Analysis of PMC's Budget 2011-12

A city’s budget provides a good insight into the priorities and plans of the city administration, and therefore can be used to understand the city’s sectoral priorities as well as whether the proposed expenditures are in sync with the goals, policies and plans of the city. Therefore, it is also important that the budget should be easily accessible and understandable to a common citizen as this will increase accountability and transparency of the city administration. Ideally, citizens should be able to access and understand not only the budget but only the actual expenditure on different sectors and the resultant outcomes in those sectors. However, to the best of our knowledge, such information is currently not provided by any city in the country including Pune.

Parisar has analyzed the budget of Pune Municipal Corporation (PMC) for the year 2011-12 for the following: the budgetary trends over the last few years, the sectoral priorities of PMC,general accounting practices of PMC and the ease of understanding the budget by common citizens by a method developed by Centre for Budget and Governance Accountability (CBGA).

Pune’s budget has increased by about 7% per year over the last two years increasing from Rs. 3,027 crores to Rs. 3,240 crores. Among the sectors, the transportation sector has consistently had the highest allocation with about a third of the budget, which is larger than the budgetary allocations made for education, health, sanitation and slum rehabilitation sectors put together. The water and sewage sector consistently got the second highest allocation.

In terms of transparency and accessibility of the budget, Pune scores high on certain parameters like ‘availability of the document’ and ‘timeliness of information’. At the same time, it scores really low on parameters like ‘ease of understanding the budget’ and ‘audit and performance assessment’. In the course of our study we also discovered various accounting discrepancies in the budgeting process. These are areas of concern and PMC should take steps to improve on such practices.

Yet another lapse with the budgeting process is that it is not clear how the Environment Status Report (ESR) and the Development Plan (DP) inform the budget making exercise. Currently, it appears that these three documents are independent of each other, though they are expected to work in tandem since the ESR is meant to be a status report of the city’s well being, the DP is meant to define how the city develops and the budget is supposed to allocate funds so that it develops as expected and improves the city’s overall livability.

PMC must also publish its audited financial statement as it would help citizens understand where money was actually spent, as against what was allocated in the budget. Currently, such information is not available to citizens and therefore, it is not easy to hold the PMC accountable for its actual expenditure since this information is not known. Ideally, PMC should also indicate, as part of its budgeting exercise, what are the expected outcomes of a given budgetary outlay so that the expenditure can be evaluated against them to see whether the goals are being met. Such measures would help increase citizen participation in governance and thus help to eventually improve the livability of the city.

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