City Corporate & Business Plan - Municipal

Chapter ñ 14 Final Report: Ambur Municipality
14.7 IMPACT OF POTENTIAL IMPROVEMENTS
Amburís ability to improve on its financial performance hinges primarily on its ability
to sustain and improve on the revenue growth noticeable in recent years.
Specific interventions with respect to revenue realization and cost management are
detailed in chapter 12 of the report. On ëFull Project Investment Scenarioí basis,
Amburís own revenues (comprising taxes, user charges and other income) could
grow from Rs. 222 lacs in FY 2006-07 to Rs. 1290 lacs by FY 2028-29, implying an
absolute growth of 24%. Ambur has vast potential for increasing its own income
given the growth achieved in the last few years. Areas for revenue enhancement in
own revenue include :
Property Tax ñ through an enhanced revision in ARV, widening assessee base
and closer scrutiny. Besides periodic increase (every 5 years) in property tax
rates.
Professional Tax ñ sustaining a higher assessment growth.
User Charges ñ periodic increases in user charges for water connections and
sewerage connections. The Municipality could generate additional Rs. 600 lacs
of income per annum by FY 2028-29 by providing water connections to 80% of
property tax assessments and sewerage connections to 70% of property tax
assessments.
Ambur also needs to explore scope for private sector participation for development
of remunerative projects and city beautification projects that have been identified
by Ambur.
While there is potential for expenditure control in certain areas (as in the case of
energy costs and leakage in water supply), the focus of cost management should
be to shift expenditure from administration to better asset management and service
levels. We have not factored in any cost reduction in the FOP and have assumed
that any savings generated from cost reduction would go into augmenting service
levels and better asset management.
A comprehensive energy audit is required, given that 60% of its operations and
maintenance expenditure is spent on electricity charges. Plugging leakage in the
water supply network and installation of timers and energy savers on the street light
network are important interventions needed in the context of Amburís high power
costs.
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