in peripheral underdeveloped areas.

The Budget document has copy-pasted the part of the State Budget that announced money for infrastructural development in BBMP limits. The State government’s special development grant of Rs 250 crore for 110 villages that came into BBMP limit will be used to repay the pending bills of Rs 39 crore, spill over works of Rs 150 crore and new works worth Rs 10 crore.

The breakup of the Budget

BBMP claims to spend a huge 67 % on maintenance, health and education, and an 8% of the total budget on salaries and pensions. Administrative expenses are 3%, debt servicing is 7% and transfer of payments/ current assets and liabilities – 5%. JNNURM : 3% SC/ST welfare : 7% The Budget document fails to provide an insight into how much has been allotted to which sector/ which department, though the detailed Budget estimate book has the details.

BBMP proposes to set up a coordination committee consisting of BDA, BWSSB, BMTC, BESCOM and BBMP in order to bring in harmony in the projects. Sadly this is the job of the Metropolitan Planning Committee that is supposed to be formed soon, but hasn’t yet seen the light of the day.

The BBMP Council will be discussing the Budget tomorrow. The approved Budget will be sent to the State government for the final approval. Shivaprasad says that the approved Budget extract will be put up on the BBMP website once it gets approval from the State government.

To read the Budget speech, click here.

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