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BBMP Budget 2020-21: Janaagraha Analysis
April 20, 2020• By Sapna Karim
BBMP has estimated an outlay of INR 10,899 crores for the year 2020-21 with INR 5607 crores (51%) allocated towards revenue expenditure such as salaries, administrative cost and operational and maintenance cost and INR 5288 crores (49%) towards capital expenditure.
Quality of historical budgets
(All amounts in Rs Cr unless otherwise stated; all growth rates on compounded basis unless otherwise stated)
Table 1: Historical Budget Variance
| in crores | Variance % | |||
Particulars | BE | RE | Actuals | BE vs RBE | BE vs Actuals |
2013-14 | 8,445 | 3,209 | 3,093 | 62% | 63% |
2014-15 | 5,978 | 2,894 | 4,205 | 52% | 30% |
2015-16 | 5,394 | 4,542 | 5,246 | 16% | 3% |
2016-17 | 9,331 | 6,819 | 6,572 | 27% | 30% |
2017-18 | 9,996 | 7,514 | 7,321 | 25% | 27% |
2018-19 | 10,129 | 7,380 | 7,296 | 27% | 28% |
2019-20 | 11,649 | 7068 | NA | 39% | NA |
2020-21 | 10899 | NA | NA | NA | NA |
Source: Total receipts from BBMP Budget books across years
- Since 2016-17, the budget variance between budget estimates (BE) and revised budget estimates (RE) averaged at 29.6% and budget variance between budget estimates and actuals averaged at 28% while cities like Mumbai (9%), Chennai (15%), Ahmedabad (8%), Surat (5%) boast of an average budget variance under 15%[1].
Table 2: Breakdown of revenue streams
Own Revenues | BE |
2020-21 | |
Own revenues | 5,854 |
Grants | 4,339 |
Recoveries & Refund | 706 |
Total Receipts | 10,899 |
Own revenue to Total receipts % | 54% |
- There is a risk that the total budget size of the BBMP may stagnate at current levels without either a significant push to further raise own revenues OR guaranteed, predictable state grants. State grants are still a significant expected income stream.
Revenue from Property taxes
Table 3: Property tax collections
Property tax | 2015-16 | 2016-17 | 2017-18 | 2018-19 | 2019-20 |
Actuals/RBE | 1,403 | 1,725 | 1,589 | 1,819 | 2,100 |
Budgets | 1,900 | 2,300 | 2,600 | 3,100 | 3,500 |
Budget vs Actuals | 73.8 | 75.0 | 61.1 | 58.7 | 60.0 |
Source: BBMP Budget books across years
- A significant point of concern is the declining collection efficiency of property tax from 75% in 2016-17 to 60% in 2019-20 (RE). The collections for 2018-19 is only slightly higher than for 2016-17 despite consistent increase in estimates of property tax collections.
- Therefore, BBMP must re-evaluate its property tax estimate scientifically and adopt measures to improve property tax collections, and reduce dependency on Grants
Table 4: Contribution of grants
Particulars | Actuals | Actuals | Actuals | Actuals | Actuals | Actuals | RE | BE |
2013-14 | 2014-15 | 2015-16 | 2016-17 | 2017-18 | 2018-19 | 2019-20 | 2020-21 | |
Grants | 902 | 1,561 | 2,235 | 3,505 | 4,030 | 3,613 | 3,113 | 4,339 |
Total Receipts | 3,093 | 4,205 | 5,246 | 6,572 | 7,321 | 7,296 | 7,064 | 10,899 |
Grants as % of Total receipts | 29% | 37% | 43% | 53% | 55% | 50% | 44% | 40% |
Source: BBMP Budget books across years
- BBMP’s dependency on grants has significantly increased since 2013-14. BBMP in 2020-21 has proposed to reduce its dependency on grants to 40%, primarily by mobilizing own revenues.
Salary costs incurred
Table 5: Salary cost
Particulars | Actuals | Actuals | Actuals | Actuals | Actuals | Actuals | RE | BE |
2013-14 | 2014-15 | 2015-16 | 2016-17 | 2017-18 | 2018-19 | 2019-20 | 2020-21 | |
Salaries | 483 | 530 | 544 | 402 | 562 | 759 | 788 | 895 |
Payments | 3,343 | 3,778 | 5,198 | 5,310 | 7,396 | 7,709 | 7,066 | 10895 |
% salaries to payments | 14% | 14% | 10% | 8% | 8% | 10% | 11% | 8% |
- An interesting trend noted is that salaries as % of total payments have fallen from 14% in 2013-14 to 10% in 2018-19. In comparison, Hyderabad and Chennai are at 16% and 27% respectively.
- Staffing information published by BBMP reveals that there is significant staff shortage in BBMP. However, it has been proposed in budget that 938 vacant posts in various cadres in BBMP shall be recruited through Karnataka Public Service Commission.
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