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Financial
Tamil Nadu

Report of 2005 - Financial Audit on Urban Local Bodies and Panchayati Raj Institutions, Government of Tamil Nadu

Date on which Report Tabled:
Date of sending the report to Government
Government Type
Local Bodies
Local Body Types
Panchayat Raj Institutions,Urban Local Bodies
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Sector -

Overview

This Audit Report, dealing with the results of audit of accounts of local bodies, is presented in two parts, Part I - urban local bodies and Part II - panchayat raj institutions with six chapters. While two chapters contain the overview of the accounts and finances of the urban local bodies and panchayat raj institutions, the remaining four chapters contain three performance reviews, three mini reviews and 16 audit paragraphs. A synopsis of important audit findings is presented in this overview.

There were six corporations and 152 municipalities in Tamil Nadu as on 31 March 2006. The urban population of the State as per the 2001 census was 2.75 crore comprising 44 per cent of the State population. While the growth rate of the total population in the State was 11 per cent during 1991-2001, it was 43 per cent for the urban population.Out of 18 functions listed in the Twelfth Schedule of the Constitution to be devolved on urban local bodies, only 13 functions were transferred.Government is yet to transfer the remaining functions and the required functionaries for carrying out the transferred functions.During 2005-06, 'own revenue' of all the urban local bodies amounted to Rs 1235.43 crore (Tax revenue: Rs 764.33 crore and non-tax revenue:Rs 471.10 crore). The percentage of revenues raised by the urban local bodies to their total receipts decreased from 47 in 2003-04 to 45 in 2005-06.Property Tax is the major source of tax revenue of urban local bodies. While the percentage of collection of Property Tax by the municipalities declined from 53 to 50 during the period 2003-04 to 2005-06, in respect of town panchayats it increased from 59 in 2004-05 to 62 in 2005-06. In the case of Profession Tax, the percentage of collection during the period 2003-04 to 2005-06 was on an increasing trend in five corporations and town panchayats,but declined from 67 to 54 in municipalities.

The assigned revenue of urban local bodies out of the proceeds of Entertainment Tax in corporations (except Chennai) and in municipalities was on a declining trend during 2003-06 whereas the same relating to Chennai City Municipal Corporation was fluctuating. While the Stamp Duty Surcharge for five corporations declined since 2003-04, in respect of municipalities after increasing from Rs 86.57 crore in 2003-04 to Rs 96.24 crore in 2004-05, it decreased to Rs 78.95 crore in 2005-06.Against the demand for user charges (mainly water charges) aggregating Rs 77.21 crore raised by the municipalities during 2005-06, Rs 53.04 crore(69 per cent) only were collected.The Director of Local Fund Audit is the statutory auditor for all the urban local bodies. As of September 2006, while audit of two municipal corporations was pending from 2002-03, in three municipal corporations, it was pending from 2003-04. The audit in respect of most of the municipalities and town panchayats was pending from 2004-05.Despite directions of the Public Accounts Committee for furnishing prompt replies to their pending recommendations arising from the audit paragraphs in the Reports of the Comptroller and Auditor General of India, 133 recommendations relating to nine reports for the years 1985-86 to 1996-97 of the Municipal Administration and Water Supply Department were pending as of March 2006.

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