As at October 22, Prime Minister Narendra Modi inaugurated and laid foundation of several development work worth Rs 1,140 crore of the cash-strapped VMC, which is banking on private investments and government grants to fund these projects.
But the BJP-ruled Vadodara Municipal Corporation (VMC) went into overdrive announcing and inaugurating a slew of projects ahead of the Gujarat Assembly elections, but the civic body has now been left with a meagre reserve of Rs 24 crore against its fixed monthly expenditure of Rs 70 crore. With no fixed deposit of its own to fall back, the civic body is got no other heavily dependent on government grants for most of its day-to-day expenditures.
In a reply to Congress corporator Chirag Zaveri, who had sought details of the balance funds in the VMC’s revenue capital budget (RCB) as well as its main fund, the VMC accounts department states: “As of October 16, the account balance of the Vadodara Municipal Corporation’s RCB and main fund is Rs 24.56 crore. The total income has been Rs 609.17 crore and the total expenditure has been Rs 607.65 crore (in the current financial year).”
The VMC’s fixed monthly expenditure towards wages, pensions and maintenance alone is Rs 70 crore, of which approximately Rs 40 crore goes towards payment of salaries, pensions and other related expenses.
“Currently, the Vadodara RCB and main fund expenditures do not have any fixed deposits. However, for the grants received by the VMC for various projects by the government, it has an FD of Rs 513 crore. In order to meet the expenses, money is withdrawn from the FDs from time to time.”
Officials of the VMC stated that the civic body has been cash-strapped for almost six years, making necessary expenditures though grants that it receives. An VMC official, requesting anonymity, said, “The implementation of the sixth pay commission as well as the scrapping of Octroi revenue by the state government caused a dent to VMC’s own liquid funds and resources. Although the state government gives an Octroi grant of Rs 26 crore per month, which is calculated on the basis of the Octroi revenue when it was scrapped.”
The VMC’s reply also states that it will bear an additional annual cost up to Rs 110 crore due to the implementation of the seventh pay commission, further squeezing the funds.
According to the VMC figures, in the current financial year, so far, it has received grants from the central and state governments amounting to Rs 292.15 crore and Rs 185.19 crore, respectively.
The monthly Octroi grant of Rs 26.80 crore for October is yet to be received, as well as the pending annual education grant of Rs 71 crore and Swarnim grant of Rs 72.54 crore. Since the dispatch of its reply to Zaveri, another grant of Rs 21 crore under the education head was released by the state government.
In the last two years, as the fate of as many as 12 of the 26 TP schemes submitted by the Corporation remain uncertain, the VMC’s town planning revenue is almost negligible.
Municipal Commissioner Vinod Rao said, “The VMC has not been able to capitalise on TP schemes to generate revenue as well as to create public infrastructure without much investment, as well as acquiring land".
Rao said that the VMC had adopted “intelligent” ways to create quality infrastructure owing to its low reserves.
Interestingly, the civic body has seen a surge in the number of big ticket development projects since the 2014 Lok Sabha polls. Also, its annual budget has also gone up from Rs 1,597 crore in 2012-13 to Rs 3,757 in 2017-18.
According to Congress’s Chirag Zaveri, the VMC’s financial condition is like a “patient being on ventilator”. Zaveri said, “Any local self government body is called successful, when it is self-reliant with its own source of funds through various tax collections and revenue sources. In case of the VMC, it is running only on grants allocated by the government. So, there has been a regular delay in salaries. The FDs from grants of Rs 513 crore cannot be used for regular expenditure of the VMC as per the rules.”
Earlier during 2014 parliamentary elections Modi contested successfully from Vadodara and varanasi and later resigned from vadodaro.