Despite the 17 percent higher outlay than the previous year, the civic body doesn’t have any comprehensive plan to increase revenue and it has to draw an additional Rs 10,000 core plus from its fixed deposits; worse, critics say even this low revenue estimate is unachievable
Civic chief Iqbal Singh Chahal and standing committee chairman Yashwant Jadhav at the BMC head office during presentation of the budget. Pics/Bipin Kokate
The Brihanmumbai Municipal Corporation (BMC) unveiled a budget to the tune of Rs 39,038 crore on Wednesday, which is 17 per cent more than the previous year’s Rs 33,441 crore. Though it’s not the first time, this year the size of the budget is about 40 per cent more than the civic body’s revenue income estimation of Rs 27,811 crore. The same estimation for last year was Rs 28,448 crore. The corporation plans to withdraw Rs 10,564 crore from its fixed deposits for it’s projects and the remaining Rs 663 crore will come mostly from grants.
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Civic chief Iqbal Singh Chahal and standing committee chairman Yashwant Jadhav at the BMC head office during presentation of the budget on Wednesday. Pic/Bipin Kokate
The Rs 10,564 crore that the BMC plans to withdraw from its fixed deposits, includes Rs 5,876 crore under the head of internal loan and R4,688 crore under special fund. In 2011-12 when the budget was of Rs 21,096 crore, the actual income was Rs 15,595 crore. In 2016-17 when the budget increased to Rs 37,052 crore, the BMC earned Rs 23,433 crore. In 2017-18 the budget fell to Rs 25,141 crore, which was quite close to the actual income of Rs 24,034 crore.
Income decreases
The revenue income for the financial year 2020-21 was Rs 28,448 crore, which has reduced to Rs 22,572 crore as per revised estimation. The revenue estimate for the financial year 2021-22 is proposed to be Rs 27,811 crore.
In his budget speech, Municipal Commissioner Iqbal Singh Chahal said that the revenue from property tax was estimated to be R6,768 crore in the 2020-21 budget, but it has been revised to Rs 4,500 crore, as the lockdown has adversely affected revenue collection.
Even the revision of capital value has been postponed to minimise the financial burden on citizens. The slowdown in the real estate sector led to a reduction in the assessment of new properties.
The estimated revenue from the Development Plan department has also gone down from R3,879 crore to R1,200 crore. Interest from the FDs has reduced to R975 crore for 2021-22 from an estimated Rs 1,828 crore in 2020-21, as the interest rate is decreasing and also because the BMC withdrew money from its FDs.
Chahal said, “Even though the income from property tax has reduced, it will be recovered in the upcoming year. Even the DP charges may increase as many builders/developers are waiting to pay the premiums once the decision on the cut comes into effect. There is speculation that the corporation is suffering from a huge loss, but the deficit will only be of R400 crore and if the real estate situation changes, BMC will recover the losses in the upcoming year.”
Where will the money come from?
The BMC will be over-dependent on compensation instead of octroi in the upcoming year as well. The income from compensation is expected to be R10,583 crore. The civic body is expecting Rs 7,000 crore from property tax after revision of taxes.
Chahal further said, “An amount of R618 crore towards land premium and R982 crore towards infrastructure development will come from the SRA by this month end.”
The BMC has also made a provision for levying penalty on unauthorised construction, which will be twice the property tax amount. The civic body is also expecting R5,274 crore grant from the state government, out of which Rs 3,630 crore will come from the education department.
The BMC is expecting an additional R140 crore from revision of Scrutiny Fee for granting permission related to fire safety measures. Another R20 crore might come from a fire service fee based on the area of the building as per the Fire Safety Act, 2006.
Prabhakar Shinde, BJP group leader, said, “The BMC’s budget has no connection with reality. The civic body has failed to consider the current income amount and has estimated beyond imagination.”
Election year budgets
Year Size of the budget Actual income
2011-12 Rs 21,096 crore Rs 15,595 crore
2016-17 Rs 37,052 crore Rs 23,433 crore
2021-22 Rs 39,038 crore Rs 28,474 crore (estimation)
Rs 5,274 CR
Grant BMC expects to get from the state government
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