Spending up 6%, but MCG’s revenue target falls 40%

Gurgaon: The MCG House on Thursday approved the corporation’s budget for the 2022-23 fiscal year. It approved an expenditure of Rs 2,700 crore but an income of just Rs 3,000 crore. There is a hike of 6.4% in the expenditure as compared to the budget of Rs 2,538.3 crore for the current fiscal year and a 38.8% decline in income from Rs 4,899.3 crore.
As a result, MCG will spend less on physical infrastructure like roads and bridges. The biggest hits to income will come from property tax and stamp duty collections due to the slowdown in economic activity because of the pandemic.
The budget was approved in the presence of 21 out of 35 councillors. A major hike of around 90%, as reported by TOI on February 16, has been approved for health and sanitation operations — from Rs 299.2 crore this fiscal to Rs 565.6 crore in 2022-23. This includes expenses on waste management, construction of waste processing units and clearing 30 lakh tonnes of legacy waste from the Bandhwari landfill, among others.
The allocation for environmental works, which includes conservation of forests and ecology, has been slashed from Rs 117 crore to Rs 60 crore, a dip of 48.7%. A new section, meanwhile, has been created for environmental projects, including dealing with cases under the National Green Tribunal and solid waste management, for which Rs 200 crore has been allocated separately.
Compared to Rs 184.9 crore allocated in 2021-22, the civic body has sharply reduced its expenditure on roads and bridges by 67.6% to just Rs 60 crore now. The budget allocation for sports and health, which includes expenses on upkeep of parks, gyms and the Wazirabad stadium, has also been cut down from Rs 101.5 crore to Rs 60 crore.
At Rs 145.9 crore, the budget allocation for sewerage and drainage remains the same as the current year. Budget allocation for repair and maintenance works such as public buildings, roads, footpaths, water supply, traffic signals and biodiversity park, however, has been slashed by 48.4% to Rs 164.3 crore — this fiscal, it stands at Rs 318.2 crore.
MCG estimates an income of Rs 1,100 crore from property tax in 2022-23, which is 11.1% less than this year’s estimated income of Rs 1,235 crore. The income from stamp duty is estimated to be Rs 600 crore, 70% less than this fiscal’s Rs 2,000 crore. The civic body has generated nearly Rs 664 crore from stamp duty in the current fiscal, according to MCG officials. The corporation also hopes to generate an income of Rs 100 crore from HSVP funds, Rs 200 crore from municipal bonds and Rs 100 crore from the sale of MCG land.
MCG had set an expenditure of Rs 1,884 crore for 2018-19, an increase of 32.2% compared to the previous year’s estimate of Rs 1,425.6 crore. This was followed by Rs 2,150.8 crore in 2019-20 (14.2% hike) and Rs 2,276 crore in 2020-21 (5.8%). This fiscal’s expenditure saw a hike of 11.5%.
In terms of revenue, the upcoming fiscal will see a dip compared to the previous year for the first time in five years — MCG’s estimated revenue was Rs 2,990 crore for 2018-19, an increase of 42.8% compared to the previous year’s Rs 1,602.9 crore. This was followed by Rs 2,605.1 crore in 2019-20 (13.8% hike), Rs 4,604 crore in 2020-21 (76.7%). This year, income was up by 6.4%.
Some councillors, however, criticised the budget projections. “This fiscal, MCG has generated a total income of Rs 1,064 crore till January 31. A major portion of this income comes from backlogs of property tax, stamp duty and excise duty collected this year. Projecting an income of Rs 2,985 crore for the upcoming fiscal is not justified when the corporation has earned only Rs 1,064 crore this time,” said Rama Rani Rathee, councillor of ward number 34.
“Every year, MCG’s budget projections are inflated. While this fiscal’s expenditure was estimated to be Rs 2,538 crore, only Rs 819 crore was spent till January 31,” she added.
Commissioner Mukesh Kumar Ahuja, meanwhile, said in the meeting that MCG will emphasise on increasing metered water connections to increase its revenue in the upcoming fiscal.
Meanwhile, mayor Madhu Azad said, “We have set a realistic budget and there are no inflated figures. The income for the 2021-22 was Rs 4,899 crore. This year’s income has been estimated at Rs 3,000 crore. The expenditure and revenue in the upcoming fiscal are realistic as directed by the Haryana CM in a meeting held recently with commissioners and mayors. I have also directed officials to periodically hold a budget review meeting.”
While a majority of other councillors present in the meeting said the budget proposal was satisfactory, Rathee also raised objections to MCG’s bearing the expenditure of waste collection in Faridabad. “Why is MCG paying Ecogreen (the waste concessionaire) for Faridabad’s waste? This year, MCG will again give Rs 35 crore to Ecogreen for waste management in Faridabad,” said Rathee.
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