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Loksatta analyses BBMP budget, seeks overhaul of process
10 September 2010

After the initial reactions from all corners and sections of society on the BBMP budget announcements and debates in the council, Loksatta Party is the first to bring out a comprehensive analysis on what the budget would translate into for citizens of Bengaluru in the year ahead. Senior party leader, Mr. N S Ramakanth felt, "Such an analysis is necessary to give a true picture to citizens. If people are informed about this, it will ensure that mistakes that were made in this budget will not be repeated next year".

Citizen grievances with the budget process start from the very beginning with problems with the accessibility of the budget documents such as the budget speech and Action Taken Reports itself. As party member Ajit Phadnis recalled his experience, "Budget documents were not put up on the BBMP website. When asked why, I was told they will be put up only after the budget is passed by the Corporation. But what use is it then, since citizens cannot raise their concerns after the budget is passed? State and even National budgets are available online as soon as they are presented! What is worse even the printed copies are not easily available. It was not even available in my local corporation office and when I inquired for a copy at the BBMP office they first ask me to tell them why I need the budget!"

Even after one acquires the document with difficulty, it is extremely user-unfriendly to decipher. Mr Phadnis further continued, "BBMP has projected about Rs.200 crores JNNURM funds for next year, but if I want to find out how much was granted last year, I have to aggregate data from over 20 pages distributed department wise, and even after doing that am not being sure if I have arrived at the correct figure! This appears totally incoherent with 'transparency in administration' that the budget speech boasts off".

Another area of critical concern in the process of budget management is the participation of citizens in framing key fiscal policies and in the preparation of the annual budgets. The corporation's own Medium Term Fiscal Plan, which it released last year, mentioned about the provision in the Karnataka Local Fund Authorities Fiscal Responsibilities Act, 2003 that required local bodies to hold at least two meetings with citizens associations in the preparation of the budget. Mr. Ramakanth said he did not know about this earlier, and felt that even after being so active in civil society issues he had not heard of even one such meeting in the run-up to the BBMP budget, "I don't know what the BBMP speech meant when it talks about 'bottom-up' planning".

The biggest problem with the budget figures has to do with the estimates. Estimates of receipts always seem to go terribly off the mark. This was also acknowledged in the MTFP last year as "There has been a gap of 20% to 40% in the projected and actual revenue receipts in Bruhat Bengaluru Mahanagara Palike (BBMP) in the last ten years." And this year the estimates are even higher at 1500 crores, which are definitely not going to be even close to achievement. If this is the accuracy with which BBMP estimates its own tax receipts, something that it is completely in control of, it is a wonder how bad its estimates for state grants, which are not in its control, could be!

Another anomaly is the huge estimate of Rs.750 crores through building deviation regularisation (SAKRAMA). Mr. Muralidhar Rao chuckled that, "This is clearly a case of counting chickens before they hatch. There is tremendous citizen as well as legal opposition to it and the Governor has not yet signed it. The budget should only be based on legally sanctioned schemes, not just ideas that are still in the pipeline." He pointed out that last year even the estimated Rs.50 crores could not be collected.

Projected advertisement taxes of about Rs.100 crores is a good sign and reflects a strong intent on taking action against illegal holdings. Loksatta advocates that there is potential for increasing advertisement tax collections to more than Rs.500 crores if, along with commercial hoardings, BBMP also takes action against illegal political hoardings such as welcome banners for national leaders and birthday wishes to politicians.

One has to look at the gross overestimation of revenues with the perspective that if revenue projections are not met, which will evidently be the case, there will correspondingly be a major cut in expenditures on essential programmes particularly social and infrastructure expenditure which constitute 70% of the payments break-up. In general, Loksatta advocates a better balance of allocations in the budget. The budget projects for 62% on infrastructure and barely 5% on social challenges which needs to be significantly enhanced.

The budget has, however, created some islands of hope in the form of higher spends on health care, a dedicated budget for pedestrian infrastructure, and an effort to improve the various markets in the city. There is also continuing investment in restoring lakes and initiatives for solid waste segregation. As Mr. Shankara Prasad commented, "We are happy that after tireless advocacy by many Loksatta members, the corporation is finally taking cognisance of the need to segregate solid waste, although it is disappointing that they are still not talking about segregation at the source". Besides, systemic improvements such as electronic building plan approvals, continuation of the Action Taken Reports on budget announcements and setting up of a Project Management Unit are appreciable.

In conclusion, the overwhelming concern is that some of these good initiatives may taste the dust if there is a revenue shortfall. Karnataka is wavering in it promise to fulfill the reforms mandated by JNNURM, and hence JNNURM funds have been hard to come. Ironically one of JNNURM reforms is the enactment of a 'Community Participation law'. Mr. Prasad demands, "We want the government to bring out a report on where Karnataka stands with regard to the JNNURM reforms as well as a the constitution of elected Ward Committees as mandated by the Constitution. Every Ward should be allocated an annual amount of Rs. 1,000 per citizen to address local issues with local leadership."

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