What to expect this year in BMC's budget

Feb 04, 2013, 06:42 IST | Sujit Mahamulkar

The civic agency isn't very hopeful about generating more revenue in the 2013-14 fiscal year, with political parties wary of tax hikes that may irk the public right ahead of the 2014 general elections

The total budget for 2012-2013 is likely to increase from the current Rs 26,500 crore to Rs 28,000 crore in the approaching fiscal year. According to sources, the BMC is not expecting to improve much on its revenue in the approaching fiscal. Hike in taxes imposed directly on the public is likely to be met with stiff opposition by the Shiv Sena-BJP alliance, who do not wish to irk the electorate prior to the 2014 general elections.


Last year, the BMC received revenue of Rs 6,100 crore by way of octroi, while income from property tax crossed the Rs 3,700 crore mark. The BMC isn’t expecting to make much of an improvement on last year’s figures income from octroi is expected to go up to Rs 7,050 crore this year, while property tax is actually expected to decline by Rs 200 crore at Rs 3,500 crore, with the BMC having switched over from ratable value to capital value base property tax system.

On the other hand, revenue generated by the development plan department is expecting to compensate the loss: the department is expecting to earn about Rs 1,200-1,300 crore in the form of development charges in exchange for permissions given to builders.

Other revenue earners departments that look after hoarding, licence fees and advertising may propose hikes of at least 7-10 per cent in the coming fiscal year. Trade refuse charges are likely to be hiked by 10 per cent in the budget, and will be enforced from April 2013. The BMC collects trade refuse charges from traders for generating trade waste.

While these charges are only indirectly recovered from public, water taxes, which have to be paid directly by the aam admi, is a source of worry for the city’s administrators. Ideally, the civic administration wants to increase water tax by at least 5-8 per cent every year, but political factors prevent it from doing so.

No hike in water tax
A hike in water taxes may not be proposed in the civic budget this year, as the taxes were hiked recently and another increase may give rise to an outcry. A senior civic official confirmed that while a hike in water charges will not be part of the new budget, the hike would be introduced in phases to avoid protests from political parties.

The ruling Shiv Sena-Bharatiya Janata Party alliance is likely to oppose new taxes if it is proposed by the administration. With the Assembly and Lok Sabha elections approaching in 2014, the saffron alliance is worried about the strong anti-incumbency threat and does not wish to rock the boat further by introducing new taxes. Not a single MLA was elected from the Shiv Sena in the last assembly poll in the island city or the eastern suburbs.

“We will not allow hike in taxes which will be burdened on citizens,” said Rahul Shewale, chairman of the civic standing committee. The source revealed that the focus of the budget would be on completing the ongoing projects and beautifying the city, improving roads and health services. A majority of the budget will be spent on roads, solid waste management and water projects.  

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