It was a mere hours before the 2021-22 financial year ended that the Bruhat Bengaluru Mahanagara Palike (BBMP) presented the Budget for 2022-21 with an outlay of ₹10,480.28 crore. In its analysis of the Budget, released on Wednesday, non-profit trust Janaagraha highlighted the civic body’s continued dependence on State grants.
It pointed out that this may not be a sustainable model as it is discretionary funding. “It is critical that BBMP has predictability of funding, which means assured funds coming in at expected timelines like the grants from Central and State finance commissions, in addition to its own revenues. Predictability of funds strengthen BBMP’s ability to execute projects, maintain and improve infrastructure and meet citizens’ aspirations,” the organisation stated in a press release.
However, data has also shown that the BBMP’s dependence has been decreasing over the years – from 53% in 2016-17 to 38% in 2022-23.
The Budget variance for the last fiscal is at 5%, which indicates good budget practices and tighter implementation, said Janaagraha. This is also in line with the Karnataka Local Fund Authorities Fiscal Responsibility Act, 2003, and indicative of better budgetary practices and estimation. However, the State government has exempted the BBMP from the act for the current fiscal.
Suggesting that the civic body should increase its own revenues, Janaagraha pointed out that in 2022-23, BBMP has proposed to raise ₹3,680.15 crore, which is 56% of the revenue target of ₹6,558 crore, through taxes and cesses.
Property tax estimates for 2022-23 are ₹3,152 crore, which is 31% higher than the revised estimates of 2021-22. This shows that BBMP is gaining capacity in property tax collection. Advertisement tax is only giving BBMP ₹2.1 crores, which is low especially when compared to municipalities such as SDMC (Delhi) which is getting ₹130 crore (BE 2022-23) as income from advertisements.
It also noted that BBMP has proposed significant increases in other sources of revenue such as health cess, duct services/ OFC charges and building regulation compounding fees. This would reduce dependency on property taxes, the civic body’s largest source of revenue.
