Brihanmumbai Municipal Corporation
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Contents |
Controversies
State-wise "study-tours"/ 2015-16
The Times of India, Jan 29 2016
J&K, Andamans: Seats of learning for some
VijayV Singh
In December 2015, 15 members of the improvement committee went to Jammu and Kashmir to interact with the civic administration there, besides visiting Pahalgam, a popular tourist destination.
While citizens and activists have criticised the expenditure on the Andaman tour, there is another trip planned for February 2 to Sikkim, by members of the health committee. The purpose of the trip has reportedly been stated as `study of the up graded health facilities in Gangtok'. However, experts said when Mumbai has among the best medical facilities in the country , the corporators are clearly going there on a personal trip under the pretext of a study tour.
“We are fighting for basic things in the city , but instead of addressing these issues corporators are going on a picnic under the pretext of a study tour. They can go on such tours after taking leave, but should not mislead the people.We have best the medical facilities here and there is no need to go Gangtok. The corporators should rather focus on improving the quality of treatment in BMC-run hospitals in the city,“ said filmmaker and activist Ashok Pandit. Later, on February 8, corporators from the BMC's law committee has a trip planned to Kochi to `study the revenue models of the city's municipal corporation'. On the agenda are repportedly revenues from advertisement, property taxes and the legal process.
11 corporators from the standing committee, 22 from the works committee, along with the mayor, had gone on four-day trip to the Andaman and Nicobar Islands to `study their water storing facilities and drainage system'. The trip was planned at the last minute and the BMC shelled out high charges for air tickets and hotel booking. Some senior corporators, except the Shiv Sena, opted out of the tour to avoid controversy.
Finances
The cash stash, as in 2022-23
Bhavika Jain, February 5, 2023: The Times of India
The cash stash
The BMC has a budget of nearly Rs 46,000 crore and has Rs 88,304 crore in FDs scattered across multiple banks. These FD's fetch the civic body an average of 5.5% interest a year; there are some FDs that have a longer tenure and fetch an interest of 7.5%. Although the cash pile may look huge on paper, senior BMC officials who understand BMC finances say that it would be wrong to say that all that money is parked in the bank.
According to a recent financial statement sourced by TOI+ from the BMC, of the total Rs 88,304 crore, Rs 20,254 crore has been earmarked towards human resources management like payment of pension, gratuity and provident fund.
Deposits amounting to Rs 16,902 crore belong to contractors who are engaged in civic works and they have to be refunded after completion of work.
"Funds under these two categories cannot be touched for any other purpose as it has to be eventually paid to the rightful beneficiary," says a senior civic official. He said that there are nearly 1.5 lakh pensioners that the BMC services and a huge chunk of gratuity amount is required to be paid to all those retiring. Now, this leaves the BMC with deposits worth Rs 51,148 crore of which Rs 40,871 crore are tied to different infrastructure plans such as the coastal road project, sewage treatment plant project and the Goregaon-Mulund Link Road project.
An official said that these funds were also used during the Covid-19 emergency. After assigning funds towards these works, the BMC is left with only Rs 10,276 crore as surplus or 'unassigned fund'.
"For a civic body of this scale having Rs 10,000 crore in surplus deposits is not a big deal and is a sign of financial independence," says another official.
The cash pipeline
Remember that Mumbai is India’s commercial capital. One of BMC’s biggest sources of revenue used to be octroi–tax paid by businesses for bringing commercial goods into the city as well as taking them out.
Mumbai used to earn little under Rs 10,000 crore in octroi. When the Union government brought in GST, octroi became defunct. Now the corporation gets a similar amount in grant-in-lieu-of-octroi.
The second biggest earner for BMC is property tax. It brings in more than Rs 7,000 crore a year. The next big source of revenue is the fees earned for approving development projects which is Rs 2,000 crore followed by Rs 1,500 crore towards water and sewage charges.
Just like any other government body, the financial status of the BMC was not always this healthy and so the FDs that have been collected over the years helped it tide over the bad weather years. About 20 years ago, the BMC had a near-financial emergency when it went into deficit of Rs 645 crore and it had dipped into the contractors’ deposits to run the city. A new financial plan and increase in taxes brought the corporation back to a surplus balance sheet in 2-3 years.
What to fund?
Former municipal commissioners and veteran bureaucrats said that the decision on how much amount should be left unassigned to any project should be left to the municipal commissioner and the chief accountant.
"The BMC is a complex civic body and emergency funds can be required anytime. There are many civic infrastructure projects that help boost BMC revenues such as water supply or better roads and bridges and so funds should be assigned to such projects," says former municipal commissioner DM Sukhthankar.
"There is a need to realise that the huge deposits that the BMC has were not built overnight and it is a sign of financial prudence by several commissioners. Their foresight and policies have boosted the income stream of the BMC," says an official.
Another senior civic official says that the deposits are only going to reduce as the BMC is now using them to build development projects such as the coastal road. "The BMC has not sought a loan for these projects and is executing it by taking an internal loan against the FDs. The deposits are only going to shrink unless the revenue grows at a much higher rate than the expenditure," he says.
For instance, the total FDs a year ago were amounting to Rs 92,363 crore which declined to Rs 88,304 crore as on date, which means that over Rs 4,000 crore have been used for projects in a year.
Political slugfest
In his speech in Mumbai, Modi made a reference to the “money that is being kept in banks instead of being used for the city’s development”. In saying so he was echoing the demands of several political parties, including his own and that of the Shinde faction of the Shiv Sena, that the BMC’s FDs should be used for various city projects.
Thackeray hit out at his former ally by saying that the BJP is eyeing the hard-earned money of Mumbaikars. He said that the BJP is after Mumbai as it thinks of Mumbai as a goose that lays golden eggs.
He said "The money is not lying idle, It’s for development work; 30-40% of the money does not belong to BMC.”
Nationalist Congress Party’s Supriya Sule also questioned Modi's statement and said why should the FDs of the BMC be encashed. She said that if the Centre has enough funds then why is it eyeing BMC money.
What Rs 88,000 crore is worth
1. Can fund three Dharavi Redevelopment Projects. The cost of the project is estimated to be Rs 26,000 crore
2. Enough to buy all of the government's stake in four PSUs – Bharat Petroleum, Shipping Corporation of India, Container Corporation of India and BEML (previously Bharat Earth Movers Limited).
3. Rs 88,000 crore is the budget allocation to fund women specific schemes for the whole country
4. Twice the value of higher education budget allocation of the whole country
5. Twice the value of infrastructure projects sanctioned for Arunachal Pradesh
