With BMC’s revenue and expenses mounting, the country’s richest civic body is looking at ways to increase its sources of income. As part of its budget document on Tuesday, the civic chief Praveen Pardeshi has listed a slew of measures to limit its expenditure and asked departments to chalk out ways to increase revenue.
This is not the first time that the civic body had raised a SOS over its dipping revenue. Municipal commissioner Praveen Pardeshi had issued a circular in September last year, which stated: “The expenditure of the BMC is increasing and revenue is falling. If this continues, the civic body will soon be in a financial crisis. There should be no new recruitment in the BMC department. More and more information technology should be used to reduce manpower. Every department should find a way of increasing revenue. The posts that are not required should not be filled.”
Putting the onus of its falling revenue on government policies, on Tuesday the civic body openly declared that its revenue has declined due to “decision and forces beyond the control of BMC”.
The overall budget estimates of revenue income for the year 2019-20 was Rs. 24983.82 crores, however, for fiscal 2020-21 the civic +9has proposed a budget estimate of Rs. 28448.30 crore for revenue income which is more than 13.87 % increase in comparison to 2019-20 estimates.
The abolition of octroi and slump in real estate has impacted the BMC’s revenue big time. Also, a dip in property tax collection due to slowdown in real estate has impacted BMC’s fortune.
Implementing the state government’s decision to exempt residential units/houses up to carpet area of 500 sq ft from property tax has resulted in a reduction of Rs 335 crore in annual demand. Above this, the wake of a slump in the real estate sector and other markets, the quantum of defaults of payments of property tax has increased and the cumulative outstanding amount has reached around Rs 15,000 crore.
BMC in its budget estimate for 2019-20 had put the revenue figure at Rs 3,453 crore from DP fees and premium. However, they till December 2019, could reach up to Rs 2067.88 crore, they even revised the estimate and it was pegged at Rs 2935 crore, still, the figure is far to reach. The budget estimate for the year 2020-21 is Rs 3879.51 crore.
As per the Development Control and Promotion Regulation (DCPR) 2034, from November 13, 2018, BMC’s share of premium towards grant of fungible Compensatory Area has reduced. Similarly, the share of BMC in premium towards grant of Additional FSI on payment of premium has also reduced.
The outstanding dues from SRA against 25% premium for schemes sanction on BMC land is Rs 618 crore. “The part payment that we were supposed to receive from MHADA and SRA is pending in lieu of development charges and development cess.
Measures listed by BMC to increase revenue income includes:
The civic body has proposed a 5 percent increase in fees for various licenses without tweaking the existing tax structure.Stringent action towards the recovery of pending property tax, The 360-degree Lidar survey- a property mapping system to help revenue collection. DP premiums: Compounding SHASTI (fine) which will include rules like compounding fees of 15 percent of ready reckoner value of unauthorized use of FSI can be levied. The expected rise in revenue due to this policy will be around Rs 600 crores civic officials said. The civic body will also adopt investment policies to increase interest income.
Pardeshi said, “ BMC cannot be reliant on continuation of GST compensation at an increasing rate. It has to come out with innovative resource mobilisation and means to meet its increasing expenditures. Likewise, efforts should be taken by all departments to reduce unwanted revenue and establishment expenditure.
