The Budget Coordination Committee interacts

“The BCC manages the Auroville City Services (CS) budget, which is the collective budget of Auroville,” explains Suryamayi. “Our job is to ensure that contributions from Auroville’s income generating units are collected; to allocate and disburse funds from the CS budget to various community beneficiaries; and lastly, we guard that the City Services Reserves are not depleted.”

The work is far from easy. Because of the economic impact of COVID-19, the BCC faced a 12.2 % decrease of internal income in the last financial year (2020-2021). “We had to cut our disbursements accordingly,” says Mahi. “And we would have had to cut even more if it wasn’t for a saving grace, the unprecedented financial support Auroville received from many people outside Auroville. The income from external contributions was 253% higher than in the previous year!”

The total income was Rs 2,170 lakhs, of which Rs 1,939 lakhs came from within Auroville (Auroville’s commercial units, Auroville’s financial services, other services, guest houses and guest contributions, and donations from individual community members) and Rs 231 lakhs from external contributions, including the Government of India grant for educational research, and donations from abroad.

The total disbursement was Rs 1,882 Lakhs. This included maintenances for Aurovilians, the recurring monthly expenses of Auroville’s services, and non-recurring expenses such as urgent building repairs or gratuity settlements for non-Aurovilian employees. “We reduced our expenses: the service budgets were cut by 30% and the non-recurring expenses by 38.4%. The Aurovilian maintenances, however, were not touched. And unlike earlier years, because of the economic uncertainty caused by the COVID 19 pandemic no new budget requests were invited,” says Suryamayi.

To the surprise of the BCC, the reserves at the year’s end showed a substantial increase. “We started the year with a reserve of 620 lakhs and ended with a reserve of 907 lakhs. This reflects the great efforts made by community services to work within the reduced budgets and using their own reserves where required, and by income-generating units to continue their contributions as much as possible. In addition, great generosity was shown from within and without Auroville with extra contributions pouring in. In April 2020, we posted an appeal for funds and quite a few Auroville units responded. We received 20 lakhs from inside Auroville and another 20 lakhs from outside, from individuals and Auroville International Centres. We also asked the Aurovilians who receive a maintenance if they would be OK to receive a smaller amount and contribute to the general pot. Many individuals responded positively. There was a lot of goodwill,” says Inge.

The commercial units

One of the responsibilities of the BCC is to ensure that the income generating units contribute to the CS budget in accordance with the minimum levels approved by the Auroville’s Funds and Assets Management Committee (the FAMC).

“The commercial units are supposed to contribute 33% of their profits to Auroville,” says Hans. “One of the problems we face is that the 33% contributions that are payable this financial year are still calculated over the profits / turnover of the previous financial year.

Chartered accountant Manuel Thomas from Chennai and Prof. Dr. Henk Thomas from The Netherlands, who in 2013 published the monograph on Auroville’s economy “Economics for People and Earth”, had already warned against this practice. For the unit might not have sufficient liquidity in a bad financial year to pay the 33% of the profits generated in the previous year.

For the CS it would be better if profits are calculated and paid on the basis of the expected profit of the current year, with the difference adjusted afterwards, as is done by the Income Tax. But this is an issue of the FAMC – they make policy, the BCC only executes.”

A separate unit of the BCC, called BCC Finance, is responsible for these calculations. “Here we faced another problem,” says Mahi. “The accounts of the units do not follow identical data entry systems; we have to spend a lot of time calculating what the unit has to pay to Auroville. This will change when the standardized accounting system, introduced by the FAMC, is finally operational, hopefully by the next financial year.” Once the BCC Finance has made the calculation, do the units pay promptly? “Most of them do,” says Mahi. “A few unit executives have difficulty understanding that in this financial year, which is a difficult year for many units, they have to pay 33% of the sometimes large profits they made in the previous financial year. So we have quite a few requests for exemption.”

“It is a careful job,” explains Hans. “We deal with the units as integral parts of Auroville, not as mere money suppliers. We are not aiming at ‘getting their money’ – their contributions are not a tax. The challenge is to make the unit executives want to pay a happy and necessary contribution to Auroville, instead of them feeling that they ‘have to’ pay.” Is the BCC successful? “We have been to a large extent, judging by the extra contributions that were made during Covid-19,” says Mahi. “But amongst the larger units, many could be contributing a whole lot more than 33%, but there are not many who do. Most pay up to the exact paisa.”

The maintenances

The vast majority of the BCC’s disbursements, 66.6%, are towards maintenances. Maintenances are allocated to Aurovilians working for Central Services and to those unable to work and support themselves financially. A full time adult City Services maintenance in 2020-2021 was Rs. 16,020 / month. Part of the maintenance is allocated as credit for specific uses (for lunch Rs 1,870, for the health fund Rs 450, in kind Rs 1,700); Rs 6,000 as ‘kind’, which can be used anywhere in Auroville; and Rs 6,000 in cash that can be used within or outside of Auroville.

“We are very aware that the maintenances are too low,” says Hans. “When, in January this year, many salaries of Auroville’s non-Aurovilian employees were increased by 5%-10%, we did not follow that with an increase of the Auroville maintenance. Last year, as an inflation correction, we had made a minor increase of the maintenances, the lunch scheme and the in-kind scheme (from a monthly total of Rs 16,020 to Rs 17,000). But this is not enough, especially as inflation is rising. The Covid-19 pandemic forced us into a very conservative budgeting as we had no idea what was going to happen. But as the income was higher than expected, and the reserves went up, we have now a bit more space to think about increasing the maintenance.”

“We had a few meetings only about the maintenance, and how to improve it,” says Aurosugan. “We studied the cash/kind structure, we studied the children’s maintenance and we looked into the reasons for allocating a maintenance.”

Some changes were effected. One is that, earlier, a person had to explain what he or she was doing in order to qualify for a maintenance. “This we changed,” says Aurosugan. “Now we have a policy based on trust. If you ask, you get, for we assume you need the maintenance. Of course, this could be misused. But we do not want fear of abuse to be the basis of our maintenance policy. We are working on basic trust, instead of basic mistrust.”

“Another change is that we increased the children’s maintenances,” says Hans. “In the past, one CS maintenance gave the right to one child maintenance; we have changed that to ‘all children of Auroville are eligible for children’s maintenance’. This was a major step for families.”

“We also looked into the possibilities of giving higher subsidies to community services so that they can become cheaper and eventually free for all Aurovilians. That also goes towards the ideal of ‘no exchange of money within Auroville’,” says Suryamayi. “We have increased the budgets of the Solar Kitchen, Pour Tous Water, the Puncture Service and the Eco Service .” In the process, the BCC has also been looking at services that could be managed better. The purpose,” says Hans, “is to help their functioning, not to control them. Our interest is only financial. If there is a conflict situation which is affecting the management, we will take the matter to the Auroville Council.

Towards a basic income?

Are all these changes steps towards Auroville providing a basic income to each Aurovilian who works for City Services? “We haven’t really discussed the basic income concept in depth, nor if we want to move there,” says Hans. “It might be attractive – but we still are far away for realizing such a system. For the time being we would be happy if we can increase the level of the maintenances, and also the number of CS maintenances Auroville can provide.”

“We are looking into the possibilities of increasing that number as there is a true need,” says Mahi. “For example, many people working for Auroville’s working groups do not get a maintenance for that specific work. In the BCC itself only members who work full or half time in the BCC Office receive a maintenance. The others attend meetings and carry out work in subgroups but have to get their income from somewhere else. But increasingly, more Aurovilians are applying. We would be happy if we would be able to give more maintenances, but that’s not yet the case.”

Income inequality

When we talk about maintenance, we are only talking about people working for City Services,” says Aurosugan. “People working elsewhere, for example in commercial units, do not receive a CS maintenance and are not subject to the CS maintenance limitations. The approved limit for people working for commercial units is a maintenance amount of Rs 20,000 /month. This amount can be deducted as an expense; but they can take more from the 67% of profits of the unit that do not go to the community. But this is not a topic for the BCC; it is a policy matter to be decided by the FAMC.”

“The inequality exists,” confirms Mahi. “The unit holder can use the 67% of the profits in the way he or she wants. Many use it to pay for the education costs of their children. Some make specified or unspecified donations to the scholarship fund that helps cover the educational expenses of Auroville youth. But I feel that the entire question of loans and higher education has to be addressed by Auroville. The inequality is felt by many people working in services. And donations from the scholarship fund are only available for studies within India, not abroad. It is a very diverse and complex issue and should be a topic of in-depth discussion in a general meeting.”

The community budgeting process

This, and many other issues, led the BCC to initiate a community budgeting process: to explain to the community what the BCC is doing, and to get the community’s ‘feel’ about the budgetary priorities and the way forward. “Today’s budgets are marked by history and the community has never really looked into these allocations,” says Suryamayi. “Post COVID is a good time for reflections, to define priorities, to identify key sectors to be funded and study our economic uncertainties.

“We had two sessions: the first as primary information sharing on what the BCC does and what budgets we are allocating to what sectors of community activity. This included a lot of contextual information: what kinds of services are active in each sector, what do these services do, who do they serve, and how many people are working in them? The second session went into details: people had an opportunity to discuss each sector in small groups, with a BCC member and a sector representative present to answer specific questions. The next step will be about prioritization and also if there are missing services in our landscape. So we are not only looking at the historical budgets, but also at the way forward. That includes a reflection on the sources of income, so that we have a clear view on both the income and the expenditure and if we are happy with the proportions or if it is felt that this should be changed.”

The impact of large GOI grants

In this context, Aurosugan mentions the possible impact of large Government of India donations as mentioned in the minutes of the Governing Board of its meeting in November last year [see AVToday # 390 of January 2022, page 3, eds.]. “We understood that such grants will only be used for capital expenditure. But it appears that no thought has gone into the question how the connected running costs will be covered. As a rule, such costs are not carried by GOI grants. So those costs will fall on the BCC, and so on the income that is generated by the units. Those large grants will boost our infrastructure and housing, but Auroville’s own income generating capacities will not be sufficient to carry these costs. Our internal economy has to grow to support that. But no new commercial units have come up to help sustain such expenditure. We fear that with our present economy, such large investments will not be sustainable. Moreover, if more people join Auroville, where will they find employment? And if that employment is in the non-income generating sector, won’t it add to the difficulties of maintaining all these people at an adequate level?”

These questions, says the BCC, will need a lot of community reflection.

The first session of the community budgeting process can be seen at https://www.youtube.com/watch?v=q_lbg2Wjv24.



A presentation of the outcomes of community budgeting sessions held with randomly selected Aurovilians can be seen at https://youtu.be/HNe-SQbD1N0



The BCC website can be visited at budget.auroville.org.in