The ideas mentioned in last year’s budget hadn’t yielded much success; current ones include implementing user charges under solid waste management to add Rs 200-crore
Brihanmumbai Municipal Corporation commissioner I S Chahal presents the BMC Budget 2022-23. Pic/Suresh Karkera
The BMC Budget for 2022-23 had a few ideas proposed in it to generate revenue, but going by past experience, it appears this won’t add much to the civic body’s kitty. The BMC unveiled a budget of Rs 45,949.21 crore but still needs funds in thousands of crores.
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Interestingly, the BMC did not collect much revenue from the ideas mentioned in last year’s budget. In fact, pending dues with the state increased from Rs 5,274 crore to Rs 6,768 crore this year. The proposed 200 per cent property tax on unauthorised structures only resulted in Rs 1.45 crore recovery.
Adding to the revenue
This time, there is an idea of user charges under solid waste management, which will add around Rs 200 crore to the revenue. But the bye-laws regarding this have still not been finalised at the department level. The SWM rules 2016 empower local authorities to collect user fees for garbage disposal, but in 2019, the BMC decided not to collect these. Now after three years, as per mention in the budget 2022-23, the draft bye-laws incorporating the user fees are under consideration, and a notification for the same will be published by the government of Maharashtra. Accordingly, the estimated target of annual revenue is around R174 crore and an additional Rs 26 crore is expected from over 3,500 hotels which generate close to 300 tonnes of waste per day.
“The bye-laws are still not finalised at the deputy municipal commissioner level. After they are, they will go to the commissioner. The BMC will discuss the feasibility of levying charges on citizens. If passed, the bye laws will go to Urban Development Department and then be published in a gazette, after which they will be implemented,” said a BMC official.
“The hospitality industry is not being offered any waiver on the statutory charges or any concession on water and electricity dues, but is instead being expected to shell out more during its most trying times. Hotels are already paying Rs 1.3 lakh to R1.5 lakh per establishment on an average towards Trade Refuse Charges (TRC). Such an additional burden is against the principles of ease of doing business,” said Pradeep Shetty, Sr Vice President, Hotel and Restaurant Association of Western India (HRAWI).
How BMC survives
Though the BMC doesn’t have any constant revenue source, more than one-third of the revenue comes from the state government as compensation for Octroi. In the budget 2022-23, Rs 11,430 crore (36 per cent) will come from the Octroi compensation which is a fixed income. Though the remaining two-thirds of income depends upon charges and taxes, the BMC hasn’t been able to complete the target in the past few years and has collected less than 70 per cent of it.
Revenue sources discussed in budget 2021-2022
Penalty of 200 per cent against unauthorised structures: Till January 2022, 393 properties were penalised upto Rs 17.20 crore but only Rs 1.45 crore was recovered.
Pending dues from state govt amounted to Rs 5,274 crore by 2020. By the end of 2021 the outstanding amount rose to Rs 6,768cr. Fire service fee: As per the Maharashtra Fire Prevention Act, 2006, a fire service fee based on the area of the building as to be applicable to housing societies. As per the proposal tabled in the standing committee in July 2021, a one-time fire service fee was to be collected from developers or owners/occupiers or architects of the buildings that came up between March 3, 2014, and June 6, 2021. The proposal was cleared by state govt.
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