Civic body was supposed to withdraw part amount for projects, but many didn’t take off
The BMC’s fixed deposits make it the richest civic body in the country. File pic
The Brihanmumbai Municipal Corporation (BMC) announced last year that it would withdraw Rs 18,746 crore from fixed deposits (FDs) above the regular income to meet its demand for funds in the financial year 2023-24. However, despite the announcement of projects worth thousands of crores, the FDs of the civic body were unaffected in the last nine months. The reason being several big-ticket projects haven’t taken off and heavy deposits on account of a few projects added to the BMC kitty along with traditional sources of income.
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BMC’s FDs have always enjoyed the spotlight, making it the richest civic corporation in the country. Last year, the BMC announced a budget of R52,619 crore which included Rs 18,746 crore that would be withdrawn from FDs. This means the BMC was supposed to use the amount from FDs over and above the income from the other revenue sources. Now, with the upcoming budget, questions are once again being raised on the status of FDs. At the end of March 2023, the BMC’s FDs amounted to Rs 86,401 crore and after nine months—at the end of December—the civic body had almost the same amount in FDs, at Rs 86,490 crore.
“The proposal to withdraw FDs was for big infrastructure projects which were supposed to take shape in the financial year. These include a sewage treatment plant, the Goregaon-Mulund Link Road tunnel, cement concrete roads, etc. But the amount wasn’t utilised as the projects are still in need of environmental clearance which is a long process. There were also other factors which were not in our control,” said a senior civic official. He added that the BMC also received heavy deposits from contractors of a few big-ticket projects which were added to the FDs. The heavy deposits are also considered a regular income for the civic body. “The surplus amount was kept in FDs and this is only a way for the civic body to manage expenses of big projects. What is the use of FD if it is not used to provide world-class services like the coastal road, GMLR, Versova-Dahisar coastal road or sewage treatment plants to citizens?” said Iqbal Singh Chahal, municipal commissioner of Mumbai.
Though the civic body has Rs 86,000 crore in FDs, it needs Rs 1.75 lakh crore for infrastructure projects which were announced in the last few years and Rs 40,000 crore for pensions. Chahal said these projects need several years to complete and the corporation can collect revenue for it in upcoming years. BMC’s FDs saw a massive jump in 2021-22 when the state government slashed the premium of buildings by 50 per cent. The corporation had earned Rs 14,500 crore, much more than the estimated Rs 2,000 crore through development premiums, increasing its FD amount to Rs 91,690 crore. However, in the absence of a sustained income source and amid big-ticket projects like coastal roads and the concreting of roads, the FDs shrank in the next year.
Rs 18,746 CR
Amount BMC was to withdraw from fixed deposits
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