dna analysis: Civic budget focuses on basic amenities

Municipal commissioner Guruprasad Mohapatra’s Rs4,901-crore draft budget for 2014-15 fiscal on Friday focused more on basic amenities rather than big projects. Perhaps, limited financial resources of the Ahmedabad Municipal Corporation (AMC) could be the reason for doing so. 

Mohapatra has allocated nearly 50% of the estimated capital expenditure of Rs2,679 crore for basic amenities like water, drainage, roads and housing. According to provisions of the Bombay Provincial Municipal Corporation Act (BPMC ACT), AMC’s basic responsibilities include providing water, drainage and roads. So, Mohapatra seems to have done quite a good job. Since providing affordable housing is not the basic responsibility of the corporation, Rs160 crore, allocated for housing, should have been spent on creating or improving infrastructure. 

Going by AMC’s track record, execution of the Rs2,679-crore capital works does not seem practical. In 2012-13, AMC could execute works worth Rs1,574 crore against the revised estimate of Rs1,815.51 crore. Similarly, it revised its capital expenditure estimate to Rs2,075 crore from its original estimate of Rs2,470 crore for 2013-14. Sources believe that the capital expenditure for the ongoing fiscal would be around Rs1,800 crore. So, the realistic estimate of capital expenditure would be around Rs2,000 crore next fiscal. 

Some people may find it as basic and routine work as the commissioner has not proposed any major infrastructure or recreation projects. He has just carried forward bridge projects, riverfront amenities, BRTS phase-III, 24X7 water supply among others. The commissioner, however, has allocated a proportionate budget for each department considering its needs and capacity to execute. 

Again, Mohapatra has earmarked Rs280 crore for service and programme expenditure. AMC needs to cut down on its expenses on programmes as actual expenditure increases every year. “This is probably the only account head where actual expenditure goes up,” said sources in the AMC. 

On the revenue front, the biggest cause of concern is lack of enough government grant in lieu of octroi. AMC’s income from octroi is estimated to have reached Rs2,500 crore by now. 

On the other hand, the civic body is getting around Rs1,500 crore from the government as grant in lieu of octroi, grant under Mukhyamantri Swarnim Jayanti and other schemes. 

That’s why, AMC has to narrow the gap of Rs1,000 crore by using internal resources. The commissioner had increased the basic rate of property tax in 2013-14 and proposed to implement the new jantri rate in 2014-15. So, he had increased the property tax demand by nearly Rs200 crore.  

Mohapatra has used both tools to boost AMC’s revenue. So, the civic body is set to face a bigger challenge there. In future, AMC will have to explore new avenues to generate revenue and focus more on increasing non-tax revenue. 

Therefore, one could say that the commissioner has tried to balance basic needs and projects. And, the proposals can be executed with effort and will power.