BMC met budget due to high premiums, but what next?

The expenditure on the Coastal Road project is likely to increase further. File pic

The BMC, the richest civic body in the country, found an instant boost from building premiums this year which was around 50 per cent over the estimated income for 2021-22. This made way for assistance to big-ticket projects like the Coastal Road, city roads and bridges, Goregaon Mulund Link Road and desalination, especially ahead of the civic election.

As the BMC election, which generally takes place every five years in February, is yet to be announced, the Shiv Sena-led civic body will get a second chance to present the election budget. Last year, the BMC announced a Rs 39,038-crore budget with an estimated income of Rs 28,308 crore through various sources. Apart from the compensation from the state for discontinued Octroi at Rs 10,583 crore, which is a fixed source, other sources did not generate as much.

However, the sudden surge from building premiums, the biggest-ever fixed source for the civic body, after the state government's 50 per cent cut in premium for builders in view of the pandemic, brought in a balance. The BMC received around Rs 13,200 crore from building premiums till January-end and is expecting Rs 200-Rs 300 crore more in the next two months. Now, the challenge before the BMC is to maintain pace of these projects in the next financial year as the state scheme offering 50 per cent cut is likely to discontinue.

This year, there was a rise in building premiums as the state announced a 50 per cent cut. Representation pic

The BMC announced the work of several big projects in the budget 2021-22 with a whopping Rs 18,751 crore for projects, which is double than the previous year with an internal loan of Rs 10,000 crore. The BMC spent enormously on the coastal road, city roads and bridges but several other projects like the sewage treatment plant, GMLR, Deonar waste-to-energy plant did not take off despite monetary provision.

As per the sources, the size of the budget may rise further for the next year with the expenditure on the coastal road increasing. The corporation also set aside a lump sum amount for projects which did not start in 2021-22. Provision for Rs 3,500-crore desalination project will also be on cards. The BMC has linked its Rs 82,000-crore Fixed Deposits to these projects, keeping the work going without any new revenue model.

BEST, the transport wing of the BMC, may also get major help. While the BEST administration asked for Rs 6,500 crore from the BMC, the corporation has given it R750 crore to help and Rs 406 crore loan in 2021-22. The grant may increase two-three folds this year.

Rs 39,038 cr
The civic body's budget for last year