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Updated: December 19, 2013 00:27 IST

‘BBMP’s poor finances is the result of city’s growth’

Laiqh A Khan
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Fund crunch due to demand for infrastructure works: Commissioner

The growing demand for infrastructure works is the main reason for the financial crunch faced by the Bruhat Bangalore Mahanagar Palike (BBMP), according the civic body’s commissioner M. Lakshminarayana. The city has not only witnessed a spurt in its human and vehicular population but also an increase in the geographic spread from about 300 sq km to over 840 sq km over the last few years.

The commissioner said, “BBMP is not bankrupt. We are facing financial difficulties due the huge demand for infrastructure works. We have unpaid bills amounting to Rs. 1,800 crore that are due to contractors, besides ongoing works amounting to Rs. 3,000 crore. In addition, we also have to keep paying Rs. 400 crore to Rs. 500 crore every year towards interest on loans.”

He was responding to Chief Minister Siddaramaiah’s statement in the recent legislature session in Belgaum that development works taken up by the BBMP are progressing at a slow pace due to lack of funds.

Annual budget

The annual budget of the civic body is around Rs 7,500 to Rs. 8,000 crore. It earns Rs 2,500 crore every year from property tax, licences and other sources, and receives about Rs. 2,000 crore from the State government. Works amounting to about Rs. 2,000 crore is implemented under Central-sponsored schemes.

Mr. Lakshminarayan said that BBMP has urged the State government to make good the shortfall.

It may be mentioned here that the outlay in the BBMP’s budget for 2013-14 amounted to Rs. 8,520 crore with a target of collecting Rs. 3,200 crore in tax from the 16 lakh properties in the city.

Former mayor and Congress leader M. Ramachandrappa, however, blamed the poor finances on mismanagement of funds between November 2006 and March 2010 when there were no elected representatives.

Short-term loans

“Without an elected body in place, the bureaucrats at the helm of affairs not only sanctioned works indiscriminately, but the civic body even took short-term loans from banks at commercial rates of interest,” Mr Ramachandrappa alleged and cited the Rs. 2,000 crore work code scam that rocked the civic body. The debt, which the BBMP inherited when the BJP assumed power after the 2010 elections, led the civic body to pledge assets, like Public Utility Building (PUB) and Jayanagar Shopping Complex, with banks to “restructure its loans”.

More In: Bengaluru

If Indian municipalities are to improve, they should combine works and
assign works to top notch contractors only. Small contractors ruin works
with delay and poor quality work.

from:  Vyas K Susarla
Posted on: Dec 19, 2013 at 15:48 IST
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