GST in, Maharashtra can rid civic bodies of corruption | mumbai news | Hindustan Times
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GST in, Maharashtra can rid civic bodies of corruption

MUMBAI CITY NEWS: Why can’t each rupee spent by the civic body be audited and the audit reports put on the website so that citizens know how their money is spent? After all, the functioning of the civic bodies directly affects the citizens.

mumbai Updated: May 26, 2017 12:07 IST
Shailesh Gaikwad
Octroi duty, a major source of revenue of the civic bodies, will be scrapped with the introduction of the GST. The civic bodies will be relying on the government for compensation towards the same.
Octroi duty, a major source of revenue of the civic bodies, will be scrapped with the introduction of the GST. The civic bodies will be relying on the government for compensation towards the same. (HT file photo)

With the state legislature passing the required legislations in its three-day long special session that ended on Monday, Maharashtra is all set to enter the Goods and Services Tax (GST) regime. The days leading to the session saw haggling between the ruling Bharatiya Janata Party and its alliance partner Shiv Sena as the latter was worried over the financial situation of the civic bodies, such as Brihanmumbai Municipal Corporation (BMC), that would be losing their major revenue source with the octroi duty being scrapped with the introduction of the GST.

With political parties demanding that the civic bodies be compensated adequately, the government passed the Maharashtra Goods and Services Tax (Compensation to the Local Authorities) Act 2017 to safeguard financial interests of 27 municipal corporations in the state. The legislation provides for 8% hike in the compensation to the civic bodies every year even though the average increase of their revenue is little over 4%. The state government has assured that it would increase the percentage of the compensation every five to seven years on the basis of performance of these bodies in terms of tax collection.

In theory, this is a good step since it would ensure financial stability of the civic bodies that need funds to cater to the demands of the growing cities.

However, it would make more sense if the government takes this opportunity to clear the mess in the functioning of the civic bodies in the form of corruption and mismanagement and ensures that the taxpayers’ money spent by them is accounted for and properly audited.

Across the cities in Maharashtra, it is not difficult to see how elected representatives are running municipal bodies. There is little check on how money is spent. There is provision for audit but it is either not done regularly or not taken seriously. There are some exceptions but those ruling major civic bodies that have budgets ranging from Rs5,000 crore to Rs30,000 crore do not think it is necessary to audit their expenditure.

Unfortunately, everybody is well aware of what is happening in our local government bodies but none of the parties are willing to take any strong measures to put an end to the same.

During his tenure as chief minister, late Vilasrao Deshmukh had once publicly admitted that the standing committee (the panel that has financial powers to spend civic body’s money) in civic bodies was actually `understanding committee’, pointing out all-party corruption in local government bodies. In several municipal corporations, one often sees amicable atmosphere among ruling and opposition parties as contracts of hundreds of crores of rupees are cleared.

Maybe chief minister Devendra Fadnavis can take an effective step in this direction since the GST regime has given the state government a chance.

Octroi duty, a major source of revenue of the civic bodies, will be scrapped with the introduction of the GST. The civic bodies will be relying on the government for compensation towards the same. The government can link the release of funds to financial discipline and efficient management of our civic bodies. There should be analysis of how the funds are spent and whether the projects built with that money are really worth it.

Why can’t each rupee spent by the civic body be audited and the audit reports put on the website so that citizens know how their money is spent? After all, the functioning of the civic bodies directly affects the citizens. That is why, every time we see potholes on roads, we suspect a road scam. Will the GST regime change this?