As expected, the Budget — presented during an administrator’s tenure with no council — focused on fiscal discipline, which the civic body termed as “moola mantra” or guiding principle.
The Budget announced that the job number system will be revamped for all civic work. It also stated that over a period of time, it aims to ensure that liability, such as pending bills as well as bills for ongoing projects, at any point will not exceed 2.5 times the fiscal space available for taking up such work.
The cap essentially limits the quantum of work that can be taken up by the civic body, and probably solve the pending bills problem in the long run. “This will make BBMP’s financial management comparable to ULB’s like Brihanmumbai Municipal Corporation,” stated the Budget.
Currently, the overall liability of BBMP – pending bills of ₹3000 crore and works at various stages of implementation of about ₹7000 crore – is several times the fiscal space available, which the Budget termed as “intimidating”.
Another problem that plagues civic Budgets is overestimation of revenues, based on which more projects are sanctioned in the Budget leading to a huge problem of pending bills as the unrealistic revenue targets are not realised. This Budget conservatively revised property tax collection targets reducing the amount, probably for the first time.
It also aims to follow a system of budgetary management that introduces controls where capital outlays would be released for expenditure only up to 60% of the Budget amount in the first six months of the financial year. “Based on the revenue buoyancy and target achievements of the Budget the remaining 40% of expenditure would be incurred,” it stated.
The BBMP Accounting and Budgetary Management Rules have been submitted to the government and are likely to be notified very soon. The Budget also announced the formation of an internal audit wing, whose staff will be trained by the CAG office.
It claimed that the BBMP will be debt free this year, and the last of the mortgages properties – K.R. Market – released. This has given the civic body as A+ rating from credit rating agency ICRA Ltd.
“With proper fiscal discipline and accounting system, BBMP can raise money from the market by issuing municipal bonds in future,” the Budget said.
