Indian Express 17.11.2009
Get ready to shell out more in taxes, service charges in 2010
BMC BUDGET: Civic body struggles for funds but asks departments to keep hikes as low as possible
The coming New Year might begin on a slightly bad note for Mumbaikars as they may have to shell out higher taxes in 2010.
In the times of economic slowdown, Brihanmumbai Municipal Corporation — the country’s richest municipal corporation with a budget of Rs 19,000 crore— is unsure of its financial condition and is considering a proposal to increase taxes/service charges albeit at the minimum level. It is also borrowing a loan of Rs 2,500 crore to complete civic projects.
The civic administration has asked its prominent departments including water, roads, sewerage, street lights, education to study the feasibility of raising charges for services that have seen no increase in the last two years. “We are awaiting a proposal from these departments and are exploring the possibility to raise the charges. However, we do not wish to burden citizens and the hike will be least,” said a senior official from finance department.
Besides slowdown, BMC has suddenly found itself in the grip of financial crisis after its money spinning department—Octroi— recorded a 10 per cent decrease in its revenue as compared to last year. The Octroi department contributes one-fifth of the annual budget. As per the officials, the department is struggling to achieve its annual target of Rs 4,400 crore this year. Moreover, implementation of the Sixth Pay Commission that has revised employees’ salary has added to the burden.
BMC has also requested the state government to allow borrowing of an internal loan up to Rs 2,500 crore to carry out capital works of road development, water projects, sewerage and other works of basic but important nature.
Civic officials said the loan was reserved in the 2008-09 budget and it is only seeking the permission to actually withdraw the amount. The state government over the last two years had refused the permission. “But this year the situation is different due to economic slowdown and state officials are positive about our demand,” the official said. The loan is being proposed to be taken from the BMC’s own statutory funds, including provident fund. There are 16 types of internal statutory funds including building repairs, depreciation, fidelity guarantee insurance fund, etc.
In a bid to reduce maintenance costs on streetlights, the BMC is contemplating switching on only alternate streetlights. It currently incurs an annual cost of Rs 40 crore on street lighting. An option of a complete switch to solar lights is also being explored.
The finance department has also issued a 16-point circular asking civic employees to cut down expenditure in view of reduced income. Each department has been asked to make a saving of 10 per cent on expenditures. These include timely completion of projects, identifying new sources of income against illegal construction, dumping of debris, illegal hawking and recovery of funds pending with government and public authorities — Rs 703 crore is due from the state government in taxes.
Its departments have also been told to save electricity bills in office and avoid new recruitment, overtime, refurbishing of offices, purchase of new furniture, use of municipal vehicles for travelling, etc.
