The Hindu : FBAS helps BMP manage finances better

Online edition of India's National Newspaper
Sunday, Jan 12, 2003

Southern States

Southern States - Karnataka-Bangalore

FBAS helps BMP manage finances better

By Alladi Jayasri

BANGALORE Jan. 11. It has taken a mechanism called the Fund-based Accounting System (FBAS) to bring the Bangalore Mahanagara Palike (BMP) out of the mess that the Government and official organisations are perceived to be — ill-managed finances, very little work to show for the money spent, laborious paperwork, and red-tapism; for the public, it means running from pillar to post to get various documents or information.

Things have been changing in the BMP since it adopted the FBAS. Urban local bodies all over the country are eager to know about it. The Municipal Corporation of Delhi wants to know if what the BMP, with its 14,000-strong workforce, had achieved could be replicated there, covering over 2.5 lakh employees. The Indian Institute of Management (IIM), Ahmedabad, is engaged in a study project on the subject.

The FBAS, launched in April 2001, links all information and makes it meaningful, apart from enabling its retrieval on the computer. The BMP Joint Commissioner (Finance), P.K. Sri Hari, told The Hindu that the FBAS or a system similar to it was critical for running Government organisations. It helped streamline application of resources, allowed planning for the future, and facilitated prioritisation of activities that needed funds.

Now, the BMP can scrutinise its balance sheet, track funds, estimate receivables, and schedule payments. Earlier, it took 10 days to get a report on the monthly accounts. "Now it is instant, and up-to-date, with only a 24-hour default,'' Mr. Sri Hari said.

Thanks to the FBAS, corporatisation has come to the BMP as far as accounting is concerned. "We can now review the performance of each department on a daily basis. And the accuracy of data is nearly 100 per cent. We are soon going to touch that magic figure,'' he said.

At the click of a mouse, Mr. Sri Hari and his colleagues can collect daily details of collection of property tax in each ward. Or they can work out how much it costs to educate a child in one of the schools run by the BMP.

More importantly, Mr. Sri Hari is pleased that the FBAS has opened the doors to easy and generous lines of credit. Finance organisations and investors have committed more than Rs. 450 crore for infrastructure projects that the BMP intends to undertake. The BMP has also reduced payment cycles, and private parties taking up development works are pleased that they are being paid, more promptly.

Another sign of corporatisation is the treasury management module used to manage over 600 fund collection accounts in the City. Now it takes just a few minutes to know the inflow and outgo of money in various accounts, where citizens pay their property tax or any dues to the BMP. Grouping all the receivables into an account earns more interest, and in 2000-2001, BMP earned as much as Rs. 1.5 crore this way. This takes care of the non-developmental expenses of the BMP such as salaries.

For the public, although all this information is not accessible online, there is a monthly report, the Arthika Darpana, which gives ward-wise account of income and expenditure, and progress of works at any given time.

The report is given to the corporation councillors for sharing with the citizens in their wards.

The FBAS was envisaged as a project of the Bangalore Agenda Task Force after the BMP was identified as the nodal stakeholder in the BATF. It was facilitated by Nandan Nilekani, CEO of Infosys and Head of BATF, through Aadhar, a trust run by him.

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