Bangalore: The gross inability of the BBMP authorities to collect the property tax across the city and unscientific management of finances over the years is pushing the civic body - BBMP towards bankruptcy.
Failure to comply with the Comptroller and Auditor General (CAG) report which tries to induce financial discipline has forced the BBMP to raise huge loans by pledging its prime assets.
The BBMP is already in neck-deep financial trouble as it owes a whopping Rs. 9,200 crore to various financial institutions and contractors who have executed infrastructure projects by investing their money. The BBMP is finding it extremely difficult to repay the loans and restructuring the loans by pledging more properties as guarantee to seek loan.
The BBMP has availed a financial assistance of Rs. 3,900 crore from various financial institutions. It is no short of shame on part of the BBMP which has mortgaged as many as 394 properties, falling under the core Bangalore, to financial institutions to raise loans to overcome financial crisis.
That apart, Rs. 70 crore goes towards paying interest and principal and Rs. 55 crore towards administrative expenditure every month.
The performance of the BBMP over the years has been disarray as the civic body presents inflated budget. This forces the BBMP to seek loans year after year. Nevertheless, the BBMP's measures to enhance taxable and non-taxable revenue have been distressing.
It is an open secret that the BBMP with innumerable commercial structures has potential to collect property tax of Rs. 5,000 crore annually. But the collection does not even meet 50 per cent. The total revenue of the BBMP from both taxable and non-taxable income is just around Rs. 5,000 crore.
But the estimated expenditure is over Rs. 9,000 crore in the form of budget. This is giving a tough time to streamline the BBMP's financial position. The state and union government's grant is abysmally low for the urban local body.
The state government released SFC grants in installments which hardly help meet the administration expense and paying salary to its employees. Ignored CAG: The Comptroller and Auditor General report on the BBMP's projects has pointed out the reckless wasting of money to persuade them against such waste. It has also directed the BBMP to recover siphoned off money from the erring officials. As per the CAG report between 2005 and 2013 the BBMP has failed to recover a whopping Rs. 750 crore.
Recovering of CAG objected money and property tax will make the BBMP financially self sufficient and need not mortgage any of the properties.
