Notwithstanding anything contained elsewhere in this chapter, the municipality may, with the approval of the State Government, authorize expenditure to be incurred beyond the limits of the municipal area for creation of physical assets relating to the core functions of the municipality outside the limits of such municipal area and for maintenance thereof for carrying out the purposes of this Act.
105. Exclusive use of fund for particular purpose -
(1) Notwithstanding anything contained elsewhere in this chapter, the State Government may, by order, require the municipality to establish a Revolving Fund by earmarking a portion of the Municipal Fund or a particular grant or a part thereof, or any item of receipt under any head of account, or any percentage thereof, or any share of tax receivable by the municipality other than taxes, duties and fines assigned to the municipality under this Act or any part thereof, to be utilized exclusively for such purpose related to municipal functions as may be specified by the State Government, and it shall be the duty of the municipality to act accordingly.
(2) Every municipality shall constitute a separate fund called the Basic Services to the Urban Poor Fund for the purposes of delivery of basic services of the urban poor, including the inhabitants of slum areas.
Explanation- For the purposes of this sub-section, ‘basic services’ shall include expenditure on capital and revenue account directly incurred on Water supply, Drainage, Sewerage, Construction of community toilets, Solid waste management, Connecting roads, Street lighting, Public parks and play grounds, Community and livelihood centers, Community health centers, Pre-primary and primary education centers, Affordable housing for poor, and other services as determined by the Municipality, but shall not include establishment expenses, including salary and wages, not directly and specifically incurred for delivery of basic services to the poor.
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(3) A minimum of twenty five percent of the funds within the municipality’s budget shall be earmarked and credited to the fund created under subsection (2), on yearly basis. The allocation to the fund shall be made from the following municipal budgetary resources-
(a) Municipality’s own sources of revenue e.g. taxes, fees, user charges and rent etc.;
(b) Assigned revenues;
(c) Allocation from Central and State Finance Commissions, and other inter-governmental transfers;
(d) Contributions, in cash or kind, gifts from individuals, organizations and donors for services to the poor;
(e) Grants from externally aided projects;
(f) Sale of municipal assets;
(g) Others sources, as determined by the state government.
Explanation- For the purpose of this sub-section, any grant or contribution by whatever name called, received by the Municipality which is exclusively for the development of slum areas, shall not be a part of the earmarked funds.
(4) The municipality shall prepare a separate budget known as P-budget along with the municipal budget, every year, which shall furnish the details of income and expenditure under fund created under sub-section (2).
(5) The fund created under sub-section (2) shall be in the nature of a nonlapsable fund. In the event of the annual allocations not fully utilized, the balance funds shall not be transferred to the municipal fund but carried forward for utilization in the subsequent year(s). The fund allocation in the subsequent years shall be considered in addition, and shall not be reduced by the unspent funds of the previous year(s).
(6) The municipality shall open a separate bank account with a nationalized bank called, ‘Basic Services to Urban Poor Fund’ account, wherein funds earmarked under sub-section (3) shall be periodically deposited, ensuring that the yearly allocation is equal to the allocation as in the municipal budget.
(7) The municipality shall maintain separate books of accounts with detailed accounting heads in line with municipal accounts manual, as referred under section 113, for operation of this special fund accounts.
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106. Operation of accounts- Subject to the other provisions of this Act, payment from the Municipal Fund shall be made in such manner as may be determined by regulations, and the heads of accounts referred to in section 99 shall be operated by such officers of the municipality as may be authorized by the municipality by regulations.
107. Investment of surplus money -
(1) Surplus money standing at the credit of any of the heads of accounts of the Municipal Fund which are not required, either immediately or at near future may, in accordance with such regulations as may be made by the municipality in this behalf, be transferred by the municipality, either in whole or in part, to any other head of account of the Municipal Fund:
Provided that no such money shall be transferred permanently from any of the heads of accounts to any other head of account without the previous approval of the municipality:
Provided further that such surplus money standing at the credit of the Commercial Projects Account of the Municipal Fund shall not be transferred to the General Account of the Municipal Fund.
(2) Surplus money which are not transferred under sub-section (1) may be invested in public securities or small savings schemes, approved by the State Government, or deposited at interest with such scheduled bank as may be determined by the Standing Committee.
(3) Profit or loss, if any, arising from the investment as aforesaid shall be credited or debited, as the case may be, to the account to which such profit or loss relates.
Chapter - 13 Budget Estimates
108. Preparation of budget estimate of municipality-
(1) The Municipal Commissioner or the Executive Officer shall prepare in each year a budget estimate along with an establishment schedule of the municipality for the ensuing year, and such budget estimate shall be an estimate of the income and expenditure of the municipality.
(2) Subject to the provisions of sub-section (2) of section 99, the budget estimate shall separately state the income and the expenditure of the municipality to be received and incurred in terms of the various heads of accounts.
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(3) The budget estimate shall state the rates, at which various taxes, surcharges, cesses and fees shall be levied by the municipality in the ensuing year.
(4) The budget estimate shall state the amount of money to be raised as loan during the ensuing year.
(5) The Mayor and the Chairperson shall present the budget estimate to the Standing Committee before the fifteenth day of February in each year.
(6) The budget estimate shall be prepared, presented and adopted in such form and in such manner, and shall provide for such matters, as may be prescribed.
(7) The annual statements prepared under sub-section (1) of section 117 and sub-section (2) of section 131 together with the reports prepared under subsection (1) of section 107 and under sub-section (2) of section 329 shall be enclosed with the budget estimate.