B'lore infrastructure needs Rs 20,000 crore

Finance Commission askes GBCC to raise more revenue.

Bangalore will need over Rs 20,000 crore to address its infrastructure problems, the Third State Finance Commission was told by the officials of the Greater Bangalore City Corporation (GBCC) on Tuesday.

The Commission's report, which is expected to be completed by June 30, will determine how the state's tax revenues are to be assigned to and appropriated by the panchayat raj institutions and urban local bodies.

Speaking to reporters after the interaction with GBCC officials, Commission member T Thimme Gowda said: "Bangalore is facing serious problems in terms of discharging its core functions like laying good roads, ensuring efficient water supply and putting in place a proper solid waste management systems. There is a complete mismatch between the funds it gets and the funds it requires."

The Commission has asked the GBCC to strengthen its own revenue mobilisation capacity.

"We have suggested the GBCC to tighten its property tax collection mechanism. Unlike Mumbai and Delhi which collected property tax of Rs 4,162 crore and Rs 880 crore respectively last fiscal, Bangalore has managed to collect only Rs 369 crore. A lot of properties in Bangalore remain outside the tax-net as they are illegal. It is high time, the GBCC regularises these properties and collects more taxes," Gowda said

Earlier, the GBCC officials gave a representation to the Commission seeking more funds.

The officials submitted a report prepared by credit rating agency, Crisil, which pegged fund requirement for overall development of Bangalore's infrastructure at Rs 20,000 crore by 2012.

Another estimate prepared as part of the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) has estimated fund requirement for Bangalore at Rs 22,536 crore for the same period.

"Bangalore is expanding phenomenally. While its area has increased from 226 sq km to 800 sq km following the declaration of GBCC, the population has increased from 4.3 million to 5.8 million. The existing infrastructure is finding it to difficult to take the pressure," Gowda said while pointing out to the GBCC's revenue, which was just Rs 1,775 crore during 2007-08.

To expedite several of the on-going projects, the GBCC immediately requires Rs 500 crore to Rs 600 crore. This apart, GBCC plans to take up mega infrastructure projects like the 11 km road stretch between Sirsi Circle and Kengeri, the 5-km road between Yeshwanthpur CMTI junction and Tumkur Road and a 10-km stretch between Shoolay Circle and Central Silk Board junction on Hosur Road.

"For these projects, the GBCC has estimated a requirement of Rs 2,000 crore," Gowda said.

The GBCC also told the Commission that it has lost around Rs 100 crore so far following the introduction of surcharge on stamp duty in lieu of the additional stamp duty.

On the GBCC's request to the Commission to earmark more funds for development of Bangalore as it is the major revenue generation hub for the state, Commission chairman A G Kudagi assured to submit a positive report.