Gudiyattam Gudiyattam Town - Municipal

Chapter ñ 9 Final Report: Gudiyattam Municipality
Table 9-24: Status of Contributions & Grants
S.No Particulars Rs. in lacs
1 Contribution by Municipality 271.30
2 Contribution by Government 383.97
3 Contribution by Private Parties 9.53
4 Grants from Government 61.08
Total 725.88
It is observed from the above that around 50% of the fixed assets excluding Land
have been funded by means of Contribution and Grants from Government over
the years and the balance 50% from Loans.
The average current collection efficiency of the municipality is poor, between 60
ñ 70% for all the cases of Own Revenue. The arrears collection performance is
also poor.
The broad financial analysis of the Gudiyatham Municipality finances reveal that
the Municipality has further scope for increasing its own sources of income and
collection efficiency for servicing the additional borrowings in the future.
To summarize, the overall income pattern of the Gudiyatham Municipality
indicates both positive as well as negative trends. The positive trends are on the
income side, where the Municipalityís Own Revenue has shown growth of
around 10-15% over the past 6 years. The income from Devolution Fund has
increased by around 50% p.a. over the last 5 years.
On the negative side the Municipalityís borrowings is very high resulting in very
high interest payout, which is affecting its Debt Service Ratio. The operating ratio
is also high at 91% leaving only around 10% for debt service. The collection
performance of the Municipality is poor and needs to be improved. Thus the
Municipality needs to augment its resources for future investments and servicing
of debt.
With more effective management of resources, there is scope for further
enhancing credit worthiness and revenues of the Municipality.
On our review of the past 5 years financials of Gudiyatham Municipality, we find the
following major variations in the various heads of income and expenditure resulting
in disparities in financial results :
The accounts for the year 2006-07 are un-audited and hence some of the heads of
income and expenditure are showing variations as given below :
Income
There is a reduction in Devolution Fund income by around Rs. 100 lacs in 2006-07.
The same is on account of the fact that certain interest dues and repayment of
- 83 -
Voyants Solutions Private Limited