Why does BMC need ₹78,000 cr in FDs, asks CM

Fadnavis, who presented his argument in the state legislative assembly on Wednesday, said the BMC earns only 3-4% interest on term deposits, while inflation is about 7%. In effect, the value of those deposits declines nearly 4% every year, he said

MUMBAI: Reviving an issue from the BJP’s civic election playbook, chief minister Devendra Fadnavis has said the BMC should deploy its vast financial reserves for infrastructure development rather than let them lie in low-yield fixed deposits (FDs). The Brihanmumbai Municipal Corporation (BMC), the country’s wealthiest municipality, currently has ₹78,000 crore in FDs.

Mumbai, India – 08 July 2026: Maharashtra CM Devendra Fadnavis arrived at Vidhan Bhavan during the Maharashtra Monsoon Assembly Session, in Mumbai, India, on Wednesday, 08 July 2026. (Photo by Bhushan Koyande/HT Photo)

Fadnavis, who presented his argument in the state legislative assembly on Wednesday, said the BMC earns only 3-4% interest on term deposits, while inflation is about 7%. In effect, the value of those deposits declines nearly 4% every year, he said.

If the same money is invested in infrastructure projects, the returns would be significantly higher, Fadnavis argued, adding that he had adopted this approach with the Mumbai Metropolitan Region Development Authority (MMRDA) when he became chief minister.

“When you invest in infrastructure, the returns are typically in the range of 12% to 15%. Instead of earning just 3% on bank deposits, you generate substantially higher returns while also creating long-term public assets and amenities,” he insisted.

“There is a lot of discussion about maintaining deposits, but the real question is, to what extent? Earlier, we had a sinking fund for the repair of old buildings. Similarly, the BMC should retain only a certain sum in deposits and invest the remaining funds,” said Fadnavis.

His remarks come amid a controversy over the BMC drawing on its FDs to finance the ambitious Coastal Road project that connects Marine Lines and Bandra.

The issue also surfaced in January 2020, when prime minister Narendra Modi asked why the BMC was investing large sums in banks rather than spending it on public infrastructure. Modi argued that the money should be used for the benefit of Mumbai’s citizens.

On Wednesday, Fadnavis asked, “What is the purpose of maintaining deposits if they are never used? When people need infrastructure and lives are at stake, boasting about the size of deposits serves no purpose. Those funds are meant to be deployed for public works and to create assets for citizens.”

The chief minister also dismissed the opposition’s claims that the BMC’s reserves had depleted. “I want to make it clear that there has been no depletion of the BMC’s deposits. In 2017, they were ₹62,000 crore. They rose to ₹72,000 crore in 2018, ₹76,000 crore in 2019, ₹79,000 crore in 2020, and were ₹78,000 crore in 2021. As of June 2026, the deposits continue to stand at around ₹78,000 crore,” he said.

He said the deposits had risen to ₹91,000 crore in March 2022 and ₹86,000 crore in March 2023 because the state government had reduced various premiums for about 18 months during the Covid-19 pandemic, encouraging citizens and developers to make advance payments.