CAG notes dip in tax revenue of Greater Chennai Corporation

‘The civic body was able to generate only about 53% of its revenue in four years’

he Greater Chennai Corporation headquarters. File | Photo Credit: R. Ragu

The Greater Chennai Corporation was able to generate only 53% of its own revenue between 2015-2016 and 2019-2020, according to the report of the Comptroller and Auditor-General of India for the year ended March 2020. The report was placed beforethe State Assembly on Thursday.

Stressing the need for fiscal autonomy and the release of grant from the State and the Centre without any delay, the report said the expenditure incurred by all urban local bodies, including the GCC, towards programmes in accordance with the scheme works has showed a decreasing trend and has come down from 23.66% in 2016-2017 to just 15.25% in 2019-2020.

The borrowing of the Greater Chennai Corporation stoodat 10% of its revenue during the period. Of the total own source of income of ₹26,659 crore for urban local bodies in the State in the period, the Corporation has reported a tax revenue of ₹5,540 crore, non-tax revenue of ₹1,918 crore, assigned revenue of ₹571 crore and miscellaneous income of ₹2,582 crore.

The other corporations in the State had a tax revenue of just ₹3,595 crore out of ₹7,335 crore total own source revenue. Municipalities reported a tax revenue of ₹2,358 crore out of ₹5,378 crore and town panchayats reported a tax revenue of ₹1,002 crore out of ₹3,335 crore total own source of income.

The report said urban local bodies in the State were able to generate only 41% of their own revenue and were more dependent on the fiscal transfers from the government grants, which formed a significant portion of the revenue, averaging 40%, during 2015-16 to 2019-20. The town panchayats were mainly dependent on fiscal transfers to the extent of 65% as they generated only 27% of their own revenue.

Of the revenue of ₹65,508 crore for all urban local bodies in the State during the period, ₹4,076 crore has been obtained through loan.

Audit scrutiny revealed that the performance grants of ₹322 crore for the year 2016-17 was released on due date in February 2017. But for subsequent years, the performance grant of ₹1,323 crore wasnot released by the Centre despite fulfilment of all the eligibility criteria by the urban local bodies. It is pertinent to note that the State government had taken up the non-release of performance grants with the Union government in April 2018 and in August 2019, but no amount was released till September 2021.

Non-release of performance grants to the urban local bodies tantamount to deprivation of much-needed financial resources to the urban local bodies, the report said.