On Friday, Municipal Commissioner of Mumbai, Ajoy Mehta presented the Brihanmumbai Municipal Corporation (BMC) budget of Rs 30,000 crore. The budget of the richest Municipal Corporation of Asia is widely known for its comparison to the budgets of smaller states of the country. The estimated expenditure of Mumbai is almost double of Goa and more than that of the GDPs of many North Eastern states like Meghalaya, Sikkim, Nagaland or Arunachal Pradesh.
Interestingly, the role of the Mayor of Mumbai is ceremonial and the executive power is vested in the commissioner. The urban local body takes care of the sewage system, the school divisions, power companies, roads, and other aspects of local infrastructure in the city. The Brihanmumbai Electricity Supply and Transport (BEST) and Mumbai Fire Brigade are autonomous organizations under BMC.
The municipal body presented its highest ever budget of 37,052 crore rupees in 2016-17 but it was reduced to 25,141 crore rupees to have a more ‘realistic’ approach. Earlier, it had become a norm to inflate the budget by showing high capital spending. But the capital expenditure could not materialize and at the end of the year, total spending remained somewhere between 20 to 40 percent. Thus, Ajoy Mehta slashed the budget and included only those projects which can get materialized in the budgeted expenditure.
The MNC budget crossed 30,000 crore rupees for the fourth time with an expected expenditure of 30,686 crore rupees in FY 20. The Capital expenditure target which was slashed considerably in achieving a ‘realistic’ approach of 2016-17 was again increased by 11,480 crore rupees. Revenue expenditure will take a major toll on the spending of BMC and is expected to increase by 22 percent to reach 19,206 crore rupees in 2019-20.
As per a research by the rating agency, CARE, the major sources of income for the BMC are Goods and Service Tax compensation, property tax receipts, water and sewerage charges, receipts from the sale of extra floor space to developers and investments account. BMC expects to earn more than 9,000 crore rupees from GST compensation itself. The municipal body used to charge ‘octroi’ before the implementation of GST. Moreover, Property Tax is another major source of income for BMC and it aims more than 5,000 crore rupees for FY 2020. Another 3,454 crore rupees will come from the allocation of the Mumbai Development Plan, 2034.
The capital expenditure in Mumbai is 24,985 crore rupees of which almost half is to be kept aside for payments of salaries and pensions of almost 1 lakh BMC employees. Apart from this, the major portion of capital expenditure of BMC will be allocated to the coastal road project, traffic operations, water supply, sewage disposal, solid waste management, and health spending. “Since the work on Coastal Road Project has been started, we will increase the provision from the Rs 1,500 crore allotted last year. Budgetary provision for Goregaon-Mulund Link Road is also expected to increase, as only one more clearance is needed, which is expected by this month. Besides, the MSDP projects that require over Rs 15,000 crore and two water supply tunnels (Chembur to Parel and Chembur to Trombay), which need more than Rs 2000 crore, are also likely to increase the budgetary provision as contracts to carry out the work have been awarded,” said a BMC official. “The health budget will be increased from last year’s Rs 3,636 crore. Other projects like cycling track, Powai to Veravali water supply tunnel, procurement of new fire fighting equipments, Mithi River Rejuvenation, reconstruction of hospitals may also see rise in budget allocation,” he added.
BMC is the richest municipal corporation in the country with revenue receipt of 24,984 crore rupees. Interestingly, it is six times greater than the Pune Municipal Corporation which is the second richest MNC in India. The Pune Municipal Corporation has a revenue of 4,023 crore rupees while the New Delhi Municipal corporation gets revenue of 3,572 crore rupees.
Although, the BMC is not as self-reliant as Pune Municipal Corporation and New Delhi Municipal Corporation with both the MNCs generating 91 and 92 percent of spending through revenue consecutively. On the other hand, the BMC gets only 62 percent revenue of its spending.
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