With ₹70,000 crore in BMC’s reserves, Mumbai continues to battle bad roads, flooded drains
Part of the cash pile will be used to fund mega projects instead such as Coastal Road and Goregaon-Mulund Link Road.mumbai Updated: Jan 20, 2018 13:07 IST
Even as Mumbaiites lost their lives to open manholes, potholes and fires in 2017, the Brihanmumbai Municipal Corporation (BMC) is sitting on Rs70,000 crore in deposits.
Part of the cash pile will be used to fund mega projects instead such as Coastal Road and Goregaon-Mulund Link Road.
The BMC earned close to Rs10,000 crore in interests and other revenues last year.
Despite losing money after octroi, its biggest source of income, was scrapped owing to rollout of the Goods and Services Tax (GST), the BMC’s revenue has grown. The BMC’s massive fixed deposits parked in more than 30 nationalised banks earn it Rs2,000 crore to Rs4,000 crore in interests annually.
But, there has been little evidence that the country’s richest civic body is using the money to make people’s life comfortable.
The ongoing road and desilting scams have shown that Mumbai can never compete with other global metros vis-a-vis infrastructure, say experts.
James John, coordinator with NGO AGNI, said, “Though the BMC has managed to earn huge interests, it has failed to utilise the amount for basic civic facilities. What is the use of having such huge deposits when the city continues to deal with bad roads, poor civic hospitals, unattended garbage, contaminated water and so on? The deposits have a provision for infrastructure projects; however, the crumbling infrastructure and lax supervision say it all.”
The cash pile includes money earmarked for infrastructure projects, besides provident and pension funds of municipal employees as well as earnest money deposits taken from contractors. For instance, Rs18, 916 crore was reserved for the employee funds last year.
Civic chief Ajoy Mehta said, “Our revenue is around Rs24, 000 crore. From the reserves, we have Rs8,000 crore to Rs10,000 crore which adds up to our annual budget of nearly Rs35,000 crore. We withdraw adequate amount for infrastructure projects in accordance with the fund allocated.”
A senior official from the finance department said, “Once the amount to be used for infrastructure projects is budgeted, it first gets sanctioned by the standing committee and then the corporation. So, we use these funds for infrastructure.”
The fixed deposits are generally reserved for various funds; namely, Infrastructure Development Fund, Roads and Bridges Construction and Development Fund, Land Acquisition and Development Fund, Asset Replacement and Rehabilitation Fund. They are also used to meet liabilities such as pension funds.
Godfrey Pimenta, citizen activist, said, “Despite such huge deposits, the promise made by political leaders to exempt the property tax for flats having an area below 500 square feet has not been fulfilled. The civic body expects citizens to pay their taxes, but does not want to utilise them to improvise basic civic amenities. They just want to increase their amount of fixed deposits to sustain their title of the richest corporation in the country.”
The state government pays the BMC Rs7,200 crore annually as compensation for the loss of octroi. The state has agreed to pay this annual amount at the growth of 8% per annum that the civic body would have collected through octroi.