With a massive shortfall in revenue and mounting expenses, the BMC, famously the country’s richest civic body, has been desperately working out ways to increase its sources of income and curtail expenditure.
As part of its budget document presented on Thursday, BMC chief Iqbal Singh Chahal listed a slew of measures to generate revenue and to collect the dues.
According to the budget document, the capital expenditure, which was Rs 5432.24 crore in 2018-19, increased to Rs 8237.13 crore in 2020-21 and is now Rs 16,866.48 crore, a significant rise of 49 per cent. An increase to Rs 22,646.73 crore is estimated in 2022-23. Chahal said the share of capital expenditure is consistently increasing. The expenditure on infrastructure projects has increased twofold.
However, it will not be sustainable unless revenue collection /generation is improved and new sources of revenue are added, he said. The overall budget estimates of the revenue income for 2021-22 was Rs 20,276.33 crore, which is revised to Rs 22,744.87 crore. The budget estimates for 2022-23 for revenue income is proposed to be Rs 23,294.05 crore, almost Rs 3,000 crore more than the estimates of 2021-22. The major sources of revenue for 2022-23 are grant-inaid on account of compensation from the state government in lieu of octroi (Rs 11,429.73 crore), income from property tax (Rs 7,000 crore), income from DP department (Rs3,950 crore), income from interest on investments (Rs 1,128.74 crore), and income from water and sewerage charges (Rs 1,596.93 crore).
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Chahal said the BMC is facing various difficulties due to the Covid-19 pandemic, such as increased expenditure against affected revenue collection. He said, “Tax payers are paying 50 per cent of arrears tax as per court order as final decision is pending in the writ petition against capital valuebased tax system. The drop in property tax collection is temporary and the BMC expects property tax collection to come to normalcy in near future.”
Relief to residential units under 500 sqft
Total 16,14,000 citizens got 100 per cent relief from property tax payment. The amount of exemption to the citizens is to the extent of Rs 62 crore per annum.
Revenue boost from DP department
The revenue from DP department was estimated at Rs 2,000 crore which was revised to Rs 14,750 crore. Thus, there is a huge increase of Rs 12,750 crore.
Revenue income through solid waste
As mandated under SWM Rules, 2016, “All waste generators shall pay a user fee as specified in the bye-laws of local bodies”. Accordingly, the estimated target of annual revenue to BMC will be around Rs 174 crore. Mumbai has over 3,500 hotels that generate close to 300 TPD of wet waste. Most of it is currently transported and processed by the BMC.
Based on the minimum threshold, the estimated target of annual revenue to the BMC from use fee and processing and disposal charges will be around Rs 26 crore.
Pending dues from the state govt
Total outstanding dues from the regional offices of various departments of the state government under the jurisdiction of the BMC amount to 6,768.16 crore till December 31, 2021.
