assessments of municipal finances

7/27/2019 Assessments of Municipal Finances

1/24

Assessments of Municipal

Finances for the city of Mehasana

Finance Group

Water supply and Sanitation

Lab.


2/24

Revenue

IncomeCapital Income

RevenueExpenditure

CapitalExpenditure

MunicipalFinance

Total

Income

Total

Expenditure


3/24


4/24

0.0

200.0

400.0

600.0

800.0

1000.0

1200.0

1400.0

1600.0

1800.0

Rs.

Mehsana and other cities (2010)

per capita revenue receipts Per capita revenue expenditure

Source: www.pas.org.in


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Operating Ratio (2010)

(Revenue Expenditure) %

Revenue Receipts

0.00

0.50

1.00

1.50

2.00

2.50

Source: www.pas.org.in

Compared to other cities, Mehsana has the lowest O.R, due to a very low

revenue expenditure.

The amount spend per person is very low in Mehsana.


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Efficiency RatiosOperating Revenue Surplus

Total Revenue Surplus

Debt Serving Capital Ratio

*Own sources include Tax income from own sources and Assigned sources


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Operating Revenue Surplus

(Total Revenue Income-Total Revenue Expenditure)

%

Total Revenue Income

In crores2000/

2001

2001/

2002

2002/

2003

2003/

2004

2004/

2005

2005/

2006

2006/

20072010/

2011

2011/

2012

Revenue Income 9.42 7.05 8.90 10.41 12.55 12.00 14.12 27.35 20.82

Revenue Expenditure 6.78 5.61 5.38 6.48 9.20 6.31 9.80 14.16 10.82

Operating Revenue

Surpus(%)28.04 20.51 39.54 37.74 26.67 47.39 30.56 48.21 48.02

Favourable Good Moderate Poor

>50% >35% >15%


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Total Revenue Surplus

(Total Income-Total Expenditure) %

Total Income

In crores2000/

2001

2001/

2002

2002/

2003

2003/

2004

2004/

2005

2005/

2006

2006/

20072010/

2011

2011/

2012

Total Income 10.0 7.1 9.0 10.8 13.7 12.4 14.7 31.1 25.1

Total Expenditure 9.9 8.2 7.9 9.5 13.8 11.2 17.5 23.2 19.2

Revenue

Surplus(%)1.7 -15.9 12.1 11.6 -1.2 9.3 -19.4 25.4 23.5


>40% >25% >10%


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Debt Serving Capital Ratio

Debt Serving* %

Revenue Income

In crores 2000/2001

2001/2002

2002/2003

2003/2004

2004/2005

2005/2006

2006/2007

2010/2011

2011/2012

Debt Serving 0.2 0.3 0.1 0.2 0.0 0.2 0.6 0.7 0.0

Revenue Income 9.4 7.1 8.9 10.4 12.6 12.0 14.1 27.3 20.8

Debt ServingCredit ratio %

2.5 4.0 1.0 1.6 0.3 1.5 4.1 2.7 0.0

Includes Principle repayment and Interest Paid On LoansDSCR Should not be Greater than 30%


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COMPOSITION OF EXPENDITURE AND

INCOME

56%

4%

35%

5%

INCOME SPLIT

RIOST RIOSNT RI CI

29%

33%2%

36%

EXPENDITURE SPLIT

REE REOM REDS CE

INCOME:

Revenue IncomeOwn Source Tax

Own Source-Non tax

From grants and Contributions

Capital Income

EXPENDITURE:

Revenue ExpenditureEstablishment Expenditure

Operations and Maintanance

Debt Serving

Capital Expenditure


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Income RatiosShare of Own sources* in Total Revenue

Income

Share of Tax Income in Total Revenue Income

*Own sources include Tax income from own sources and Assigned sources


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Share of Own sources in Total

Revenue Income

Total Income from Own Sources %


In crores2000/

2001

2001/

2002

2002/

2003

2003/

2004

2004/

2005

2005/

2006

2006/

20072010/

2011

2011/

2012

Own Source Income 8.1 5.8 4.8 6.5 7.6 6.5 8.1 17.3 13.6

Revenue Income 9.4 7.1 8.9 10.4 12.6 12.0 14.1 27.3 20.8

Share of own source

income to total

income

86.1 82.9 54.0 62.4 60.6 54.5 57.7 63.2 65.3


>80% XX XX


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Share of TAX income in Total

Revenue Income

Total Income from TAX %


In crores2000/

2001

2001/

2002

2002/

2003

2003/

2004

2004/

2005

2005/

2006

2006/

20072010/

2011

2011/

2012

Tax Income 7.8 5.6 4.6 6.3 7.4 6.2 8.0 15.1 11.7

Revenue Income 9.4 7.1 8.9 10.4 12.6 12.0 14.1 27.3 20.8

Share of TAX income

to total income83.2 79.4 52.1 60.3 59.0 51.8 56.4 55.2 56.4


XX XX XX XX


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Key Findings

0

10

20

30

40

50

60

70

80

90

100

Percentage

Year

Share of Income From Tax Sources

Data

Missing


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Key Findings

Octroi was a important source of taxfor the municipality having a significant

share till 2001.

After the abolishment of Octroi, theshare of tax income came down

significantly.

Property tax is the single mostimportant municipal tax contributing to

40% of tax income.


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Expenditure RatiosCapital Expenditure Ratio

Establishment Expenditure %

Operation and Maintenance Expenditure %


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Capital Expenditure Ratio

Total Capital Expenditure %

Total Expenditure

In crores2000/

2001

2001/

2002

2002/

2003

2003/

2004

2004/

2005

2005/

2006

2006/

20072010/

2011

2011/

2012

Capital

Expenditure 3.1 2.6 2.5 3.1 4.6 4.9 7.7 8.1 7.7

Total Expenditure 9.9 8.2 7.9 9.5 13.8 11.2 17.5 23.2 19.2Capital

expenditure ratio 31.3 31.4 31.8 32.1 33.5 43.7 44.1 35.1 40.0


>40% >20% >10%


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Total Revenue Expenditure

In crores2000/

2001

2001/

2002

2002/

2003

2003/

2004

2004/

2005

2005/

2006

2006/

20072010/

2011

2011/

2012

Establishment

Expenditure3.0 2.1 3.3 3.6 3.8 4.7 4.8 3.8 2.9

Total Revenue

Expenditure 6.78 5.61 5.38 6.48 9.20 6.31 9.80 14.16 10.82

Establishment

expenditure %44.8 36.7 60.9 56.3 41.3 74.7 48.9 26.9 26.7


XX XX XX XX


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ESTABLISHMENT

EXPENDITURE COMPOSITION

5%4%

30%

4%

3%3%

42%

9%

General Administration

Other Taxes

Refund

General Conservancy

T.P.Scheme

Misc

DepositOthers


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Operation and Maintenance

Expenditure %

O & M Expenditure %

Total Revenue Expenditure

In crores2000/

2001

2001/

2002

2002/

2003

2003/

2004

2004/

2005

2005/

2006

2006/

20072010/

2011

2011/

2012

O&M

Expenditure3.5 3.3 2.0 2.7 5.4 1.4 4.4 9.6 7.9

Total Revenue

Expenditure 6.78 5.61 5.38 6.48 9.20 6.31 9.80 14.16 10.82

O&M

expenditure %51.6 58.3 37.4 41.1 58.3 22.5 45.2 67.8 73.3


XX XX XX XX


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O&M breakup The major share of the O&M expenditure goes as follows:

0

1020

30

40

50

60

70

80Public Health

0

10

20

30

40

50

60

70

80

General Conservancy O&M

0102030

4050607080

2006/07 2010/2011 2011/2012

Water Works O&M


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Vision for Mehasana

To become financially sovereignthrough innovative ways of municipal

financing

Some options such as

Municipal bond market.


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Municipal Corporations(Amount in Crores of Rupees)

Municipal

Corporation

Issue

Date

Maturity

(Years)

Coupon

(%)

Rating Agency Amount Guarantee

Bangalore 1997 7 13 A-(SO) CRISIL 100 Yes

Ahmedabad 1998 7 14 AA-(SO) CRISIL 100 No

Nashik 1999 7 14.75 AA-(SO) CRISIL 100 No

Ludhaina 1999 10 13.5-14 LAA(SO) ICRA 10 No

Nagpur 2001 7 13.43 LAA-(SO) ICRA 50 No

Madurai 2001 15 12.25 LA+(SO) ICRA 30 NoIndore 2001 7 11.50 - - 10 Yes

Hyderabad 2002 8.5 7 AA+(SO) CRISIL 82.5 No

TNUDF 2001 5 11.85 LAA+(SO) ICRA 106 No

TNUDF

(Pooled)

2002 15 9.2 30 No

Municipal BondsMunicipal bonds are type of revenue bonds, with

fixed interest rate, with or without government

guarantee, maturity 7-15 years, taxable or tax free


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References

Financial and operation Plan for Nadiad city. National municipal accounting Training manual for Elected

representatives and Top management, Ministry for Urban

development-2008.

Analysis of Municipal finances, a cross sectional study.,

Ramakrishna Nallathiga, Centre of Good governance,Hyderabad.

Financing municipal services, Reaching out capital markets,

Om prakash mathur, Sanjukta ray

THANK YOU

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