The city municipality’s finances are in such bad shape, it is considering salary cuts for its employees if its revenues don’t improve in the next few months.
The Brihanmumbai Municipal Corporation (BMC), is the country’s richest civic body, but its two key sources of revenue — octroi and property tax — are far behind its budget this year of Rs 19,000 crore.
The BMC’s chief accountant (finance) issued a circular on October 26, to all departments suggesting that no new projects be taken on till the old ones are completed.
“Establishment costs (salary, various allowances) are rising daily while revenue is going down significantly. If the situation does not improve, the BMC will face a major deficit this year,” the circular said.
“In October 2008, octroi revenue was recorded at Rs 437 crore, in October 2009, it was only Rs 387 crore,” said NA Pathan, head of the octroi department.
“The global meltdown saw many private firms cut down on staff size, which is something we (BMC) can’t do. Salary cuts are something we can do,” a civic official said on condition of anonymity as he is not authorised to speak to the media.
“Last year, the civic octroi revenue was Rs 4,514 crore. This financial year, the department is targeting Rs 4,425 crore, almost Rs 90 crore less. For the first time in decades, octroi revenue might be on the decline,” said a senior official from the finance department, again requesting anonymity.
The official added that if the economic situation does not improve, the BMC could cut staff salaries by 10-15 per cent for a few months.”
Sharad Rao, Municipal Mazdoor Union leader, said: “A global recession will definitely affect the BMC’s revenue but this is a temporary phenomenon — civic octroi revenue will go up significantly by December. No one can tell what things will look like in the next five months, but we will not permit staff salary cuts at any cost.”