City Corporate & Business Plan - Municipal

Chapter ñ 9 Final Report: Ambur Municipality
The broad financial analysis of the Ambur 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 summarise, the overall income pattern of the Ambur Municipality indicates
more negative features than positive 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 2% p.a.
Besides, the municipality also has very high borrowings at Rs. 331 lacs and is
fully leveraged. The municipality can resort to further borrowings for new
project identified only based on the additional income to be generated.
Around 53% of the property tax assesses have water connections, but it can
be further improved up to 85%. The population per residential assessment is
high at 7.50 persons, which indicates low coverage. The municipality has
therefore enough scope for increasing the property tax assessments.
On the negative side, the municipality has a very poor collection
performance in respect of property tax, profession tax and water charges
and there is enough scope for improvement. The non tax income is also low
compared to other heads of income and the Municipality should look in to
ways and means for increasing non tax income. Therefore the municipality
has to look at various mechanisms to improve its scope of own income to
service the additional borrowings in the coming years.
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 Ambur 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 years 2005-06 and 2006-07 are un-audited and hence many of
the income and expenditure are showing variations for these 2 years as given
below:
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