The BMC is finally making movements towards floating infra bonds to raise a loan of Rs 4,000 crore. The money will be used towards various developmental projects like bridges and storm water drains.
The civic body has been working on the details of the plan with various committee heads and public representatives since January, before finalising it.
The BMC’s income has taken a hit due to Covid-related expenditure. Also, the earnings under several departments like property, water tax, development charge and others have dipped because of the pandemic. In 2020-21, the revenue collection was expected to be Rs 28,448.30 crore. But, in reality the collection declined by Rs 5,876.17 crore. For 2021-22, the revenue collection is expected to be 27,811.57 crore. This estimate is lower than the previous years. The decline in revenue has prompted the BMC to implement its plan to float infra bonds. The BMC faced over 41% loss in revenue in the first six months of the financial year. As a measure to bail itself out of this crisis, in September 2020, it decided to dip into its reserves (in fixed deposits) to withdraw Rs 5,000 crore.So far, BMC has spent over Rs 2,000 crore in fighting Covid. Also, the capital expenditure has been increased by Rs 8,000 crore in the current financial year. Hence, the BMC decided to take an internal loan to meet the low income and high expenses required for development projects. In addition, a fund of Rs 5,876 crore will be raised through internal loans this financial year, a source said.
