For the second consecutive financial year (FY), the BMC is facing a financial crunch due to depleting sources of revenue and increasing expenditure. In the first four months of the FY 2021, the BMC has not been able to recover much from property, water and sewerage tax collections; nor has it done so from its other sources of income.
Last fiscal, the revenue collection was expected to be Rs 28,448.30 crore, but it was just Rs 5,876.17 crore. The BMC had also faced over 41% loss in revenue in the first six months. As a measure to bail itself out of this crisis, in September 2020, it decided to dip into its reserves and withdrew Rs 5,000 crore.
Learning from past experiences, this fiscal, the revenue collection was set at Rs 27,811.57 crores, which is lower than previous years.
However, so far (from April to July), only Rs 7,785.97 crore, which is 28%, of revenue has been collected. As a result, civic administration is staring at a financial crisis and is likely to face major challenges in raising funds for ambitious development projects.
In February, the BMC unveiled a Rs 39,038.83 crore budget for this financial year. However, during the budget session, the civic body had said that its revenue collection declined due to “the measures taken to combat Covid and provide relief measures for the affected”. It said its property tax collection was “adversely affected” due to the pandemic.
“We suffered financial hiccups last year as well and had implemented various measures. However, work did not stop, this is not to be forgotten. Despite major challenges posed in property tax collection due to the pandemic last year, we collected Rs 5,135 crore between April 2020 and March 2021, as against the target of Rs 5,200. This year, too, we will manage to battle it out and sail through,” said a senior BMC official.
