GVMC maintains prudent fiscal path with strong revenue growth

Time of India

13 hours ago

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Visakhapatnam: Greater Visakhapatnam Municipal Corporation (GVMC), with an annual budget of nearly Rs 5,000 crore, followed a largely prudent and growth-oriented financial trajectory between 2019-20 and 2023-24.
The total revenue income increased from Rs 641.72 crore in 2019-20 to Rs 948.77 crore in 2023-24, driven by a near doubling of tax revenue (from Rs 215.98 crore to Rs 408.73 crore) and steady growth in non-tax revenue (from Rs 295.52 crore to Rs 419.06 crore).
However, assigned revenues declined sharply (from Rs 103.52 crore to Rs 57.41 crore). GVMC's 'other income' showed marked volatility during these five years, rising steeply from Rs 26.71 crore in 2019-20 to a peak of Rs 99.7 crore in 2020-21, likely due to one-time or extraordinary inflows, before falling to Rs 68.05 crore in 2021-22 and Rs 63.57 crore by 2023–24.
Grants and subsidies remained negligible throughout, indicating increasing fiscal self-reliance.
On the expenditure front, revenue spending surged from Rs 433.03 crore to Rs 811.66 crore, with operation and maintenance costs nearly tripling (from Rs 310.36 crore to Rs 698.28 crore). Administrative expenditure spiked to Rs 66.48 crore in 2023-24, while interest payments declined from Rs 30.86 crore to Rs 22.78 crore, suggesting improved debt servicing.
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Capital income remained largely grant-dependent, peaking at Rs 509.83 crore in 2019-20 and stabilising at around Rs 408.37 crore by 2023-24. Notably, GVMC avoided borrowings throughout the period. Capital expenditure rose from Rs 340.73 crore to Rs 484.75 crore, with capital works consistently forming the bulk of this spending.
These are among the key findings of a study conducted by Prof Peteti Premanandam, head of the department of political science and public administration at Andhra University, and research scholar Thanga Srinivasa Rao.
The study was published in the 'YMER' research journal.
Effective financial management ensures that resources are allocated judiciously, fiscal stability is maintained, and the city's infrastructure and services are equipped to meet the needs of its growing population, Premanandam and Rao said. "In terms of overall revenue growth, GVMC witnessed a significant increase in total income, from Rs 641.72 crore in 2019-20 to Rs 948.77 crore in 2023-24.
The corporation's financial management prioritised essential service maintenance and infrastructure sustainability while maintaining control over debt-related expenditure.
The rising expenditure also reflects the mounting pressures of urban governance amid growing demands and higher service delivery costs," said the researchers.
However, the revenue growth rate tapered off in the final two years of the period, indicating that while the corporation expanded its income base, the pace of growth had begun to slow.
"This deceleration may be attributed to market saturation or diminishing returns from earlier revenue-enhancing strategies. GVMC's financial performance over the five years indicates an overall positive trajectory, with notable gains in tax and non-tax revenues despite fluctuations in other income streams and limited government support.
Yet, the volatility in assigned revenues and the minimal role of grants and subsidies suggest the need to diversify income sources and enhance fiscal resilience against potential reductions in external funding," they added.
GVMC plays a central role in managing vital urban infrastructure including roads, public transport, sanitation, water supply, and waste management. Sound financial governance enables the corporation to allocate adequate funding to these sectors. According to experts, through strategic budgeting and disciplined spending, the civic body can pursue long-term infrastructure planning without the risks of overspending or underfunding.
POSITIVE TREND
Total revenue income rose from Rs 641.72 crore in 2019-20 to Rs 948.77 crore in 2023-24, a cumulative increase of nearly 48%
Tax collections nearly doubled from Rs 215.98 crore to Rs 408.73 crore
Non-tax revenue increased from Rs 295.52 crore to Rs 419.06 crore, suggesting stronger income from fees, rentals, and user charges
Assigned revenue dropped significantly from Rs 103.52 crore in 2019–20 to Rs 57.41 crore by 2023-24
Operation & maintenance costs more than doubled from Rs 310.36 crore to Rs 698.28 crore
Administrative expenditure rose notably in 2023-24, reaching Rs 66.48 crore compared to Rs 48.33 crore in 2019-20
Interest payments decreased from Rs 30.86 crore to Rs 22.78 crore, signalling better debt management
Spending on capital works increased from Rs 262.39 crore to Rs 344.38 crore, underscoring infrastructure investments
GVMC reported zero borrowings from 2019-20 to 2023-24, maintaining a debt-averse approach during the study period
Other income peaked at Rs 99.70 crore in 2020-21 but settled at Rs 63.57 crore in 2023-24