The BMC's Chief describes the internal loan as a "formality," but members of the standing committee are adamantly opposed to the plan

The finances of the Brihanmumbai Municipal Corporation (BMC) have improved, causing it to offer a budget that is 17.7% more than the previous year's, at Rs 45,949.21 crores. However, the Mumbai civic still needs to raise about 17,000 crores from within the city to meet capital expenditure demands or to maintain and upgrade development projects.

 

The plan has been hotly opposed by members of the standing committee, despite BMC chief Iqbal Singh Chahal's insistence that acquiring an internal loan is only a formality. The BMC has proposed a significant increase in capital expenditure in Budget 2022-23. The funds allocated to capital works and development projects account for 49.28% of the total budget. The increased capital expenditure is now estimated to be Rs 22,646.73 crores.

 

This is despite the fact that just 56.77 percent of the capital budget outlay of 18,750.99 crores in 2021 (revised to 16,866.48 crores in 2021) had been spent as of January. The estimated revenue expenditure for 2022 is Rs 23,294.05 crores. A total of 5,840 crores will be removed from the local body's reserves for the Coastal Road and Goregaon Mulund Link Road projects, while another 3,866.28 crores will be withdrawn for capital and revenue expenditure, including employee pensions. In contrast, as announced by Chahal during the 2021-22 budget, a loan of Rs 4,998 crores will be accepted as an internal loan.

 

Despite the challenges posed by the COVID-19 pandemic, which severely impacted the civic body's earnings, Chahal stated that the civic body's finances have vastly improved. "Due to a 50% reduction in premiums charged on building proposals between March 21 and December 21, BMC has received an additional income windfall of nearly Rs 14000 crores in the last 11 months (due to an increase in volumes wherein 2860 new construction projects were approved—the majority of which were unviable with full premiums), resulting in an unprecedented jump in BMC reserves from 78000 crores to nearly 93000 crores now. It's a true win-win situation, as the real estate sector is on the rise right now, leading in a massive increase in employment for at least the next three years" Chahal stated.