KMC presents surplus budget of Rs26bn for next financial year

The Karachi Metropolitan Corporation (KMC) on Tuesday presented a characteristically surplus budget for the fiscal year 2019-20 with an outlay of Rs26.449825 billion in the council hall of the old KMC building on MA Jinnah Road on Thursday.

Interestingly, the corporation has been facing an immense financial crunch since the past three years and almost all of its major revenue-generating departments have been devolved to the district municipal corporations. The KMC’s revenue generation, according to an official, is less than Rs1 billion a year.

The budget was presented by Karachi Mayor Wasim Akhtar. Deputy Mayor Syed Arshad Hasan and Metropolitan Commissioner Dr Syed Saifur Rehman were also present on the occasion. The meeting will continue on Friday (today) in the council hall before the budget’s approval.

Total receipts in the budget for 2019-20 are Rs26.449825 billion — Rs20.374087 billion are current receipts, which the KMC is supposed to get from the Sindh government, Rs1.734426 billion are capital receipts, which it gets as bank borrowing, grants and under other heads, and funds for the provincial Annual Development Programme (ADP) and the district ADP will be Rs4.341312 billion.

The total expenditure for the next fiscal year will be Rs26.438888 billion — Rs14.462326 billion have been allocated for the establishment, which goes in pension and salary, Rs2.280905 billion for contingent expenses, which are for petrol, diesel and other commuting expenses, Rs222.04 million for repair and maintenance, Rs5.132305 billion for development works and projects, which the KMC will carry out with its own resources, and expenditures from the provincial and district ADPs, which is Rs4.341312 billion, will be via the Sindh government’s funds.

Ironic revenue situation

The total revenue estimate, according to the budget documents, is around Rs26.449825 billion. The revenue from land and other departments is estimated at Rs1.591326 billion and from municipal utility charges & tax at Rs1.15256 billion. Dues against K-Electric are Rs4.40904 billion, which the KMC expects to receive in the upcoming financial year.

Dues against the Karachi Port Trust (KPT) are Rs600 million. From land, enforcement, estate, Katchi Abadis, Orangi project and charged parking, the corporation would receive an estimated Rs1.519326 billion. Transfer of income from the Sindh Building Control Authority is estimated at Rs100 million.

Answering a query by The News regarding the surplus budget, the mayor explained that they have estimated receiving complete funds from the Sindh government. According to him, the fact that the provincial administration does not release the funds is not reflected in the budget. The KMC, he said, also expects to receive its hefty dues from the KE and the KPT.

There has been mention of several revenue-generation departments in the budget, which the corporation does not own now. In last week’s city council session, the mayor had announced removing revenue amounts of all such departments from the budget document this year. Presenting the budget on Thursday, however, neither did he mention the omission of any such revenue nor was it mentioned in the budget documents.

Department-wise expenditure

The KMC allocated Rs3.334 billion for 700 development projects in the next fiscal year, out of which Rs1.6977 billion was allocated for 494 infrastructure (roads) projects while Rs42.65 million for 10 municipal services projects.

For seven transport & communication works Rs35 million was allocated, for 62 health projects Rs270.1 million, for 103 culture & tourism projects Rs403.5 million, for eight information technology projects Rs45.05 million and for new schemes Rs833.5 million.

Budget curtailed

The mayor said that the KMC budget was reduced due to the curtailment of Rs1.67 billion in the ADP by the government despite an increase of Rs2 billion in the National Finance Commission Award. The government curtailed the development budget despite generating revenue between Rs300 billion and Rs400 billion in Karachi.

He said it was hard to prepare the budget due to the financial crisis and limited resources, adding that it was difficult to pay even the staff’s salaries. He also said that in the current financial year 134 projects were completed while as many were not because the Sindh government failed to release the fourth quarter of the ADP.

In the current year the provincial administration has allocated Rs5 billion for the ADP but released only Rs2.5 billion. He said that under this grant the KMC included 401 schemes in the budget, but only 64 of these could be finished.

The mayor said that despite a sharp decline in the ADP funds from Rs5 billion to Rs3.33 billion, the KMC has included the most urgent works in the city to provide immediate relief to the citizens. He also gave details of various development works that have been carried out during the current fiscal year.