The financial crisis in the Brihanmumbai Municipal Corporation (BMC) is already having a rather direct effect: a drastic reduction of spending on creating new public amenities in the city. Figures released in the civic budget 2016-17 show the BMC’s weak financial situation. It has now been forced to impose the largest cut on its budget in the past five years. From announcing a budget outlay of Rs33,519.5 crore last February, the BMC has now, silently, revised this outlay to Rs26,479 crore. Hence, even as it announced the 2016-17 budget for the coming year, it silently shrank last year’s budget by 21%, the highest in the past five years.
What does this shrinking really mean? A former chief auditor in the BMC said this is symptomatic of two things. “The BMC slashes its budgets for two reasons — one is that clearly they have not been able to spend enough and their utilisation is poor. The other and the worrying part, however, is they are struggling to put together enough revenue to carry out their projects,” he said, not wishing to be named.
The former auditor’s wings are backed by some data analysis done by HT. Since 2011, the reduction in the revised estimates of capital expenditure has never been more. Capital expenditure is the expense incurred on new works the civic body wishes to take up. This reduction in the 2015-16 budgetary and revised estimates is as much as 35%, which in effect, means the BMC believes it will need only 65% of the budget it had allocated last year for new developmental works. The implication of this is that the actual expenditure, officials said, will be lesser than 65%. Since 2011, the reduction in the estimates for capital expenditure has always been in the range of 27% to 33%.
Senior civic officials are especially worried as this is the election year, which means heightened expenditure from parties to woo the electorate. In 2009, when the city saw both the state and the national polls being held, the BMC had spent in excess and put its coffers in jeopardy. But an official said this weak financial state means such excesses will be arrested. “We don’t have the monetary resources to fund corporators’ wishlists, even if this is the election year. But we will have to be careful while sanctioning major projects.”