'AMC is buried under debt, interest'

Ahmedabad Municipal Corporation (AMC) on Tuesday approved a budget of Rs4,951 crore for financial year 2013-14. Compared to the previous budget of Rs4511 crore, the amount has gone up by about 10%. While the BJP termed the budget realistic, the opposition Congress raised the issue of increasing debt and interest burden during the discussions on the budget.

The Congress referred to the shortfall in grant from the state government, in lieu of octroi, causing a debt burden on AMC. The civic body’s current debt is Rs227 crore, which may go up to Rs477 crore as it plans to raise Rs250 crore through tax-free bonds in 2013-14.

For the last five years, the state government had been giving only Rs826 crore as grant in lieu of octroi, though it was supposed to increase the grant by 10-15% every year. “The state government owes Rs1,935 crore to AMC towards grant in lieu of octroi in five years.
Had the state government allocated the grant in timely manner, the civic body would not have to face liquidity crunch and many more projects would have come up in city,” said Badruddin Shaikh, leader of opposition in AMC.

The Congress pointed out that the delay in completion of Sabarmati riverfront project has raised the cost from Rs473 crore to Rs1,152 crore, adding that the civic body had to pay Rs100 crore annually as interest to Hudco towards the loan taken for the project.

The Congress also urged the municipal commissioner to introduce 100% tax waiver scheme on property tax dues. AMC’s property tax dues have reached around Rs1,773 crore. Shaikh said that during Congress rule in the past, such a scheme was launched and it received good response from citizens; so it should be repeated.

The opposition also raised other issues, such as traffic, health and sanitation problems. Vinod Modi, Congress corporator from Dariapur, said that the traffic had gone from bad to worse in Kalupur and AMC must come up with a solution. Haji Asararbeg Mirza, Congress corporator from Sarkhej ward, raised the issue of stray dogs and poor sanitation in Vatva, Behrampura and Sarkhej.

“The state government owes Rs1,935 crore to AMC towards grant in lieu of octroi in five years. Had the state government allocated the grant in timely manner, the civic body would not have to face liquidity crunch and many more projects would have come up in city”
—Badruddin Shaikh, leader of opposition in AMC