Mumbai: BMC's fixed deposits facing negative growth

The countrys richest municipal corporation is losing its money For the first time in a decade the Brihanmumbai Municipal Corporations BMC fixed deposits FDs faced negative growth In the first seven years of this decade the annual growth rate of the FDs was 17 per cent which came down to six and three per cent in the past two yearsNot just COVID19 but megaprojects like the Coastal Road Mumbai Sewage Disposal Project MSDP and funding for the BEST have added to the BMCs burdenApart from spending on projects the BMC had also provided Rs 1700 crore to support the BESTWhile citizens are facing various economic issues due to the lockdown the BMC has been facing a crunch for the past two years The reserve fund which touched R80000 crore at one point has started a downward journey Although breaking FDs for immediate payments is not new for BMC the real worry is that the amount withdrawn is more than the new deposits and interest on FDsBetween March and November 2020 the difference between withdrawal and deposits is Rs 2300 crore In other words the BMCs expenditure is more than its revenue The BMC recorded a three per cent negative growth in the first eight months of the financial year and looking at the current scenario the withdrawn amount will only increase till March 2021At the end of March 2011 the BMC had FDs worth Rs 23330 crore which increased at an average of 17 per cent annually and reached Rs 72000 crore in March 2018 In the subsequent financial years the BMC somehow managed to increase the fund by six per cent In 201920 the fund increased by Rs 2500 crore but this was mostly due to the interest receivedDont blame pandemic aloneThough BMC officials pointed out that the COVID pandemic has reduced its income sources and increased expenditure it may not be the sole reason for the reduction In 201920 BMC broke FDs to support its debtridden transport wing BEST with funds worth Rs 1700 crores The BMC spent Rs 1281 crore on the Coastal Road and has appointed consultants for seven plants under MSDP completed one of them under the Rs 14000crore projectLeader of Opposition Ravi Raja told midday In the past eight months they spent an enormous amount on COVID management Spending on COVID centres with no one using them is a waste Same goes for funding the BEST Now who will give financial support to the BMCHe added The Shiv Sena is ruling in the state They should start the procedure to extend the deadline for GST compensation by another five years Otherwise it will be difficult for the corporation to manage civic worksNeither the BMC administration nor the ruling party is doing any financial management The compensation for GST ends in 2022 Is there a plan for new income sources or any changes in current sources like property tax to increase the income asked Prabhakar Shinde group leader of the BJPHe added The officers dont think about making up for the losses incurred by the many concessions BMC gives The BMC gave R1700 crore to the BEST what happened Neither the BEST is working nor the BMC come out of the financial loss