Mumbai: Now, COVID-19 deals 20 per cent cost cut for city civic works

Work on basic amenities including footpaths, public toilets, roads might have a much adverse impact. File pic

While they have already affected development work this year, losses due to COVID-19 will also hit allocations for projects in the financial year 2021-22, which happens to be an election year. This will be reflected in BMC's budget for next year, work on which has started. After reducing Rs 2,500 crore from capital expenditure this year, civic departments have been told to cut requirements by 20 per cent to 25 per cent for 2021-22.

The budget is likely to be presented in the first week of February, 2021. However, considering the political pressure amid the election, it may also break its fixed deposits to fund fancy projects. Civic elections will be held in January-February 2022.

The Coastal Road project may continue getting required funds. File pic

The Brihanmumbai Municipal Corporation (BMC) had presented a Rs 33,441 crore budget for 2020-21, out of which Rs 14,647 crore was allotted as capital expenditure for projects. However, as revenue sources reduced amid the pandemic, it okayed a Rs 2500-crore cut in capital expenditure in August. Cuts were done in the Coastal Road project, Gargai dam, road works, BEST, footpaths, Development Plan, waste management projects, etc. The cuts hurt the development of civic amenities like footpaths, roads, public toilets and long term projects like Gargai dam.

An officer from an important civic department said that each department sends its budget requirements depending on the previous year. But this year, the BMC's finance department has asked the rest to cut their budgets by 20-25 per cent. Departments which did not do the required cuts were asked to revise their capital requirements. BMC will allocate adequate funds to the health department and the Coastal Road, which has already been delayed by a year.

‘Funds remain unutilised'

Another officer said, "Even before the pandemic, due to various reasons and challenges, departments would achieve 70-80 per cent funds in a financial year. Nine months of the current financial year have already passed and although work has resumed now, not even half the funds will be utilised by departments except health by year-end. This trend is expected to continue next year too."

P Velrasu, additional municipal commissioner, was unavailable for comment.

Rais Shaikh, corporator and group leader of Samajwadi Party in the BMC, claimed, "There is financial mismanagement in the corporation and priorities are misplaced. There will be flashy projects but basic amenities like footpaths, small roads, toilets will be neglected. These always see low progress."

"The financial condition of the BMC will affect the poor as small works related to road pavements, gutters, public toilets get hampered. Even if the BMC tries to inflate the size of the budget by breaking its fixed deposits, or by taking internal loans for big projects, ultimately it will be the citizens, who will have to pay the cost through taxes after the election," said activist Anil Galgali.

The BMC has four main sources of income - compensation for octroi, property tax, development planning and water and sewerage charges. Together they contribute R22,000 crore. Though the BMC is getting the compensation for octroi (R9,799 crore for the year), the revenue through development planning (buildings proposals) and property tax is in limbo. BMC has so far spent over R2,000 crore on COVID and its revenue losses may go up to R10,000 crore this year.

25%
Approx. budget cuts depts have been asked to make for next year

Sources, estimated revenue in budget 2020-21

. Compensation for octroi:- Rs 9,799 crore

. Property tax: Rs 6,768 crore

. Development projects: Rs 3,880 crore

. Water and sewerage charges: Rs 1,536 crore

. Interest on investment: Rs 1,828 crore

. Total: Rs 23,811 crore

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