Arani Town - Municipal

Chapter - 9 Final Report: Arani Municipality
In the case of Arani Municipality, it is observed that the Municipality has
shown for the years 2004-05 to 2006-07. The same is because interest and
depreciation has not been charged. Prior to 2004-05, the Municipality has
incurred deficit in all the years.
Prior to depreciation, the Municipality has shown surplus in all the years. Thus
the Municipality has cash surplus for all the years. But the depreciation and
outgo on account of finance charges is very high. So the Municipality needs
to undertake lot of fiscal reforms and full leverage of its assets over the next
few years to improve its financial strength and thereby undertake new
projects.
The summary of finances of the Municipality under the broad heads of
income and expenditure for the last 6 years is as below :
Table 9-22 : Head-wise Income & Expenditure for last 6 years (Rs. in lacs)
Audited Unaudited
S.No Particulars 2001-02 2002-03 2003-04 2004-05 2005-06 2006-07
1 Income
Property Tax 84.01 79.51 92.00 95.20 98.87 101.90
Profession Tax 9.51 10.24 10.77 11.89 12.51 12.83
Water & Drainage 30.70 29.34 35.05 34.11 33.49 35.40
Assigned Revenue 31.51 44.36 61.82 43.55 44.36 0.00
Devolution Fund 29.76 18.22 55.49 63.90 148.14 145.00
Serv. Chgs & Fees 9.85 14.16 18.89 17.68 16.78 21.28
Grants & Cont. 0.15 2.50 0.08 0.01 7.35 0.00
Sale & Hire Chgs 0.00 0.00 0.00 0.64 0.00 0.00
Other Income 69.62 64.19 69.53 86.09 67.38 63.61
Total Income 265.11 262.52 343.63 353.07 428.88 380.02
2 Expenditure
Personnel Cost 127.30 159.42 151.82 167.74 161.97 157.34
Terminal Benefits 33.77 28.82 56.21 19.51 6.01 1.21
O&MñStreet Lights 11.84 9.23 9.14 14.44 8.10 22.46
O&M ñ Water 14.64 23.34 22.50 2.46 2.60 34.87
Repairs & Maint. 3.77 7.61 12.70 6.18 9.35 12.33
Programme Exps 0.44 0.00 0.00 0.16 0.00 0.00
Administrative Exp 8.86 9.96 29.48 14.96 10.53 10.67
Finance Expenses 76.12 28.14 66.56 0.23 0.21 1.98
Depreciation 71.76 11.99 81.52 0.00 0.00 7.55
Total Expenditure 348.50 278.51 429.93 225.68 198.77 248.41
3 Surplus / (Deficit) -83.39 (15.99) -86.30 127.39 230.11 131.61
It may be observed that the Municipality has shown deficit in all the years up
to 2003-04. The surplus from 2004-05 is due to depreciation & finance charges
not charged.
The assigned revenue of the municipality has increased by around 4.5% p.a.
over the last 6 years and accounts for 13.5% of total income. Devolution Fund,
which accounts for 15% of the total revenue has increased by 50% over the
last 6 years.
The municipalityís own revenue comprises property tax, profession tax, water
charges and income from properties have all shown growth of around 5%
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