BMC budget 2021: New taxes unlikely but property tax to be revised later

Important departments such as health, education, and infrastructure will not see a cut in the budgetary allocation this year, said a civic official.

Brihanmumbai Municipal Corporation's (BMC) budget 2021 for Mumbai city, to be presented before the standing committee in the first week of February by municipal commissioner IS Chahal, is unlikely to introduce new taxes for Mumbaiites. However, a revision of property tax in 2021, done every five years, is likely, according to civic officials.

BMC revises property tax every five years. (HT Photo)

The hike in property tax will not be announced in the budget document 2021, but in the months following the beginning of financial year 2021-22.

Budget 2021 outlay is likely to be larger than the previous year, according to a senior civic official.

At a time when the BMC, the country's richest civic body, is facing a cash crunch, its budget 2021 will prioritise expenditure in key areas such as health, education, and infrastructure-related developments such as roads. Funds will be allotted for at least one new infrastructure project.

"Every year, usually there is an 8% to 10% increase in the budget. Our budget will be larger this year as well, than last year, and the capital expenditure will also be more. Moreover, the important departments such as health, education, and infrastructure will not see a cut in the budgetary allocation or a reduction in the budget outlay in comparison to last year," said a senior civic officer.

The Mumbai coastal road project is likely to receive a substantial amount of funds.

"We are not introducing new taxes this year in the budget. However, during the year, a revision in the property tax is due," the officer added.

The BMC budget 2020 was pegged at ₹33,441.02 crores, which was 8.95% more than the previous year's budget. The budget 2019 was pegged at ₹30,692.59 crores.

The senior civic officer quoted above said, "The civic body is planning to increase its capital expenditure in the budget 2021. On the revenue expenditure side, the pensions and salaries will of course not be touched, but BMC is looking to bring down administration-related revenue expenditure.

Another senior civic official of the property tax department said, "There are several components of the property tax. For homes below 500 sq feet, only general tax has been waived off. This year in 2021, when we will look at a revision of the property tax, we are not going to increase the general tax or the factor component. So the increase that citizens will feel is very minimal. But the civic body's kitty is likely to see an increase in revenue by up to 17%."

Everyone owning a property in Mumbai has to pay property tax to the civic body.

For those who own a flat in a building, the property tax is mostly collected by housing society as part of the monthly or annual maintenance charges.