Mumbai: As lockdown hits revenues, BMC to opt for cost-cutting measures

A shortfall in revenue has forced the Brihanmumbai Municipal Corporation (BMC) to opt for cost-cutting measures. In an attempt to prevent further financial crisis, the civic body, at its general body meeting held on August 20, approved a Rs 2,500 crore cut from its capital expenditure for the financial year 2020-21.

At the meeting last Thursday, Mumbai Mayor Kishori Pednekar approved budget cuts for several big-ticket projects, apart from a few other budgetary allocations made previously -- Rs 500 crore has been slashed from the 9.98-km coastal road project, Rs 440 crore from the Gargai-Pinjal dam project, the Rs 223 crore budgetary allocation sanctioned for roads department and the Rs 500 crore financial aid / funds promised to the Brihanmumbai Electricity Supply and Transport (BEST) undertakings.

The civic body had made a budgetary allocation of Rs 2,000 crore for the coastal road project, Rs 503.53 crore for the Gargai dam project and Rs 1,600 crore for road repair works for 2020-21.
Other cuts included Rs 43 crore from the footpath improvement funds, for which Rs 50 crore had been allotted, Rs 48 crore from the project for construction of the missing links as mentioned in Development Plan 2034, and Rs 100 crore from key waste management projects related to dumping grounds and debris recycling plants.
The BMC is having a tough time achieving a revenue target of Rs 28,448 crore set for the FY 2020-21, with officials claiming that the civic body is staring at a shortfall of close to Rs 14,000 crore.

Civic officials however said, the increase in funds for corporators has also impacted many development projects, as this year there was a hike of about Rs 200 crore for corporator funds as compared to last year. A total of Rs 728 crore in funds for all parties was approved at the meeting last week.
"Cost cutting was approved at the general body meeting, as we are all aware that the pandemic has heavily dented the civic body's pocket, and we have suffered revenue losses. There are over 50 proposals pending before the standing committee. The working of the civic body has been hit by the pandemic-induced lockdown and most of the resources have been diverted to pandemic-related work. Hopefully things will be back on track by September," said Ravi Raja, leader of the Opposition in BMC.

According to civic officials, the budget cuts will not have much effect on big-ticket infrastructure projects like the coastal road and Gargai dam. However, funds for public utility projects like footpath improvement, concretisation of roads, beautification of Bandra fort, replacement and repair of pipelines and improvement of drainage will all be hit by this cost-cutting exercise.
In February 2020, 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 struck the city, the BMC suffered a huge revenue loss of over Rs 1,000 crore in the last five months and has estimated that this number will go up by Rs 12,000 crore-14,000 crore by the end of financial year.