Unraveling Chennai Corporation’s SWM Budget - the process and the (shocking) results

Out of sight, out of mind seems to be the guiding principle for our behaviour towards waste. What happens to waste the minute it leaves our doorstep rarely concerns us. Unfortunately, the institutional framework for dealing with waste also reflects this. The Greater Chennai Corporation (GCC) is geared to dumping Chennai’s garbage into two overflowing landfills, transfer stations, and several illegal dumping sites, and calling the process “Solid Waste Management”.

The city is dotted with overflowing garbage bins, piles of plastic, and dirty streets. Naturally, one would assume that the GCC does not allocate enough funds to solid waste management (SWM), the result of which is visible to all of us. I decided to delve into GCC’s Annual Budget to find out how much funds is earmarked for SWM and how these are utilised. I also spoke to a retired GCC official to understand how to navigate the Budget document.

About the Budget

The GCC releases an annual budget listing out the details of their forecasted expenditure and expected revenue. This budget also serves as an indicative guideline for understanding how much and how well money is utilised across various departments and functions. As a citizen, it is imperative to understand how bureaucrats utilise your tax money. I started with the most recent budget for the financial year 2017-18.

A quick primer

While the Budget abstains from using too much jargon, it is still imperative to correctly understand terminology and concepts, as this helps in understanding the various issues in the budget.

1. Revenue Expenditure - These are annual, recurring expenses that do not result in the creation of a permanent asset (building, plant, infrastructure, etc.). Example: salaries, wages, advertisement, etc.

2. Capital Expenditure - These are one-off expenses that result in the creation of a permanent asset. Example: purchase of machinery, building, etc.

3. Depreciation - Asset related expenditure that does not result in actual outflow of cash. This expenditure exists only to show that an asset is losing its value due to wear and tear, inflation, and obsolescence. There is no payment of cash.

4. Regions - Chennai is split into three administrative regions - North, South, and Centre.

5. Zones - There are 15 Zones in Chennai. Each region has five zones.

SWM Revenue Expenses for Chennai (Greater Chennai Corporation)

Compiling data

At first glance, any layperson would find the sheer size and complexity of the Budget to be extremely intimidating. The FY 2017-18 Budget is split across several documents, and the average length of each document is 150 pages. If you expect to find a section titled “Solid Waste Management” that lays out both the consolidated capital and revenue expenditure, you are headed for disappointment – there isn’t any! This is where things get murky and blurry. As there is no section dedicated to charting out the total expenses of Solid Waste Management, I had to first identify which items could be considered under SWM. Any expenditure that mentions conservancy, composting, HDPE community bins or waste disposal found its way to my list.

The Revenue Expenditures are classified under several heads. Under each of these heads, several line items pertaining to SWM appear. For instance, ‘Salaries and Allowances to Conservancy Workers’ (code 210-10-02-04), ‘Security Expenses – Dumping Yard’ (code 220-11-03-04), etc. This way, I compiled the SWM revenue expenses (see list below) and arrived at an approximate total of Rs. 624.42 crores for the year FY 2017-18.

Revenue Expenditures  - Major heads

1. Establishment Expenses (Labor related – salaries, wages, uniforms, leave encashment, pension, etc.)

2. Administrative Expenses (Non-Labor related – rent, electricity, security, stationery and printing, internet and phone, audit, advertisement, etc.)

3. Operation and Maintenance Expenses (Related to operation and maintenance of assets – fuel consumption, upkeep, etc. Privatization and Flood Relief expenses are included here)

4. Interest and Finance Charges (Payment of interest on loans for projects)

5. Programme Expenses (Expenses on campaigns, election, and programmes)

6. Miscellaneous Expenses

Validation of data

Round 1

My next step was to tally the figure with the SWM Department Revenue Expenditure – a section that I found in another budget document - Department Expenditure. To further confound matters, SWM appears both as a “Function” and a “Department”, with no explanation regarding the difference between the two.

Shockingly, I found that the total for SWM (Department) to be only Rs. 24.68 crore, with 3/4th of the amount (Rs. 18.50 crore) booked under Depreciation! To check if this high depreciation is a one-off event, I looked at the previous budgets for FY 2016-17 and FY 2015-16 – Revised Estimate, and found that the Depreciation under both years was Rs. 17.69 crore. I reasoned that the high depreciation amount would be due to high capital expenditure incurred by SWM Department and set out to look for it.

As mentioned previously, the SWM Capital Expenditure details have been charted separately in the Budget document. Again, I found myself at yet another dead-end – the Capital Expenditure budgeted for the previous year (FY 2016-17 - Revised Estimate) was Rs. 50.60 crore and the year before (FY 2015-16 – Revised Estimate) was zero. The question remains as to where the money booked under depreciation has actually gone as the Budget does not provide any clarity.

Round 2

Next, to understand the huge discrepancy between my revenue expenditure calculations and the SWM Revenue Expenditure mentioned in the Budget, I got in touch with a retired GCC official who provided some insight into how the Budget document is drafted. Through him, I found out that most of the SWM expenses are booked under the regional and zonal accounts.

I immediately tallied all the SWM expenditures listed in the Regional Budget (North, Central, and South). A gap continued to exist – a difference of Rs. 36.68 crores, but the numbers made more sense to me now. To cross check, I computed the total of each of the Revenue Expenditure heads across both the documents – Regional Budget and the list I prepared using the Budget Document. The table is given below.

Table  1: Difference between Regional Budget and CAG Figures

Analysing the Budget

With the excruciating and tedious data gathering and data tabulation completed, my next step was to analyse the Budget and examine the effectiveness (or lack thereof!) of the centralised waste management system.

The big-ticket items on the Revenue Expenditure list are:

1. Salaries and Allowances for Conservancy Workers – Rs. 229.97 crore

2. Privatisation – Conservancy – Rs. 310.50 crore

These two items account for 90% of the Corporation’s Budget on SWM, so I looked more closely at them.

Conservancy Workers

As per the wage revision document approved by the Chennai Collector, the wages of conservancy workers (casual workers, normal workers, and drivers) range between Rs. 313 and Rs. 346. Allowing for some rounding off, this would mean that the GCC employs ~20,000 conservancy workers for the entire city. Here, it is important to note that the conservancy workers are routinely underpaid and overworked. Does this mean that the funds allocated for salaries and wages do not reach the labourers? Where is the money going?

Privatisation – Conservancy

Chennai is divided into 15 zones, of which 3 Zones (Adyar, Kodambakkam and Teynampet) are handled by Ramky Enviro Engineers through a Special Purpose Vehicle, Chennai Municipal Solid Waste Pvt. Ltd. The budget states that Rs. 310 crore is spent on this, making it the largest expense for the SWM department, not only in the current Budget but also in the previous two Budgets. This means that the GCC spends a whopping Rs. 100 crore on each of these 3 zones! In comparison, the other zones are allocated only ~Rs. 26 crore each, an amount that is clearly inadequate for the size and population of those zones. This only strengthens the argument against privatisation of Chennai’s solid waste management. It is not only an expensive and futile exercise but also citizens will not have the opportunity to scrutinize or raise questions against a private contractor.

Comparison - Is the Centralised Model really more inexpensive?

As a final step, I decided to compare the SWM budget of Chennai with a city that has a high rank in the Swachh Bharat Index and follows a decentralised waste collection model. I chose Mysuru, a city renowned for achieving 100% door-to-door collection, 80% segregation of garbage, and scoring the 1st rank in the Swachh Bharat Index in the year 2015, and 5th rank in 2017.

While the Budget itself cannot be compared with that of Mysore’s SWM Budget, per capita SWM expenditure can be compared. Mysuru’s SWM Expenditure for the year 2017 is Rs. 72.11 crore. I used the Census 2011 population numbers for both Chennai and Mysuru, and arrived at the following per capita expenditure. The difference is stark – Mysuru aims to spend half the amount per person while being one of the cleanest cities in India.

Mysuru and Chennai per capita SWM Budget

Although Chennai has plans of becoming a ‘World-Class’ city, the city can never shrug off its reputation as the city that destroyed its most ecologically sensitive marshland and migratory bird sanctuary by converting it into a massive garbage dump. While the past cannot be changed, Chennai needs to secure the future by ensuring that its waste is managed immediately and with care, instead of splurging precious funds on lavish private contractors.

The Solid Waste Management Budget needs to be revisited urgently – after allocating ~20% of the total Revenue Budget to SWM alone, Chennai does not see any result.

References

For the purpose of my research, I went through the following documents:

1. Budget Summary and Capital Expenditure http://www.chennaicorporation.gov.in/budget/Budget_2017-18/capital.pdf

2. Department Wise Expenditure http://www.chennaicorporation.gov.in/budget/Budget_2017-18/Department%20Wise%20Expenditure.pdf

3. North Region Expenditure http://www.chennaicorporation.gov.in/budget/Budget_2017-18/NORTH_EXPR.pdf

4. South Region Expenditure http://www.chennaicorporation.gov.in/budget/Budget_2017-18/SOUTH_EXPR.pdf

5. Central Region Expenditure http://www.chennaicorporation.gov.in/budget/Budget_2017-18/CENTRE_EXPR.pdf