AMC cuts development works as income falls

Gujarat Global News Network, Ahmedabad

Ahmedabad Municipal Corporation today passed its budget for 2015-16 of Rs. 5665 crore which is substantially higher than the previous year’s Rs 5301 crore. But the irony is that in the previous year it had to cut expenditure by almost 20 percent because it could not raise the money.

Obviously, this has raised an important question. How will the civic body manage more money when it fell short of the target of 2014-15. The fall in the target is not small. The AMC fell short by 20 percent. Consequently it could have works of Rs 4262 crore only. What is more in the reduction of Rs 1039 crore, large chunk of Rs 727 crore was on development expenditure.


Details 2014-15 Budget Estimate (BE)

Rs. crore2014-15 Revised Estimate (RE)

Rs. croreReduction of outlay in RE from  BE

Rs. in CroreRevenue Expenditure24732161312Development Exp28282101727Total530142621039


The approved budget by general assembly of AMC for 2014-15 was Rs. 5301 crore but the standing committee, while presenting the AMC’s budget for next fiscal (2015-16) has  revised  budget estimate of 2014-15  to Rs. 4262.22 crore by reducing the budget 20%  ( Rs. 1039 crore) due to short fall in tax collection and grants.

It includes General tax and other taxes (Rs. 102.33 crore), water and conservancy tax (Rs.60 crore), professional tax (Rs.20 crore), beside fall in Non-Tax Revenue  collection (Rs. 218.82 crore), reduction in revenue grants and subsidies from state  government (Rs. 194.49 crore) and other receipt worth Rs. 66.48 crore.  The total fall in revenue collection is to be Rs. 619.97 crore.

The revised estimates of capital receipt also suggest fall of Rs. 419 crore, reduction in capital receipt under JnNURM is of Rs. 204 crore; there is also reduction of budget outlay of Rs.45 crore under RAY (Rajiv Awas Yojna) and under EWS-LIG scheme as well, the budget has been reduced by Rs. 145 crore.

Thus the total reduction of revenue and capital receipt is to be tune of Rs. 1039 crore in the year 2014-15; the 20% reduction of AMC’s budget will have detrimental impact on the pace of Ahmedabad development process and quality of services to its citizen.

With reduction in financial receipt, AMC has also reduced the budget outlay for various capital development works like,  the budget outlay has been reduced by Rs. 47.93 crore for slum upgrdation , reduction of budget of Rs. 40.69 crore  for AMC’s city Light Department,  reduction of budget for Parks and garden, solid waste management,  the biggest reduction of Rs.  213 crore has been done for zonal development works. The development works under JnNURM have also suffered budget cut of Rs. 212 crore.

The revised estimates of AMC’s 2014-15 budget also suggest reduction of revenue expenditure for storm water drainage, sewerage cleaning equipment, New Pirana sewerage treatment plant, controlling the mosquito menace, maintenance grant for play grounds, fountains, vyayamshalas, M.J. Library, Veer Savarkar Sports Complex, to some extent ICDS services etc.

The biggest reduction is for primary education under Prathmik Kelavani. The budget estimate for AMC’s primary education was Rs. 619 crore but the revised estimate suggests reduction of Rs. 269 crore, which is quite puzzling on how such huge reduction will not have  impact on the education of children’s under AMC’s schools, where number of children are dwindling every year.

The reduction in overall budget has adverse impact on the delivery of services for not only every Amdavadi in general but children, women and the slum dwellers in particular, as reduction is very sharp in primary education, slum up-gradation, sewerage plants and specific services meant for children. The Amdavad city needs to create and develop more open spaces for children, who constitute around 35% population of the city.

This AMC budget analysis has been done by Pathey. 

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