Civic chief IS Chahal speaks on the financial challenges faced by the BMC
Iqbal Singh Chahal
The BMC does not gave a major source of income and the expenditure is being done from loans. Is it a bad sign for the corporation?
We have a surplus amount this year due to major revenue through premiums under the Development Plans, which is expected to be Rs 14,750 crore by March end. We kept it in fixed deposits this year which increased our FDs from Rs 80,000 crore to Rs 87,000 crore within a year. We received Rs 1,205 crore on interest on these FDs, more than what we had estimated, Rs 905 crore. We are taking internal loans from these FD’s.
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The premium revenue increased by giving a concession of 50 per cent. Is it not a loss to the BMC?
There are several development projects which were non-viable due to huge premiums. The state government gave a push to such projects by cutting charges by 50 per cent. If the concession was not given, the projects would have not started and the BMC would not have got the revenue even in the future.
Are you looking for any other sources of revenue in the coming year?
The BMC has done a commendable job in tackling the Covid-19 pandemic. In the second wave between February and May 2021, 3.93 lakh cases were reported out of which 3,484 lost their lives. The fatality rate was 0.8 per cent. It is probably the lowest fatality rate in any part of the world. Even during the third wave, from December 21 to February 2, 2.73 lakh cases were reported and 275 deaths were registered. The corporation spent Rs 3,382 crore on tackling the pandemic. A claim of Rs 1417.32 crore and Rs 1347.56 crore was submitted to the Mumbai City District and Mumbai Suburban District respectively for reimbursement from the State Disaster Response Fund (SDRF).
But even the revenue expenditure (on salaries, etc.) increased.
The expenditure on operation and maintenance has been consistently increasing. It is mainly because expenditure was incurred for betterment of services provided by BMC. But the share of capital expenditure is consistently increasing year by year. In 2016-17, 19 per cent of the total budget was allocated for capital expenditure. In 2021-22, 42 per cent of the total revenue was set aside for project work and we proposed 49 per cent of the amount in 2022-23.
It looks like a political budget before the BMC elections.
The main focus of the budget is on health, infrastructure and education. We allocated Rs 6,933.75 crore for health which is 15 per cent of the total budget. No city or state government has allocated so much on health. We emphasised on two main schemes—Hinduhridaysamrat Balasaheb Thackeray Health Centres which provide preventive and primary treatment facility to citizens close to their residence and Shiv Yog Kendra for preventive measures.
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