BALANCE SHEET OF MISCALCULATIONS BBMP BUDGET IS JUST MANIPULATIVE MATHEMATICS

By Firoz.T.Totanawala

The Bangalore Metro Reporter

15th September 2010 Issue

                          BALANCE SHEET OF MISCALCULATIONS

BBMP BUDGET IS JUST MANIPULATIVE MATHEMATICS

The first ever Budget of the Brihat Bangalore Mahanagar Palike is finally out and has indeed shocked everybody. The BJP Government which is controlling the BBMP has set out a whopping Rs. 8500 crores budget which has not only shocked the die hard BJP loyalists and the common man, but also puzzled mathematicians and economists. In addition, the budget is released in the mid financial year which means, the BBMP will have to raise and spend Rs. 8500 crores in just seven months.

In straight words the Rs. 8500 crores budget of BBMP is nothing but manipulative mathematics of the Politicians and Bureaucrats who can make two plus two as twenty two.

Let us understand the manipulative mathematics of the BBMP budget-

The BBMP has raised heavily from the Banks. It has raised over 2700 crores from 21 Banks and it is yet to clear the bills of contractors up to the tune of Rs. 2000 crores. Together, it becomes 4700 crores rupees. Now, even if the BBMP pays the minimum interest of 11% annually, it has to shell out around Rs. 500 crores per year as interest only. The loan repayment and clearing of pending bills still remain in place.

TAKING GOVERNMENT GRANT FOR GRANTED

Arguably, the Budget is mainly based on the availability of special grants from the Government. Here too, there is no word of commitment from the Government, but, the BBMP is banking on the same. The BBMP budget has put the State’s special grant at Rs. 1900 crores and in fact, it has already taken this figure as ‘revenue’. On the face of it, this figure is highly exaggerated. While last year the BBMP expected the special grant of Rs. 550 crores, the Government actually gave only Rs. 400 crores to it.. Hence, this year they can only expect an increase of about 100 or utmost 150 crores. There is no other way as there are set of rules and guidelines for giving special grants to local bodies. Thus, the budget already shows a highly inflated figure of almost Rs. 1200 crores in ‘revenue’.

AKRAMA/ SAKRAMA TACTICS

Further, an estimated Rs.750 crore ‘Receipts’ from Akrama/ Sakrama scheme is also hard to digest. Even though the Akrama/ Sakrama scheme is already approved by the legislature, the Governor has refused to give his assent and asked for detailed discussions in the legislature. This is because the Bill was passed by the Government in just few minutes while the opposition was staging Dharana. The Governor may therefore send it back to the Assembly for discussion and that means the Bill is still pending. Even if we assume that the Governor gives his assent, the scheme cannot be implemented immediately. The Government has to frame the rules for its implementation and the draft rules have also to be published for public information and also for inviting their suggestions/ objections to the same. This will obviously take months. Besides, the Akrama/ Sakrama scheme is already questioned in the High Court as well and as such there is no final conclusion over the scheme. In such a case, how can BBMP include the estimated Rs. 750 crores in its budget as ‘Receipts from Akrama/ Sakrama scheme’?

Now if we calculate honestly, the special grant of Rs. 1800 crores plus the Akrama/ Sakrama scheme receipt of Rs. 750 crores, totaling to Rs. 2550 crores is dubious. Assuming that the Government gives the special grant of Rs. 600 crore, even then, there is an inflated receipt of almost Rs. 2000 crores. And that reduces the BBMP budget to Rs. 6500 crores from 8500 crores.   

PENDING BILLS AND SALARIES

Again, out of this amount, the budget has earmarked 4878 crores rupees towards payment of bills for the completed and to be completed development works. About Rs. 600 crores are set apart for repayment of loans and interests. It also has to spend about Rs. 500 crores towards Salaries and administrative expenses. All these come to about Rs. 6000 crores and that leaves BBMP with a mere Rs. 500 crores for the actual works and proposals.

DON’T FORGET THE WARDS

In addition, the BBMP has also set up Rs. 2 crores for each old BMP ward and Rs. 3 crore for the newly added 100 wards for short term works and sanitation. This would also consume the remaining Rs. 500 crores.

ADDITIONAL PEANUTS

It is also true that the BBMP has successfully tapped some other resources to collect about Rs. 250 crores through taxes on high value buildings, Trade Licences etc. It is also hoping to get Rs. 200 crore from JNNURM, additional Rs. 400 crores from the State Finance Commission and Rs. 125 crore from the 13^th Finance commission. But, all in all, it would add up only to about Rs. 1000 crores, which is peanuts, considering the thousands of crores worth works as proposed by the BBMP.

HIGH END PROMISES

The BBMP has proposed many high cost projects like underpasses, signal free roads, elevated High ways, etc. which would in all cost not less than Rs. 5000 crores. Besides, it has also proposed projects/schemes like General Hospitals, Multi level Parking lots etc. which would at least cost another Rs. 3000 crores.

REALITY BITES

Now the most important question is where is the Money honey? Though the BBMP has already released a glamorous budget, but in reality it actually does not have money even to fulfill 25% of the budget proposals. Then, it again has to raise loans. Now make a note, we have learnt that the BBMP can raise 20% of its budget estimate as loan. Perhaps that is why it has prepared an inflated and manipulative budget for Rs. 8500 crores, so that it can raise about 2000 crores in loans.

All said and done, going by the facts and reality, the glamorous BBMP budget is nothing but a shining example of manipulative mathematics. That’s all.