“One of the key aspects of this year’s budget is to provide a big push to the city’s infrastructure. A few key projects pertaining to feasibility study of new bridges, tunnels and underpasses will be announced,” a civic official added.
“Another key objective would be to augment the water supply of Mumbai. The budget may make a substantial allocation for the Gargai-Pinjal dam project. Since 2014, no new water source was created for Mumbai. This project will get a special push as it is the brainchild of CM Devendra Fadnavis,” the official added.
The official added that substantial allocations will also be made for Phase 2 of the Coastal Road Project, Goregaon Mulund Link Road (GMLR) and the Waste Water Treatment Facility (WWTF) project. The officials said that since the coastal road has secured all the required permission last year, the construction works will begin in full swing from this year as the BMC intends to complete this project by 2029.
The 25-kilometre long coastal road is set to connect Mumbai’s Versova in the western suburbs with Bhayander in the Mumbai Metropolitan Region (MMR).
The authorities may also make an allocation for the GMLR project, for which digging work is set to begin for the twin tunnels this year. The first phase of this project is set to be completed this year and officials have set up a 2029 deadline for completing the project. The GMLR and the second phase of the coastal road is also set to be linked to ensure smooth traffic flow between the eastern and western suburbs.
“The roads department may also see a substantial allocation since this year we (BMC) intend to complete the concreting work by a significant margin,” the official added.
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The BMC’s environment and climate change department may also get a substantial allocation of funds for setting up a hyperlocal air quality monitoring system, sources said. The Brihanmumbai Electricity Supply and Transport (BEST) undertaking is also likely to get a substantial allocation for procuring new buses, they added.
Augmenting revenues
At a time when the civic body has recorded a dip in its revenue, this year’s budget may also see a slew of measures to generate revenue. One such measure could be a hike in property tax rates; the previous hike was in 2015. Usually property tax rates are increased after every five years but in 2020, the rates were not increased due to the Covid pandemic.
“After the budget is presented, we will examine the current status of property tax, the formula on which it is calculated and the litigations involved. This system could be restructured,” an official said.
Last year, the BMC had proposed the implementation of a unique solid waste management (SWM) fee to augment its revenue. It also proposed bringing in commercial units in slum areas under its property tax bracket.
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The BMC may also announce its objective to shore up its revenue through municipal bonds, which are debt securities issued by municipal corporations to raise capital for funding key public infrastructure projects.
At present, the BMC has taken up infrastructure project works having a total capital size of Rs 1.5 lakh crore — nearly double than BMC’s current reserve corpus which stands at Rs 81,774 crore.
Apart from this Rs 51 of the total reserves, held as fixed deposits, are earmarked for internal commitments. These include funds set aside for employee gratuity, pensions, Provident Fund contributions, and refundable bank guarantees taken from contractors as security deposits, which must be returned upon completion of projects.
“As we can see, out of the Rs 81,000 crore reserve that we have, only 49 per cent or Rs 39,500 crore could be used for the infrastructure projects, while the overall size of these projects is nearly four times this amount. This clearly indicates that in the next few years, there is going to be a liquidity crisis in the BMC,” said a civic official.
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Therefore, the BMC is in the process of raising capital from the market by issuing municipal bonds. The municipal corporation’s decision also comes following the Centre’s decision to incentivise property tax.
“The union ministry’s announcement to incentivise municipal bonds comes at a time when we are already working towards fulfilling the credit rating criteria. Once this process is completed, we can move ahead in terms of listing bonds in exchange for a fixed interest,” an official told The Indian Express.
