BMC's FDs in banks see exponential rise - going from R23k cr in FR 2010-11, to R78k crore in Dec 2019; average annual spending on projects remains Rs 4,500 cr.
Graphics/Uday Mohite
The richest municipal corporation in the country may be struggling to keep its sources of income intact, but its deposits in the bank continue to skyrocket. Brihanmumbai Municipal Corporation's (BMC) Fixed Deposits (FD) reached Rs 78,668 crore in December 2019.
However, thanks to poor spending, the city continues to have weak infrastructure even with such high reserves. A huge population in a small area, high property rates, heavy income from taxes and little expenditure on projects make BMC the richest corporation in Asia and richer than many states in the country.
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Its allocation of funds, however, remains questionable. Most of BMC's revenue income is spent on salaries, followed by infrastructure and sewage disposal. Roads, bridges, and nullah-widening get the biggest pie of the budget, while health and education are sidetracked. While its income has not gone up in the past five years, spending on various projects has been pegged at only R10,000 crore — which will be extracted from reserve funds.
At the end of the financial year 2011-12, BMC's FDs amounted to R23,330 crore. In March 2019, the deposits reached R76,579 crore. In the 2019-20 budget, out of R76,000 crore, R12,964 crore (15 per cent) was reserved for pension and provident fund and R8,580 (10 per cent) crore was deposits paid by contractors. The remaining R52,000 crore (75 per cent) was available for projects. This 75 per cent of the money was allocated under funds such as sinking and contingent fund, land acquisition and development fund, depreciation funds, asset replacement fund, roads and bridges construction development fund, hospital fund, primary school building construction fund, etc.
Yet the average spending on projects remained R4,500 crore per year in the last decade. BMC also received a large amount of interest on FDs — R2,085 crore in 2018-19 — which was added to the income, but none of it was used to improve the city's infrastructure.
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