Mumbai: BMC collected less than 40 per cent income due to COVID-19 last year

Though the administration has said Rs 1,700 crore was spent on tackling COVID-19, corporators claimed it is much more

The Brihanmumbai Municipal Corporation’s (BMC) budget for 2021-2022 will be presented on February 3. The last year was tough due to the COVID-19 pandemic for the BMC, and of its estimated income, it managed to collect less than 40 per cent. However, its interest on FDs and compensation in the form of GST helped it sail through.

Though the administration has said Rs 1,700 crore was spent on tackling COVID-19, corporators claimed it is much more. The real sum will also include indirect losses as the pandemic shrunk reliable income sources of the corporation. While the corporators also claim the administration is clueless about the new earning sources, the officers are looking to recover past dues of property tax and water/sewerage charges with stringent action, service charges on slums, tax from small houses, etc. The BMC is unlikely to hike direct taxes on citizens due to the upcoming civic election.

Earnings shrunk
The BMC budget for 2020-21 was Rs 33,441 crore. It earned Rs 11,616 crore till December 2020 but the total expenditure on project and administration was Rs 18,693 crore. Some of the extra expenses were settled with the reserve funds. If the corporation doesn’t improve the earnings till March, it will have to break more FDs.

As per the budget, the estimated income of the BMC is Rs 28,000 crore. The BMC could collect only Rs 11,000 crore till December. The FDs have shrunk by Rs 2,455 crore in the past nine months. Even interest of Rs 1,000 crore from FDs was used.

“The administration said the expenses were due to the pandemic. They sent proposals worth R1,665 crore to the standing committee and took permission for an additional Rs 400 crore till March 2021 for the capital expenditure of COVID. Other than that there is Rs 3,200 crore expenditure shown under operation and maintenance which includes COVID. Perhaps there are expenses under the Health and Solid Waste Management departments too. But the real expense on COVID-19 is still unknown,” said Prabhakar Shinde, group leader of the Bharatiya Janata Party in the BMC.

“Despite being asked by the standing committee members in every meeting since the last week of October, the administration hasn’t given the details of expenditure on COVID yet,” said Rais Shaikh, group leader of the Samajwadi Party.

COVID-19 expenses
The Jumbo COVID Centres were built by MMRDA, CIDCO and Metro, and BMC didn’t paid for them. “The COVID-19 pandemic expenses are around Rs 1,700 crore, mostly treated as revenue (administrative) expenditure which includes provided infrastructure like beds, trollies, wheel chairs, medicines, sanitisers, food, etc,” said P Velarasu, additional commissioner of the BMC.

However, this is only the direct cost of COVID. The indirect loss of revenue is also in the incurred cost. It not only affected revenue from service charges like property tax, water/sewer charges but reduced charges from infrastructure development. Out of R16,000 crore expected from these earnings the BMC collected only R3,200 crore till the end of December which is merely 20 per cent (ideally it should be 75 per cent). Even after rolling out schemes for water, sewer bills, there is a lukewarm response from citizens who lost their earnings in the pandemic. But despite the diminishing earnings, the BMC got a helping hand through compensation in the form of GST. “The BMC gets R816 crore per month from the state as compensation and till the end of December it received a whopping R7,339 crore which is more than double than the earnings from other sources. In addition to that R1,000 crore was added to the kitty through the interest on FDs,” said a BMC official.

Pending dues
There are also more than Rs 15,000 crore dues pending in property tax. The BMC can earn R500 crore to R800 crore by levying property tax/ service charges on slums and small houses henceforth. “The move to give paid service in civic-run hospitals can ease the burden on the health department where the BMC spends over R3,000 crore annually. Though there is strong opposition from citizens the corporation may give gardens on adoption policy. But as there are upcoming elections there may not be an increase in direct taxes,” said an official. Though the BMC managed somehow this year, it will be a major task to manage financial goals and work in the next year.

The budget, revenue and expenditure
>> Budget 2020-21: Rs 33,441 crore
>> Estimated revenue till March 2021: Rs 28,448 crore
>> Estimated income from reserve fund/subsidies: Rs 4,993 crore
>> Income till December: Rs 11,616 crore
>> Capital (project) expenses till December: Rs 5,745 crore
>> Revenue (administration) expenses till December: Rs 12,948 crore

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