The Brihanmumbai Municipal Corporation's (BMC) finances have improved, prompting it to present a budget outlay of 17.7% more than last year’s, at ₹45,949.21 crore. However, the Mumbai civic still needs to internally raise around 17,000 crore to meet its capital expenditure demands or for the upkeep and up-gradation of development projects.
Even as the BMC chief Iqbal Singh Chahal claimed that the process of taking an internal loan is just a formality, the move has been fiercely opposed by the members of the standing committee.
The BMC in the Budget 2022-23 has shown a substantial increase in capital expenditure. The funds sanctioned towards capital works and development projects is 49.28 per cent of the total budget outlay. The increased capital outlay now pegged at ₹22,646.73 crore. This comes even as only 56.77% of the capital budget outlay of ₹18,750.99 crore revised to ₹16,866.48 crore in 2021 has been utilised till January. The Revenue expenditure for 2022 is pegged at ₹23,294.05 crore.
Of this total requirement for the upkeep and up-gradation of development and infrastructure projects ₹5,840 crore will be withdrawn from its civic body's reserves for the Coastal Road and Goregaon Mulund Link Road projects another ₹3,866.28 crore will be withdrawn towards the capital and revenue expenditure, including employee pensions. Whereas ₹4,998 crore is being taken as an internal loan as announced by Chahal during the budget of 2021-22.
However, Chahal said, that despite challenging times due to the COVID-19 pandemic that hit the civic body's revenue hard, its finances have improved tremendously.
"Due to 50 per cent reduction in premiums charged on building proposals between March 21 & December 21, BMC has a windfall of nearly Rs 14000 Crores additional income in last 11 months(due to increase in volumes wherein 2860 new construction projects got approved-most of which were non-viable with full premiums), resulting in an unprecedented jump in BMC reserves from ₹78000 Crores to nearly ₹93000 Crore now. It is a real win-win situation, where the real estate sector(the backbone of Mumbai) is on the fast track now,(despite the last 2 years of a covid pandemic), resulting in a tremendous boost in employment in this sector for the next three years at least," Chahal said.
About the need for internal loans, Chahal added, "The amount in the civic reserves are already linked to infrastructure and development projects, we are using the money for the same. The internal loan is just a formality and is an annual feature."
