BMC’s cash crunch could affect your life | mumbai | Hindustan Times
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BMC’s cash crunch could affect your life

mumbai Updated: Dec 05, 2009 01:48 IST
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The Brihanmumbai Municipal Corporation (BMC), in a report to the Standing Committee, has suggested drastic measures to save itself from massive budget deficits that would put several projects that affect the quality of your life — from underground parking lots to open spaces — to be put on hold or on the slow track.

This was necessitated by the pay hike to 1.1 lakh civic employees under the Sixth Pay Comm-ission, coupled with the dip in octroi collections, which could leave India’s richest civic body with a deficit of Rs 4,512 crore over the next five years if the suggestions are not accepted.

The deficit could rise by Rs 1,306 crore in 2011-12 and Rs 4,512 crore in 2014-15. The largest deficit posted before this was in 1999 when expenses exceeded revenue by Rs 644 crore.

The report suggested new taxes or an increase in existing ones, like fire brigade tax.

The Sixth Pay Commission, introduced in 2005, but implemented by the BMC this year, would raise the wage bill by Rs 1,800 crore a year. While the BMC paid Rs 3,226 crore in salaries in 2008-09, it will pay Rs 5,192 crore in 2009-10.

The report, debated by the Standing Committee on Friday, projected a loss of Rs 603 crore in the next fiscal. The BMC’s budget of Rs 19,000 crore is higher than Goa’s, but it is suffering from a dip in octroi and property tax collections.

Expect to see projects like construction of new hospitals to be stalled. Also, projects to alleviate the city’s chronic parking problem are now unlikely.

HT had reported on November 17 how the cash crunch could hit projects, like the wax museum. BMC officials had said expenditure at the ward level would have to be cut by 25 per cent. “Only duties, like water supply, will be okayed,” said the report submitted to the Standing Committee, a copy of which is with the HT.

The report also suggested a cut of 25 per cent in corporators’ area development funds. Each corporator gets Rs 35 lakh a year — Rs 81 crore in all for the 227 corporators — to spend for the uplift of his or her ward. However, corporators opposed the suggestion. Ashish Shelar, of the Bharatiya Janata Party, said: “The BMC won’t save much by reducing our funds.”

Municipal Commissioner Swadheen Kshatriya, who took charge on Friday, said: “I will study the report within a week.”