Arani Town - Municipal

Chapter - 9 Final Report: Arani Municipality
over the last 6 years. Thus the growth in Grants income is much higher than
own revenue over the years.
The total accumulated surplus of the Municipality as on 31st March 2007
stands at Rs. 2348 lacs. As against the same, the total fixed assets comprising
land, buildings, plant & machinery, vehicles etc. stands at Rs. 2850 lacs. Out of
the total fixed assets, the value of land is only Rs. 2008 lacs.
The total loans of the Municipality as on 31st March 2007 stands as below :
Table 9-23: Borrowings of the Municipality (Rs. in lacs)
S.No Loan from Purpose Rate of Interest
. - 63 -
O/s as on
31.3.07
1 Government Loan Water Supply & Others 12.50% 131.04
2 TUFIDCO Loan Shopping Complex 8.50% 35.07
3 TNUDP Loan Roads 8.50% 60.00
Total 226.11
As against the same, the contribution by Municipality, contribution by
Government and Grants from Government as on 31st March 2007 stands as
below :
Table 9-24: Status of Contributions & Grants
S.No Particulars Rs. in lacs
1 Contribution by Municipality 21.38
2 Contribution by Government 282.86
3 Contribution by Private Parties 1.49
4 Grants from Government 216.57
Total 522.30
It is observed from the above that around 70% of the fixed assets excluding
Land have been funded by means of Contribution and Grants from
Government over the years and the balance 30% from Loans.
The average current collection efficiency of the municipality is low as
compared as to other municipalities in the district and is around 65%
efficiency for property tax, 70% efficiency in profession tax, 40% in water
charges and 70% efficiency in case of non tax revenue. The arrears collection
performance needs to be improved.
The broad financial analysis of the Arani Municipality finances reveal that the
Municipality has to necessarily increase its own sources of income and
collection efficiency for servicing the additional borrowings in the future.
To summarise, the overall income pattern of the Arani Municipality indicates
both positive and negative features. The positive trends are on the income
side, where the Municipality has higher growth rate in income than growth in
expenditure.
But the growth in income is higher mainly on account of growth in Grants
income comprising Devolution Fund and Assigned Revenue. The growth in
Own Income is only 5% p.a.
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