Faced with the threat of an indefinite strike by disgruntled employees, the municipal corporation has promised to pay them as per the Sixth Pay Commission recommendations and cough up their arrears. But this puts an additional burden of Rs 1,500 crore on the civic body, and it will come at the cost of Mumbai's maintenance and development.
The decision raises the Brihanmumbai Municipal Corporation's (BMC) establishment cost from the current 65 per cent to 87 per cent. This means only 13 per cent will be left to provide civic amenities.
"The finance crunch will reflect in a disappointing budget for the next three years till all dues are paid. It will affect services such as maintenance of roads and footpaths, cleaning drains," a senior official said, on condition of anonymity.
"The city will not get new projects for two to three years and projects such as underground parking lots at Crawford Market, the Mumbai Eye, road concretisation and reconstruction of hospitals have been postponed indefinitely."
Of the BMC's revenue of around Rs 10,000 crore, more than Rs 6,000 crore is already being spent on salaries.
"It's our endeavour to reduce the establishment cost to 50 per cent from the current 65 per cent in the years to come," civic chief Swadheen Kshatriya had said in this year's budget speech.
Salaries are paid with the money collected from citizens in the form of property tax, water and sewage charges and octroi, among other things.