VMC in grip of financial crisis

VIJAYAWADA, DEC. 6. Can the Vijayawada Municipal Corporation (VMC) keep the wolf from the door? For, the financial condition of the corporation is in dire straits. The contributing factors are many.

A whopping Rs. 17 crores from defaulters of various taxes is posing a severe threat to the corporation. Besides, the State Government has, apparently, decided to adjust Rs. 5.18 crores of non-plan grant pertaining to the first quarter of 2004-2005 fiscal of the VMC to Andhra Pradesh Urban Finance and Infrastructure Corporation (APUFIC). This amount is said to be part payment of the Rs. 10 crores advanced by APUFIC for works during the recent Krishna Pushkarams. If the Government sticks to its stand, it may give the third whammy in the form of blocking almost an equal amount towards the adjustment. If this were to come true, the corporation will fall short of a solid Rs. 27 crores in its budget.

Grandiose budget

The grandiose budget, which was jacked up from Rs. 135.19 crores (revised estimate of 2003-2004) to Rs. 216 crores (budget estimates of 2004-2005), may have to be pruned drastically when the budget estimates are revised.

The VMC expected Rs. 28 crores from the State Government towards Pushkaram grants. This amount was added in the budget estimates by seeking the "tentative oral approval" of the State Government then. However, with the change of Government, the VMC was asked before taking up Pushkaram works only to take up those works which were mandatory for a smooth conduct of the religious event. The Government told the VMC not to resort to "proliferation of development works" in the arb of Pushkarams. Accordingly, Rs 10 crores was released through APUFIC "belying the expectation of a Rs 28-crore grant" from the Government.

The budget estimates for 2004-2005 also increased the estimated revenue receipts under several heads. However, whether the receipts would really be in tune with the expectations is only a conjecture of time, for the preparation of revised estimates is already under way.

Top defaulters

The corporation authorities have prepared a list of "top 100 defaulters" of all types of taxes. The South Central Railway has topped the list with Rs 1.66 crores. Government agencies -- be it Central or State -- have also prominently figured in the first 100. The Central Warehousing Corporation owes Rs 18.30 lakhs, while the VGTM-UDA, Rs 15.10 lakhs. The State Electricity Board (no clarity if it is AP Transco or AP Genco) is due to pay Rs 11.48 lakhs. The Police Department has to pay Rs 23 lakhs, the Telecom department owes to the tune of Rs 9 lakhs, Department of Posts and Telegraphs is due to pay over Rs. 10 lakhs. Even the Sub-Collector's office is supposed to pay Rs. 3.82 lakhs.

And, there are many educational institutions and construction companies in list of top 100, which owe a fat sum to the VMC. Apart from the top 100 defaulters, whose accrued arrears touched a little more than Rs 8.22 crores, the VMC should get another nearly Rs. 10 crores from others. Sand seigniorage to the tune of Rs 1.5 crores is to be paid to the VMC by the Krishna Zilla Parsihad.

Against this background, it has become interesting to watch as to how much belt the VMC can tighten before its general body goes to the polls.

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