Mumbai civic body spent only 48% of allocated budget on development work
Even as the Brihanmumbai Municipal Corporation (BMC) gets ready to present its 2021-22 budget in February, it has only spent 48% of the budget allocated previous year for development works, including roads, bridges, storm water drainage, gardens, etc.
Of the ₹33,441.02-crore overall budget for 2020-21, ₹11,764 crore was allocated for capital expenditure, but the BMC spent ₹5,744 crore until December 31, 2020. The number is still closer to ₹5,600 crore (45%) of the capital expenditure in 2019-20, as of December 2019.
On the other hand, the revenue income of the BMC in 2020-2021 dipped – ₹11,616 crore against the target of ₹28,448 crore, which means 40% of the target, as of December 2020 – owing to poor collection of property tax, water supply tax and income from real estate premiums coming down owing to lockdown. In 2019-2020, as of December 2019, the BMC’s revenue income stood at ₹14,828 crore against the target of ₹24,983 crore, which was 59% of the total target.
The BMC had in February 2020 presented a ₹33,441-crore budget for 2020-21, exceeding the 2019-20 budget of ₹30,692 crore. In any given fiscal, the civic body uses 60-70% of the capital expenditure budgetary allocation. The capital expenditure is around 30-40% of the total budget expenditure planned for several crucial departments such as roads and traffic, bridges, garden, health, hydraulics, development plan, storm water drains, solid waste management etc.
Till December 2020, the BMC has spent around 63% of the amount allocated for road, traffic and bridges department, 79% of the funds allocated for the coastal road project, 34% for water supply department, 33% of health budget, excluding Covid-19 related expenditure. For Covid-19, the BMC spent around ₹1,800 crore from the contingency fund and will restructure the budget for the ongoing fiscal.
In case of the storm water drainage department, the BMC spent 44% of the total allocation, solid waste management department spent 21%, sewage disposal 28%, information technology 31% and fire brigade and disaster management department 15%.
The civic body has seen major fall in collection of property tax, water bills and premiums from the real estate sector owing to lockdown.
In terms of income from different sources, BMC managed to collect ₹734 crore in property tax in the ongoing fiscal as of December 2020, compared to ₹1,810 crore as of December 2019 in the 2019-2020 fiscal. The income from real estate premiums fell to ₹708 crore as of December 2020, compared to ₹2,067 crore as of December 2019. The BMC also witnessed a substantial fall in income from water tax and income via investments or interests. The BMC has around ₹76,000 crore in fixed deposits, as of November 2020, and the ratio of fixed deposits has been going down.
P Velrasu, additional municipal commissioner, said, “Our capital expenditure is as good as last year, and all work has taken off post-monsoon. Though we had lockdown, there are several expenditures that we have to make, and even during lockdown, certain works were ongoing. If we exclude the ₹1,800 crore we spent on Covid-19, our expenditure for other departments and projects has not suffered at all.”
Velrasu added, “However, for some departments, the expenditure is less, for example, hospital buildings and Mumbai Fire Brigade. It is because of the nature of these departments. We are taking every step to improve the finances of the BMC through revenue income, revenue expenditure and capital expenditure. We are also looking to raise money for projects by issuing municipal bonds. The plan is at a primary stage, and we are working on the details.”
Ravi Raja, Congress corporator and leader of Opposition in the BMC, said, “The BMC’s revenue has been falling constantly, its income from property tax and premiums from builders has also gone down. On the other hand, the BMC has spent over ₹1,600 crore on Covid-19. I have written to the BMC regarding coming out with a white paper on the BMC’s financial condition. The administration has to clarify how they plan to keep the finances of the BMC in a good position.”
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