BBMP’s ad revenues unlikely to meet exaggerated targets

Civic authority hopes to mop up higher taxes with new rates

Advertisements on over bridge near 30th November 2010. Photo: G.P.Sampath Kumar

With mounting loans and pending bills, the cash-strapped Bruhat Bangalore Mahanagara Palike (BBMP) has been taking measures to increase revenue, with little success.

With an objective to increase revenue from advertisement tax and bring down the illegal hoarding menace in the city, the BBMP council has cleared the new advertisement bylaws. The current ad licences expire this month-end and the BBMP is hoping to mop up higher taxes as per the new rates.

A mere fraction

Over the past two years, the BBMP has not been meeting the ad tax target it has set for itself. In 2010-11, it was Rs. 120 crore, while the civic authority managed to collect just a little over Rs. 20 crore. In 2011-12, it was a mere Rs. 32.2 crore of the Rs. 150-crore target.

Senior officials in the BBMP’s advertisement department said, by implementing the new bylaws, they hope to increase revenue from this source by at least Rs. 20 crore. The tax for hoardings in prime areas such as M.G. Road, Brigade Road and St. Mark’s Road has been increased by 100 per cent.

“Realistic target of revenue from ads will be around Rs. 40 crore to Rs. 50 crore. However, the budget will have inflated projections, like it did in the previous years,” said an official, candidly.

The bylaws were forwarded to the Urban Development Department for government approval on March 17, but the file hasn’t moved, sources said. Even so, the BBMP will implement the new bylaws in anticipation of the approval.

Measures

The officials conceded that the tax from this source had not met the realistic targets, let alone those specified in the budgets. For instance, the tax from ad spaces in the 629 bus stops in the city was around Rs. 13.21 crore. This was including the licence renewal fee of Rs. 10.94 crore and ad tax of Rs. 2.47 crore. However, the BBMP was able to collect only Rs. 6.99 crore.

Measures have now been taken to increase revenue from all sources by strengthening tax collections. It now remains to be seen if the BBMP will be able to meet even its realistic target this year.