BMC presents budget of Rs 27,258 crore, 8.42 per cent higher than current fiscal outlay
For the second consecutive year, Ajoy Mehta steered clear of announcing inflated outlays. Ganesh Shirsekar For the second consecutive year, Ajoy Mehta steered clear of announcing inflated outlays. Ganesh Shirsekar
Promising to focus on efficient resource allocation for Mumbai’s growing needs, including adequate capital expenditure on critical infrastructure projects, Mumbai Municipal Commissioner Ajoy Mehta for the second consecutive year steered clear of announcing inflated outlays as he presented the Brihanmumbai Municipal Corporation’s annual budget estimates for 2018-19. Staying on track of reforms in financial management initiated in his last budget speech, Mehta presented annual budget estimates of Rs 27,258.07 crore, an 8.42 per cent rise over last year’s outlays and an increase entirely on account of increased capital expenditure proposed for the coming year.
The 145-year-old BMC’s first budget estimates since the implementation of goods and services tax (GST) saw a significant first — the proposed increased capital expenditure would have to be met by withdrawing funds from the special reserve funds of the BMC, the commissioner said. Mehta proposed to withdraw Rs 2,743.96 crore from these reserve funds for 2018-19. Presenting his budget estimates for 2017-18, slashing total outlays from the previous year’s Rs 37,025 crore by around Rs 12,000 crore or nearly one third, Mehta had said smaller overall estimates would not mean the corporation would curtail actual spending. On Friday, Mehta said the trend of humongous budget estimates and poor capital expenditure had now been reversed.
“The capital expenditure for 2018-19 is expected to be Rs 6,111.07 crore, a huge rise of Rs 2,260 crore from the previous year, or 58.71 per cent,” Mehta said. Stating that the reforms initiated last year had borne results and that those principles would continue to guide municipal planning for the coming year, Mehta proposed capital expenditure worth Rs 9,527.80 crore for 2018-19. That is a proposed 55 per cent increase in proposed capital expenditure compared to the current year’s revised estimates.
As much as 29 per cent of the anticipated capital receipts will come from withdrawals from special funds or reserve funds. Mehta reiterated, word for word, a cautionary note from last year’s speech: “Even as BMC has adequate reserves to implement its projects, there is no scope for financial profligacy.” As big-ticket projects kick off this year, alongside withdrawals from the reserves, these would decline, he added.
Explaining why the corporation would have to dip into these funds, Mehta pointed out that while the introduction of GST and the abolition of Octroi had not affected the BMC’s finances owing to compensation from the state government to the BMC, revenue income was now primarily dependent on the growth of the real estate sector. “Whereas compensation in lieu of octroi will steadily grow at 8 per cent per year, the effects of the slowdown in the real estate sector are beginning to show,” he said.
Revenues from the Development Plan department, especially through fungible FSI, premiums paid by builders for staircases and lifts, other infrastructure charges payable to the BMC for development in MHADA layouts or other redevelopment projects have all registered a slide. This income, from the Development Plan department, was estimated to be Rs 4,997.43 crore in the 2017-2018 budget estimates, but have now been revised to Rs 3,947.38 crore.
Once again, the commissioner proposed no increase in taxation, but proposed to revise some fees imposed by the municipality, including for medical treatment at municipal hospitals, factory permit charges, licence fees for wholesale markets, and others. Mehta justified the move as being effected with a view to increase revenue from other sources. There will be a 20 per cent hike in charges for Mumbaikars and a 30 per cent hike for patients from outside Mumbai.
Income from property tax collections has also been revised to Rs 4,958.25 crore as against the budget estimates of Rs 5,205.03 crore for 2017-18. But the coming year’s collections would be boosted by resolution of ‘deviations’ detected through the new Integrated Property Valuation System. The BMC has pegged estimated property tax collections for 2018-19 at Rs 5,206.15 crore. In addition, the BMC is proposing to now send property tax bills to citizens’ e-mail IDs.
Not surprisingly, the Shiv Sena’s proposed abolition of property tax for all Mumbaikars occupying flats of up to 500 sq foot found no mention in Mehta’s speech. The big thrust for the coming year in terms of visible development would be on completion of the Coastal Road, now under tendering, and the implementation of the proposed new Development Plan 2014-2034. While a budget provision of Rs 1,500 crore has been made for the Coastal Road, Mehta proposed to allocate Rs 2,665.37 crore for DP implementation, through which works on new amenities including open spaces, transportation services, solid waste management infrastructure, etc will be undertaken.
While the expected expenditure in 2017-18 for Development Plan (DP) implementation is Rs 752.21 crore, the allocation for 2018-19 is a 254 per cent increase. Meanwhile, revenue expenditures or establishment costs have been reduced to Rs 15,866.07 crore in 2017-18, as opposed to Rs 16,055.20 crore in 2016-17. That is a fall of 1.18 per cent, compared to an average annual rise of 10.80 per cent in previous years. For 2018-19, the budgetary provision for revenue expenditure is Rs 17,723.25 crore, to cover fixed components such as salary and for the hiring of new doctors, nurses and firemen.
Besides, the civic body has proposed to set up a state-level capacity building centre for all urban local bodies. Apart from in-house training, the institution will offer courses and consultancy services to other urban local bodies. Also, in the wake of the Kamala Mill fire, the civic body has proposed a separate Fire Safety Compliance Cell with 70 posts of station officers and 35 posts of firemen. Besides, it has proposed an IT-based ‘Building Inspection System’ for the inspecting officers to monitor the compliance of fire safety norms in buildings on a regular basis.
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