Mumbai civic body explore new sources of income

Financial reforms, exploring new avenues of income, and recovery of dues are Brihanmumbai Municipal Corporation’s (BMC) ways of moving forward in cash strapped times

Financial reforms, exploring new avenues of income, and recovery of dues are Brihanmumbai Municipal Corporation’s (BMC) ways of moving forward in cash strapped times. Looking at the budget trends of the past few years, the expenditure of the civic body has grown drastically, in the midst of a shrinking income.

BMC building. (Hindustan Times)

BMC’s capital budget in 2021 is 71% more than the previous year. In 2018-19, BMC’s capital expenditure was ₹5,432.24 crore, which was increased to ₹10,903.58 crore in 2020-21, and to ₹18750.99 crore in 2021-22. Similarly, BMC’s revenue expenditure has also increased to ₹20,276.33 crore in 2021, from ₹19,096.74 crore in 2020. On the other hand, in the past year, BMC saw a reduction of ₹5,876.17 crore in its estimated income, and received only ₹22,572.13 crore, instead of the estimated ₹28,448.30 crore.

In light of its growing expenditure, BMC budget on Wednesday said “MCGM needs huge funds in future to meet the capital expenditure. Hence, it is a necessity of the time to seek other avenues of revenue.” These include new charges for municipal services (BMC is considering levying these charges and has not finalised it), financial reforms to make Brihanmumbai Electric Supply and Transport (BEST) more viable and creating a separate fee regulatory authority for timely revision of municipal taxes. BMC is also hopeful of recovering decade-old loans from state government and its various bodies.

BMC is now looking at revising its scrutiny fee from the fire safety point of view and levying fire service fee, which will generate an estimated revenue of ₹140 crore and ₹20 crore respectively. Scrutiny fee will be levied for granting permission for providing fire and life safety measures in buildings, as per the Development Control and Promotion Regulation 2034, on the built-up area of the building. Considering the increase in the capital values of buildings, this fee will be revised. A fire service fee will be applicable for granting a no-objection certificate from the Mumbai fire brigade.

BMC will also hire a consultant for financial reforms in BEST undertaking, to make public transport more viable, and revive the organization financially. This year, BMC has given BEST financial aid of ₹750 crore, and an additional ₹406 crore to pay pending gratuity of 3646 employees. In 2020-21, BMC had given financial aid amounting to ₹918 crore to BEST.

BMC will also form a fee revision authority, an independent body for timely revision of all municipal charges and taxes. Municipal commissioner IS Chahal said on Wednesday, “We are loosing on a lot of revenue as municipal taxes and fees are not revised as per the requirement of the time. It becomes difficult sometimes, for elected bodies to take timely decisions about such revision. Along the lines of (Maharashtra Electricity Regulatory Commission) MERC for electricity, BMC too needs to have a body that will take care of timely tax revision, that is binding on BMC.”

Among expected revenue income, BMC is hoping to recover ₹1,600 crore from Slum Rehabilitation Authority, pending since 2008-09, as land premium and infrastructure development charges.

The Maharashtra government also owes the civic body ₹5,274.16 crore, towards pending property tax dues, water charges and sewerage charges, and includes ₹3,629.83 crore as grant in aid from the education department. Chahal said, “We have been routinely following up with the state government and have received assurance that this money will be given to BMC soon.”