My City My Budget - BMC Budget 2021-2022

‘Maximum City, Maximum Budget for developing world class Infrastructure with Inclusive Growth.’

 The road to a USD 5 trillion economy for India passes through the financial capital Mumbai. BMC Budget 2021-2022 is the step in the right direction for making Mumbai a world class city with appropriate budgetary support for Infrastructure and Healthcare leading to an overall inclusive growth and helping India transition from a developing to a developed country.

 The Indian economy has been through very turbulent times in the last 12 months. Since mid-March 2020, when a lockdown was imposed millions of people have been affected in terms of livelihood as well as healthcare. Mumbai being the financial capital and one of the biggest cities in the country, people from around India come to Mumbai in very large numbers to seek employment. Mumbai accounts for slightly more than 6.16% of India's economy contributing 10% of factory employment, 30% of income tax collections, 60% of customs duty collections, 20% of central excise tax collections and 40% of foreign trade and in excess of INR 50,000 crores in corporate taxes to the Indian economy; thereby making Mumbai the most significant city in terms of overall development and growth for the Indian economy.

 With this mega metropolis status, the city has its own challenges in terms of infrastructure, housing, healthcare which were amplified in the COVID-19 pandemic. With Mumbai being the second most populated city in the world having a population density of around 26,000 people per square kilometre, the challenges faced in such a pandemic are very complex and social distancing in such a city is extremely difficult to achieve. With the largest slum in Asia being present in Mumbai, the way the city has tremendous stress with the spread of COVID-19. However due to the efficient work carried out by the local and state Government the spread of COVID-19 has been restricted to a large extent and way COVID-19 was handled in the largest slum in Dharavi has been applauded world over and by the UN itself.

 Keeping this backdrop in mind the budget 2021-2022 of BMC for Mumbai city has been the most important event that would shape the metropolis for the times to come, keeping a fine balance of increasing expenditure without imposing additional taxes for the citizens. In order to make Mumbai a world class city and create employment the key is to create world class infrastructure. The budget has given the much needed philip in the right direction.

 Being an election year budget, there is a maximum outlay and push. Election year budgets have always been a greater outlay than normal years. 2011-2012 size of the budget INR 21,000 crores, 2016-2017 INR 37,000 crores and 2021-2022 INR 39,000 crores. With a targeted growth of 16.7% in overall expenditure for FY 2022, the total budget outlay has been to the tune of INR 39,000 crores. The central theme of the budget has been towards a push for infrastructure with an estimated spend of over INR 18,000 crores for infrastructure projects like Coastal Road, Goregaon–Mulund link road, bridges, storm water drains, an increase in allocation of over 28% compared to last year in this area.

 To prevent additional pressure to the tax payers, all taxes and license fees have been kept unchanged with no increase. On the revenue side DP departments’ revenue has been affected by the stock of unsold flats across the city. The major increase in revenue this year would be through property tax (INR 2500 crores), DP department (INR 800 crores), grants in aid from the Government (INR 840 crores). The grants in lieu of octroi would increase by around INR 784 crores which is almost similar to the increase witnessed in FY 2021 of INR 739 crores. On the revenue side of it, a big hit has been taken due to the lower interest earned on FD due to the falling interest rate scenario in the country. Declining revenue from investment from INR 2,083 crores in FY 2020 to INR 1,320 crores in FY 2021 and INR 975 crores in FY 2022.

 Government of Maharashtra owes amount to BMC on account of Grant-in-aid, Property Tax, Water and Sewage Charges, BMC’s share in various taxes collected by the State Government etc. The total outstanding dues from the Regional offices of various departments of the State Government under the jurisdiction of BMC amounted to INR 5,274 crores by the end of December 2020. This includes an amount of INR 3,629 crores on account of Grant-in-aid from Education Department of the State Government.

Revenue

INR (In crores)

Revenue Receipts

27,810

Grants in lieu of Octroi

10,585

Property Tax

7,000

Development Plan Department

2,000

Grant in Aid from Government

1,723

Water and Sewage

1,598

Supervision Charges

1,096

Investment Income

975

Expenditure

INR (In crores)

Revenue Expenditure

28,308

Establishment

14,020

Operation and Maintenance

3,660

Revenue Grants and Subsidies

1,127

Administration Cost

985

Contribution to Capital Account

8,020

 Post the pandemic healthcare being a focus area, allocation of INR 4,278 crores to Mumbai's healthcare for the year 2021-2022, with INR 822 crore to be invested in healthcare infrastructure. For inclusive growth the thrust on education, BMC has allocated INR 2,945 crores for education and INR 15.90 crores has been set aside by the civic body for supplying schools with soaps and hand sanitizers to help schools foster COVID-19 preventative behaviour as schools have started to reopen. A sum of INR 2 crores has been set aside for opening 10 CBSE schools in existing BMC buildings.

 With BEST buses being the lifeline when the trains were shut in Mumbai, BMC has kept aside INR 750 crores provision for BEST undertaking, giving financial assistance of INR 50 lakhs to the family of each deceased BEST employee who died due to COVID-19 while discharging duty. The gratuity of 3,649 employees will also be cleared with nominal interest rate loans estimating at INR 406 crores.

 Infrastructure push has been tremendous. Some of the key infra projects are:

·        Improvement of roads including repair maintenance and widening, allocation of INR 1,600 crores

·        Aquarium and Marine Research Centre, allocation of INR 500 crores

·        Coastal Road Project to make Mumbai a world class city, allocation of INR 2,000 crores

·        Goregaon-Mulund Link Road for better connectivity, allocation of INR 1,300 crores

·        Sewage Treatment Project to deal with the ever growing population in Mumbai, allocation of INR 1,339 crores

·        Widening of the Mithi River and other river systems, allocation of INR  280 crores

·        Construction of Mogra, Mahul Pumping Station, allocation of  INR 100 crores

·        Provision for Rejuvenation of Rivers, allocation INR 50 crores

·        The Ashraya Yojana scheme, allocation of  INR 500 crores

·        Modernization of Deonar Abattoir, allocation of INR 30 crores

·        Storm water drainage to prevent flooding in monsoons, allocation of INR 1,150 crores

·        Savage Disposal project with an allocation of INR 2,000 crores

 For India to make the transition from a developing to a developed country the megapolis of Mumbai must lead the way in terms of infrastructure and growth. In order for India to overtake China in economic growth, the gap between Shanghai and Mumbai must reduce in terms of world class cities. In these turbulent times that India has faced over the last twelve months, infrastructure, healthcare and inclusive growth is the right way forward which has been taken care in the BMC budget 2021-2022 which will help Mumbai to emerge stronger and faster as a world metropolis.

 _Farzan Ghadially.