Mumbai civic body plans to raise Rs 2,000 crore

The Municipal Corporation of Greater Mumbai (MCGM) is mulling raising funds to the tune of Rs 2,000 crore as India's richest civic body struggles to overcome a financial crunch created by a projected shortfall in revenue collection and massive expenditure on projects.

"MCGM is exploring ways to raise around Rs 2,000 crore through internal loans and also by ways of bonds and fixed deposits lying with the banks," Municipal Commissioner Swadheen Kshatriya told PTI.

"We have written to the State Government seeking permission to raise internal loans and hope to get a reply soon," he said. The corporation, which has an annual budget of over Rs 15,000 crore - more than some of the small states - is likely to face a drop of about Rs 600 crore in collection from octroi, one of its key revenue streams, in the current financial year.

One of the main reasons of the financial crunch is possible dip in octroi collection of around Rs 600 crore, the municipal chief said. The civic body is trying to find out reasons behind the drop by around 10-15 per cent of an estimated octroi collection of Rs 4,300 crore in the current fiscal, he said.

"We are examining the causes of likely shortfall in octroi collection. Whether it is recession, slackness on part of the civic staff or any other reason, is yet to be established," Kshatriya said.

The MCGM has taken up a number of projects, including the Upper Vaitarna water scheme, deepening and widening of Mithi river (whose flooding had caused a havoc in July 2005).

The municipal corporation is also implementing the Brihanmumbai Storm Water and Drainage (Brimstoward) project, costing Rs 1,200 crore, with assistance from the Central Government.