In what is termed as a major financial reform, the state government on Thursday brought the BBMP under the Karnataka Local Fund Authorities Fiscal Responsibility Act, holding the civic body back from fiscal indiscipline.
In the absence of the reform, the Bruhat Bengaluru Mahanagara Palike’s (BBMP) outstanding bill currently stands at around Rs 3,500 crore. Other than this, the civic body has issued work orders amounting to Rs 4,200 crore and is in the midst of preparing tenders for projects worth another Rs 5,000 crore. The special law, officials said, will help in clearing these bills in the next four years.
Separately, the government has also notified the BBMP (Fiscal Responsibility and Budget Management) Rules, 2021, inviting objections or suggestions from citizens within 30 days.
The draft notification ushers in sweeping financial reforms such as introduction of medium-term fiscal plans, and fiscal transparency by holding at least two meetings every year in each ward, among others.
The civic body has been directed to consider the current year’s revised revenue receipt while preparing the budget for the forthcoming year. “The deficit in the final approved budget cannot exceed 3% of the total receipts of the previous year,” the draft notification states. The BBMP is also expected to take measures to eliminate revenue deficit and build up adequate revenue surplus.
Some of the major sources of revenue to the BBMP include: property tax, trade licence fees, road-cutting charges, and advertisement fee, among others. All this revenue cumulatively fetch a total of around Rs 5,000 crore to the civic body.
It can also be noted that the Standing Committee for Taxation and Finance has been directed to present to the council a mid-year statement of actual performance against the annual budget in the same format as the annual budget. Such a mid-year statement should be published on the website, the draft rules state.
The draft notification also requires the civic body to set aside 10% of the annual available amount for development works recommended by citizens.
The BBMP has also been given the responsibility of providing job codes, including tender documents, contractor selection, work order issuance, measurement books, quality certification, and payment on the BBMP website.
Sapna Karim, head (civic participation) at NGO Janaagraha, termed it a major reform. “It will be the beginning of the cleaning process. There will be realistic budgets and greater transparency in finances as the BBMP needs to publish extensive data at the ward and budget levels,” she said.
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