BMC Keeps Taxes Unchanged, Hikes Capex In Post-Covid Budget

India's richest civic body kept taxes unchanged and increased capital expenditure in its annual budget following the Covid-19 pandemic.

The Brihanmumbai Municipal Corporation proposed a net outlay of Rs 39,038.83 crore—a 16.74% increase over the preceding year. It, however, reported a dip in revenue.

“Revenues have declined due to decisions taken to combat Covid-19 and to provide relief measures for different sectors affected by it,” Municipal Commissioner IS Chahal said in his budget speech.

• Budget estimates of revenue income for the financial year 2020-21 was revised downwards by nearly a fifth to Rs 22,572.13 crore.
• Budget estimates for financial year 2021-22 for revenue income is proposed at Rs 27,811.57 crore, he said.

To tide over pandemic-induced financial loss and meet rising capital expenditure, the corporation will raise an internal loan of Rs 5,876 crore and withdraw Rs 3,836.09 crore from its reserve fund.

No Property Tax Hike

A slowdown in the real estate sector has led to reduction in assessment of new properties, affecting revenue collection, the commissioner said. As a result, the corporation has refrained from hiking property tax rates.

“In the year 2020-21, revenue from development plan department was estimated at Rs 3,879.51 crore, which is revised to Rs 1,199.99 crore,” he said. This, he said, was a “sizeable decrease”. Many ready-to-occupy flats have remained unsold, he said.

The drop in property tax collection is temporary and the corporation expects tax collections to normalise in the immediate future, the commissioner said. “The BMC has been following up with the state government for outstanding dues of Rs 5,274 crore and with slum rehabilitation authority for outstanding dues of Rs 1,600 crore,” he said. “We expect to receive this amount from the government in 2021 as proposals are under active consideration.”

The civic body also expects property tax and development plan collections to increase in 2021-22 due to incentives announced by the government as well as a rebound in the economy, he said.

Vaccinate One Crore Citizens

The Public Health Department is geared up for Covid-19 vaccinations, the commisioner said, adding the civic body's eventual plan is to vaccinate around 1 crore citizens of the megapolis.

“Computerised registry of people needing vaccination and undergoing vaccination, mega storage (of vaccines) for all of Mumbai, training of various stakeholders, local cold storage by ILR refrigerators are being activated, jumbo facility centers, major hospitals and important peripheral hospitals have been identified as vaccination centres,” he said.

Other Highlights

• The corporation has proposed to government to declare the civic body as single planning authority for all of Mumbai, to aid integrated planning and development of the city. The proposal is being considered by the state government.
• Monetary compensation to project affected persons in infrastructure projects. (Budget Estimate 2021- 2022 = Rs 100 crore)
• Plans to set up a “Dabbewala Bhavan” in central Mumbai, with provision of Rs 1 crore.
• Proposal to decongest skyline with new hoarding policy.
• Total expenditure for health budget estimated at Rs 4,728.53 crore.
• Rs 20,00.07 crore proposed in budget estimate for 2021-22 for coastal road project and Rs 1,300 crore for Goregoan Mulund link road.