BMC money spinners say budget targets seem too distant

Reeling under the impact of the economic slowdown,the top three income earning departments of the BMC have informed the financial department that this year’s budget targets would be difficult to achieve.

Written by Shweta Desai | Mumbai | Published: January 4, 2009 4:07 am

Reeling under the impact of the economic slowdown,the top three income earning departments of the BMC have informed the financial department that this year’s budget targets would be difficult to achieve. If the slowdown continues for another few months,even the next fiscal’s (2009-10) targets would have to be revised.

During the ongoing budget meetings,the octroi,assessment (property tax) and building proposal departments have informed the office of the Chief Accountant that with global recession affecting Mumbai,achieving this year’s target has become difficult.

“All the top three departments have given us indications of the budget targets not being achieved. They have also asked us to revise next year’s budget target which are around 10 per cent to 15 per cent higher than those of 2008-09,” said a senior civic official.

The major share of the Rs 16,000 crore budget estimates for the current financial year comes from octroi (Rs 4,600 crore),property tax (Rs 2,206 crore) and building proposals (Rs 887 crore). The 2009-10 target estimates of these department’s have been set at Rs 5,300 crore,Rs 2,400 crore and Rs 1,200 crore respectively. If the income from these departments takes a hit,then it will have a repercussion on capital expenditure in the next budget.

Civic officials have said that less important projects of renovation and beautification will have to be kept aside for a while and all departments have been told to prioritise important work. Non-achievement of targets by major income earning departments will also affect the basic civic amenities like roads,sewerage and water.

“It looks difficult to achieve the targets in the next three months. Although there has been no loss as yet,the growth of trade has been very slow,” pointed out an octroi department official. Due to the realty slump,builders are not coming with new projects,as a result of which there has been a sharp dip in income from development charges,premium and scrutiny fees.

“Income can be earned only when there are new projects. Due to the real estate boom of the last three years,the targets were increased annually and we would confidently surpass them. However,we have been worried for the last five months on target achievements,” said an official from the DP department,which has so far achieved Rs 600 crore and needs to fill in another Rs 200 crore.

The property tax department,too,depends on new property for its additional revenue. While the figure of existing property tax payers remains constant,newly developed properties help fill the assessment department’s coffers. “When our collection team goes to take taxes,builders have begun saying that the market is tight; so they will pay next month. And since there are not many new projects,we are worried about how we can achieve next year’s target,” he said. So far the assessment department has collected Rs 1,503 crore and must earn the remaining Rs 700 crore in the next three months. The property tax department,too,has to worry on its locked income: due to court cases,disputed cases of bills and government property bills that have not been paid so far. “Rs 2,200 crore is locked income,which is difficult to extract from the parties,” said a senior civic official.

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