Economic Slump Finally Grips BMC – India’s Richest Civic Body

Mumbai: Economic slowdown has finally started knocking at the doors of Brihanmumbai Municipal Corporation (BMC), India's richest civic body, in charge of the upkeep of civic amenities in the country’s financial capital, Mumbai. This year’s budget of Mumbai city at Rs 30,692 crore, which is higher than many states in the country. The BMC is run by Shiv Sena, a partner in the ruling BJP government in Maharashtra.

The commissioner of BMC, Pravin Pardeshi, has written a letter to all his colleagues. The letter, dated September 30, 2019, has been marked 'highly urgent'. It says, "It is seen till 31 August 2019 that BMC's income is reduced and expenses are increasing. If the situation continues then BMC will come under financial danger." So, to avoid this, BMC commissioner has suggested six measures.

The most serious suggestion by the BMC head is to stop government recruitment, except in essential services, such as road, water supply, sewage management, hospitals and schools. 

Another suggestion is that secondary services must be based on the PPP (public-private partnership) model. Under this gardens, halls, society centres should be leased out to private players for ‘better financial management’. 

The letter also asks for compulsory and strict recovery of all taxes. The tax collection suggestions also detail pending litigation on tax collections as well as using new technology to reduce tax evasion. The commissioner has asked officers to find out “new ways” of increasing revenue.

This letter has dropped a bomb on officers in BMC, and is likely to impact ongoing projects, particularly in infrastructure, including road development and primary education. 

This year, BMC was expecting Rs 24, 983 crore from tax collections. The revenue expenditure was expected to be Rs 19,205 crore and the capital expenditure at Rs 11,480 crore.

"It is being said that the GST (goods and services tax) collection was expected to be Rs 9,000 crore. But as recession is there everywhere, it will ultimately hurt the tax collection of Central and state governments. So, BMC's share will go down substantially. Though we don't have the exact number right now, but the picture is clear that the BMC will be in financial constraints. The letter clearly suggests that," said a senior BMC officer. 

Meanwhile, with Maharashtra elections round the corner, the issue may take a political turn as the campaign begins. The Opposition parties are already focusing on financial issues and failures of the Bharatiya Janata Party-Shiv Sena government. Hence, this letter could increase political tensions in the ruling alliance.