Civic body faces challenges in realising revenue streams after failing to generate revenue from sources it presented in last year’s budget
Civic chief Iqbal Singh Chahal (centre) presenting the annual BMC budget last week. Pic/Anurag Ahire
Brihanmumbai Municipal Corporation (BMC) Administrator Iqbal Singh Chahal had suggested new income sources for revenue last year, such as appointing agencies to increase property tax and advertisements for municipal properties. The corporation also proposed a hike and the appointment of an agency to recover pending property tax. However, nothing has happened in this regard yet, and despite that, the BMC has announced more fancy suggestions for the coming year.
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The commissioner announced six new revenue sources to increase the BMC's income, such as different fees for treating patients outside the city, implementing extra water and sewerage charges on built-up areas, developing revenue models from mega projects, and demanding a 75 per cent share of the FSI premium. But the BMC hasn’t acted on the revenue sources suggested in the budget of last year. So, there is a big question mark on the implementation of the revenue sources suggested for the next financial year.
Hike and agency for property tax
Property tax being the major source, Chahal proposed a 16 per cent hike in property tax and also the appointment of an agency for obtaining search reports, property valuation, and conducting e-Auctions of defaulters' properties.
Status: For this purpose, the BMC appointed an agency to search for more immovable properties and investments of 67 defaulters on a pilot basis to recover property tax. These property owners owe a total of over Rs 355 crore, including a basic tax of Rs 268 crore and a penalty of R87 crore. “The report is ready. But before taking any action, we will seek opinions from the legal department,” said an official from the BMC. So, the civic body wasn’t able to recover the huge amount of property tax. Meanwhile, even the state government struck down the hike for the fifth consecutive year, and the BMC revised its target to collect the tax from Rs 6,000 to Rs 4,500 crore.
Pending dues from state govt
Total outstanding dues from the offices of various state government departments on account of grant-in-aid, property tax, etc., under the BMC’s jurisdiction amounted to Rs 7,223.42 crore on December 31, 2022. This includes an amount of R5,419.14 crore on account of grant-in-aid from the education department of the state government. The BMC chief assured that they would take rigorous follow-up and estimated to collect at least R1,180 crore as grant-in-aid.
Status: But after a year, the outstanding dues increased. The BMC chief mentioned that on December 31, 2023, the total outstanding dues from the state government increased to R8,936.64 crore. This includes an amount of R5,946.33 crore on account of grant-in-aid from the education department of the state government.
COVID expenditure reimbursement
The civic chief has also been assuring citizens for the past two years that COVID-related pending dues would be recovered from district collectors.
Status: The BMC has been unable to collect any such dues from collectors. Till December 2022, a claim of Rs 2,037.42 crore and Rs 2,119.26 crore for expenditure was submitted to the Mumbai City district and Mumbai Suburban district collectors.
Advertisement on BMC properties
It was planned to identify suitable places for advertisement on immovable properties owned by the BMC and give those places/sites for advertisement to increase revenue through rent, property tax, and advertisement fees.
Status: The BMC floated a tender for advertising on a few locations on footpaths. The tender is still in process, and the estimated revenue is around R21 crore, said an official from the BMC. As this is a pilot project, the identification of other properties hasn’t been done yet.
16%
Hike on property tax proposed by BMC last year
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