Known as the country's richest municipal corporation, the Brihanmumbai Municipal Corporation (BMC) has faced a 41 percent loss in its revenue in the first six months of the financial year 2020-21. As a measure to bail it out of this financial crisis, the civic body is now planning to dip into its reserves (in fixed deposits) to withdraw Rs 5000 crore.
As on Dec 31, 2019, reserves of BMC were at Rs. 78,669 cr (including reserves towards committed liabilities).
The civic body this year had set a target estimate of generating a revenue of 28,448.30 crores from various sources including property tax. Of this 28,448.30 crores, the civic body failed to generate revenue estimate of Rs 8,320 crores that it had targeted for the first six months of the financial year.
"Between April 2020 to September 2020 BMC managed to earn a revenue of only Rs 4,905 crore. While, a total of Rs 3,809 crore has been spent on pandemic related expenses and management. We have asked all departments to inform the civc accounts department on their cost cutting strategies and how they are planning to reduce their revenue expenditure." said a senior BMC official.
BMC’s income has taken a hit during the Covid-19-induced lockdown restrictions, as the earnings under several heads such as property and water taxes, development charge etc; have dipped because of the viral outbreak. Its expenditures have also risen by around Rs 600 crore because of Covid-19 relief measures, according to the latest available figure.
In February 2020, the former municipal commissioner Praveen Pardeshi had presented a budget of Rs 33,441 crore for 2020-21, of which Rs 14,647 crore was for development projects. However as the Pandemic hit the city, BMC suffered a huge revenue loss and had estimated that losses will go up to Rs 12,000 crore to 14,000 crore by the end of financial year.
In an attempt to prevent any further financial crisis the civic body during its general body meeting held last month approved a Rs 2,500 crore budgetary cut from its capital expenditure for the financial year 2020-21. Major cuts were approved from the funds allocated to various infrastructure projects in Mumbai such as coastal road, Gargai dam and road works and financial aid to the cash strapped BEST undertaking. Apart from this the civic body had also asked all its departments to slash their revenue expenditure by at least 20 percent.
BMC has also incurred losses from delayed collection of property, water and sewerage taxes during the lockdown period and also a loss of income in the development plan department.