Politics | If BMC is selling family silver, all’s not well with Mumbai

Its revenue for 2019-20 was pegged at Rs 24,983 crore and the budgeted revenue for next year is Rs 28,448 crore; the revenue collection so far in FY 19-20 has been barely Rs 15,000 crore. A reason for this is its property tax collection — its largest independent source of revenue — has been stagnant or dipping in the last four years, given the poor state of the real estate market. Strangely, the budget has strangely forecast an increase next year.

The current year’s estimate was Rs 5,016 crore, but registers show that only about one-third the amount has been collected so far. Yet, the budget estimates Rs 6,760 crore next fiscal — a bewildering rise of nearly 35 percent. Does the BMC know of a fundamental shift in the property market that Mumbaikars are yet unaware of?

There is no question that the civic body’s finances took a major hit when its primary source of revenue, octroi, was replaced by the Goods and Services Tax. This hole is now filled by the Maharashtra government and forms the single-largest source of revenue for the BMC. This is about Rs 9,100 crore in the current fiscal and is budgeted at Rs 9,800 crore in next year’s. Additionally, there is a grant budgeted from the government at Rs 1,266 crore — a three-fold increase over last year.

Beyond money, this marks a clear fundamental shift in the relationship between the two: the BMC is increasingly dependent on the state government to run Mumbai. If the ruling parties in the state and local governments are aligned, as they now happen to be given the Shiv Sena’s dominance in both, the BMC will have a good run. Else, Mumbai will suffer.

This is a far cry from making cities relatively self-sufficient and competitive at the global level. Eventually, the BMC’s authority to comprehensively plan for Mumbai and execute those plans will wane. Centralisation of power is rarely a good urban practise.

What measures does the BMC propose to make good its shortfall? One, it will dip into reserves and revise its capital policy to move some of its fixed deposits into bonds and debentures. Never mind if wise analysts say this is like selling family silver. Pardeshi, in fact, validated it as a desirable thing and said the reserve money would be used to provide better infrastructure services.

Two, it will bring down establishment costs by about 44 percent in the next fiscal. The cost-cutting measures include hiring apprentices for short-term periods to cover for about one-fifth of the civic body’s work, not replacing senior retired employees, freezing recruitment, and rotating rosters to save on overtime. Expect civic services to be disrupted and the BMC’s 24 ward offices to be less efficient or responsive to citizens.

Three, the BMC proposes to charge higher fees for vendor licences and birth certificates. The last is not a laughing matter considering that the document is a pre-requisite for the imminent National Register of Citizens (NRC).

Four, and by far the most controversial of measures, is the proposal to legalise most of the irregular and illegal additions to commercial and residential buildings in the city. This is expected to cover nearly 7,500 properties and plots across Mumbai, and estimated to fetch the BMC a neat Rs 600-800 crore. However, it’s not as simple as it looks. This transforms the very basis on which licences were issued and penalties levied so far. Worse, it threatens to open the proverbial Pandora’s Box.

Together, the proposed measures make it clear that the BMC is scraping the bottom of its resource barrel. At such a time, Pardeshi sees nothing wrong in allocating a massive Rs 2,000 crore for the controversial coastal road. This freeway, when done, should make at least a few lakh car-owning Mumbaikars of the city’s 18 million happy; the rest can watch that happiness index.

Smruti Koppikar, a senior Mumbai-based journalist and chronicler, writes on politics, development, gender and the media. Views are personal.