Merger blues for hmda

Merger of panchayats with the GHMC for administrative reasons could undermine the HMDA, which has already started feeling the pinch of 34 revenue-rich local bodies going to the GHMC, will go deeper into debt

“HMDA includes 830 Gram Panchayats, out of which only 34 gram panchayats have been merged with the GHMC. So, technically there shouldn’t be any scope for a ‘loss’ or a ‘debt’. As part of the merger, the GHMC just has authority over the local bodies. A portion of all the money that the GHMC collects from the local bodies will have to be deposited into the Metropolitan Development Fund. Only if they fail to do it, there is scope for a loss.” Powers relating to development and co-ordination continue to vest in the HMDA"

TSS Siddharth

A few weeks ago the Greater Hyderabad Municipal Corporation (GHMC) had agreed to the merger of 34 Gram Panchayats. This means that the GHMC would see the area under its jurisdiction increase from 625 sq km to 921 sq km. The gram panchayats were earlier under the jurisdiction of the Hyderabad Metropolitan Development Authority (HMDA).

The revenues relating to construction activity (LRS and BPS) collected from these panchayats added up to a tidy sum, often accounting for 60-70% of the HMDA’s total revenues from the panchayats. However, post-merger only the GHMC can access the revenues of these panchayats.

As things stand now, it appears that the merger has negatively impacted the GHMC as well as the HMDA. The HMDA used to earn revenue through the LRS (Layout Regularisation Scheme) and BPS (Building Penalisation Scheme) applications pertaining to these 34 panchayats. But since they now come under the GHMC, the HMDA can no longer demand a share of the pie.

When the HMDA was formed after subsuming former civic bodies like HUDA and a few others, it took under its wing not only their territories, but also their fiscal deficits. Till date, they have not been able to break even so much so that the HMDA currently has combined net debts totaling Rs 1,063 crore.

According to a senior official of the HMDA, following the merger of panchayats with the GHMC, the HMDA would not be able to access funds to the tune of Rs 90-100 crore every financial year. When contacted, Abdur Raouf, a senior official of the Planning Department of the HMDA said that he was not authorised to speak on such matters. On the revenue model, he merely said: “The money will come somehow.”

However, LRS and BPS continue to be the major sources of revenue. These schemes only come into play only when a particular area sees a lot of construction activities. Now, with the GHMC presiding over areas from which HMDA used to get money; the HMDA will go deeper into debts. For example, Nizampet had been HMDA’s major source of income for many years, considering the fast-paced development there.

Of course, all is not well with the construction activity. As mentioned in an article published in these columns on September 6 titled ‘GHMC ready for a makeover’, M T Krishna Babu, Commissioner, GHMC, said, “Nizampet has seen rapid growth, but this growth was due to many malpractices like bribes. There is need for systematic growth in these areas.”

According to building norms, in Nizampet area there is permission only for G+1; yet, many high-rise structures have come up in its vicinity. Apart from the official tussle over the merger of the gram panchayats, some of the panchayats themselves are opposed to the merger.

Earlier for 100 square yards of land, the tax that was levied was Rs 2000. Now, after the merger, under the garb of Betterment Charges, the price has been increased to Rs 20,000! With the GHMC virtually constricting the revenue sources of the HMDA through merger of panchayats, questions are being raised whether the HMDA should countenance all this.

What does HMDA do?

The HMDA was set up for the purpose of planning, co-ordination, supervising and promoting the planned development of the Hyderabad Metropolitan region. It coordinates development activities of the municipal corporations, municipalities and local authorities like, the HMWS&SB, AP Transmission Corporation and the AP Industrial Infrastructure Corporation.