City Pulse

BBMP has estimated an outlay of INR 10,899cr for the year 2020-21. The dependence on state grants (table 1) is 4,339cr, which is 40% of the total receipts.  Property tax collections (table 2) are yet to improve and as per revised budget estimates stands at 2,100cr with a target of 3,500cr set for the current year. The marginal improvements in property tax collections is not a healthy sign, significant focus on achieving complete property tax potential is critical for BBMP to raise its ability to generate own revenues. The announcement of the BBMP Budget and Accounting Rules 2020 is welcome, and we hope it will bring in the required fiscal discipline and financial management systems necessary to enable it to deliver.  

Table 1:  Contribution of grants

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.  

Table 2:  Property tax collections

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

To read the detailed BBMP Budget estimates for the year 2020-21,click here.