Why ₹4,900 crore is ‘vital’ to MMRDA and BMC

Mumbai's transport agencies are in a funding dispute over ₹4,973 crore for vital projects like metro lines and coastal roads, impacting urban infrastructure.

MUMBAI: As endless lines of vehicles remain trapped in traffic gridlock below, a superhero whooshes past overhead. It’s a metro train, the darling of Mumbai’s evolving mass rapid transit system – an ever-expanding network of elevated metro corridors that has the city on a roll.

Why ₹4,900 crore is ‘vital’ to MMRDA and BMC

Mumbai’s western shoreline boasts another transport superhero – a coastal road that cuts journeys from hours to minutes. It’s a game-changer that will eventually stretch the length of the city’s western coast.

But every mega-project comes with a staggering price tag, and the agencies changing the way Mumbai moves are now locked in a battle over funds to support ‘Vital Urban Transport Projects’. These are infrastructure networks deemed urgent and vital to upgrading the city’s transportation system, a classification created in 2017 following amendments to the Maharashtra Regional and Town Planning Act, 1966.

At the centre of the tug-of-war is ₹4,973 crore being contested by the Mumbai Metropolitan Region Development Authority (MMRDA) and the Brihanmumbai Municipal Corporation (BMC), both developing some of Mumbai’s most ambitious transport projects, from metro rail to mono rail, freeways, sea links and the coastal road.

The money, being demanded by MMRDA, is collected by the BMC as a development charge, a one-time fee levied on new constructions, redevelopment projects, and alterations in projects to fund the upgrading of urban infrastructure, including roads, water supply, sewage systems and public amenities, to support a growing population.

The fee amounts to 1% of the ready reckoner rate for land and the built-up component on new projects. It is part of the premium collected from developers for planning permission and infrastructure development. The BMC has collected the fee since 2010, following an amendment to the MRTP Act.

However, things changed in 2017, when VUTP was introduced and the state government directed the BMC to start transferring the development fee it collected to MMRDA. Over the last three years, the civic body has collected ₹7,998.07 crore via this levy and transferred ₹3,025 crore to MMRDA. It’s the difference – ₹4,973.07 crore – the two agencies are battling over.

An MMRDA official said the pending sum would help fund vital projects such as metro corridors of Metro 2A, Metro 3 and Metro 7, as well as ongoing metro work. “Until 2024-25, MMRDA received just over ₹3,000 crore from the BMC, in 2025-26, no funds were transferred. “Recently, new metro rail corridors were commissioned and more are expected by this year end.”

The official said the BMC collects a minimum ₹ 1,000 crore as development charges and yet it has not kept its commitment to MMRDA. Although MMRDA announced a budget of ₹48,072.57 crore for the current financial year, sources pointed out that 87% of this outlay is dedicated to infrastructure projects, funded with help of global financial institutions and multi-national banks. But it’s usually never enough.

Currently, MMRDA is executing infrastructure projects worth nearly ₹3 lakh crore across the Mumbai Metropolitan Region (MMR) and, recently, Metro 12 (Kalyan-Dombivali-Taloja) was proposed to be added to VUTP.

“There are at least four new metro corridors that will be partially or completely ready for operations by December. Funds are being pumped into these mega infrastructure works,” said another MMRDA official.

The BMC has an equally compelling argument. It points out that building the coastal road doesn’t come cheap. The Versova-Dahisar leg of the Coastal Road North alone is pegged at ₹36,212.60 crore, while the 12-km Goregaon-Mulund Link Road (GMLR), featuring 5-km twin tunnel under the Sanjay Gandhi National Park, is estimated to cost ₹14,905.35 crore.

The civic body has asked the state urban development department to assign these projects VUTP status, so that it can be allotted ₹69,000 crore for these mega-projects. The sum being sought is only that much more than its budget of ₹80,952.56 crore for 2026-27.

According to a senior BMC official, “The amount requested by MMRDA is required for our own projects, which we have urged the government to declare as VUTP. Hence, it will not be possible to transfer the development charges collected by us to MMRDA, at this point,” said a BMC official.

The government is spending money on infrastructure projects, which is burdening the tax-payer, says architect and urban planner, Sulakshana Mahajan. “The government is borrowing more and constructing more metro lines. Simply doing this will burden the exchequer. The government should discourage car users; only then will they switch to the metro rail network. On the other hand, government agencies are building more flyovers and creating public parking lots, which doesn’t serve the purpose,” she said.