Staring at Rs 14,000-crore shortfall, BMC proposes 10% cut in overall budget

Staring at Rs 14,000-crore shortfall, BMC proposes 10% cut in overall budget


Written by Laxman Singh
| Mumbai |

Published: July 31, 2020 3:00:20 am





bmc, bmc budget, bmc budget shortfall, bmc budget cut, indian express news Opposition leader in the BMC, Ravi Raja said revenues from property tax and premiums from building construction, which were major sources of income, had recorded massive dip. (File)

THE BMC will face a tough time attaining its revenue target of Rs 28,448 crore set for the financial year 2020-21 as officials have claimed that the civic body was staring at a shortfall of close to Rs 14,000 crore. Looking at the shortfall, the civic body has now proposed a 10 per cent cut in overall budget estimates.

The BMC has so far incurred about Rs 4,000 crore shortfall in the last four months. Till July, the corporation has collected only about Rs 980 crore, civic officials said. “The ongoing situation of lockdown due to Covid-19 and dip in revenue will cause losses from Rs 12,000 crore to Rs 14,000 crore for 2020-21, which is half the income projected in budget,” said a senior BMC official.

According to officials, the civic body has set a target of Rs 28,448 crore revenue for this financial year. In February, then municipal commissioner Praveen Pardeshi had presented Rs 33,441 crore budget estimate for 2020-21. The civic body is already facing a financial burden, even as Pardeshi proposed many financial curbs in his budget speech, including no new hiring and outsourcing.

The shortfall in revenue has forced the civic body to prepare a plan of cost saving in all departments. A source from the BMC said major departments like roads, storm water drain, sewerage projects, water supply projects, and solid waste management will face cuts in their expenditure. On overall budget estimate, the cost saving would be up to Rs 3,500 crore. Big projects, however, like coastal road and health department will not have any impact.

“We are looking at around Rs 2,500 crore to Rs 3,500 crore cost saving for this financial year. An overall plan of changes in the budget has been prepared and it is under discussion,” said a senior BMC officer.

Civic officials said the slow pace of ongoing development works and no new projects due to lockdown had provided some “relief” as expenditure had also gone down. This had helped the civic body save some amount, officials said.

“We are saving some expenditure on ongoing big projects as the pace of the work has slowed down due to the current situation. Also, no new projects have taken off in the last four months,” Additional Municipal Commissioner, (Projects), P Velrasu, also in-charge of the finance department, told The Indian Express.

When asked about department-wise cut in the budget, Velrasu said, “It is premature to reveal from which departments we have proposed cost cutting since it’s in the draft stage. Some internal discussions are yet to take place and the proposal will also be shared with group leaders before being finalised.”

He also said big projects like coastal road and health department would not face any impact as the foundation of the corporation is strong.

Opposition leader in the BMC, Ravi Raja said revenues from property tax and premiums from building construction, which were major sources of income, had recorded massive dip.

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