BMC faces record financial liabilities of Rs 1.9 tn

15 Dec 2023 CW Team

As per the BMC's 2023-24 budget document, the liabilities had reached Rs 1.4 trillion by March 2023. Subsequently, the BMC has approved additional projects, pushing the liabilities close to Rs 2 trillion. Critics express concerns that substantial spending could impede the initiation of new projects in the coming decade, potentially neglecting the needs of future generations. However, BMC administrator I S Chahal argues that these long-term projects will result in durable assets and maintain financial viability.

Within a year of its previous budget, BMC has augmented its expenditures by almost Rs 500 billion. While it initially budgeted Rs 197.6 billion for the fiscal year 2023-24, the actual spending has more than doubled. Key contributors to this escalation include projects like the Dahisar-Bhayander Link Road (Rs 33.04 billion), Mumbai Coastal Road extension from Versova to Dahisar (Rs 166.21 billion), and Goregaon Mulund Link Road tunnel (Rs 63.22 billion). Off-budget items, such as cement concrete roads (Rs 60 billion) and a desalination plant (Rs 35.2 billion), also contribute.

BMC commissioner IS Chahal defends these expenses, emphasising that the completion periods for these projects range from 5 to 7 years, and the annual breakdown of liabilities is approximately Rs 200 billion. He asserts that BMC has sufficient income sources and specific funds to support these projects, citing fixed deposits of Rs 870 billion and revenue streams from development charges, property tax, and compensation.

However, skeptics, including Milind Mhaske of NGO Praja and a former BMC commissioner, question the alignment of these projects with citizens' needs. They raise concerns about the focus on car-centric projects and substantial spending on a desalination plant without mandating rainwater harvesting for all.

The opposition points out that many projects were initiated after the corporators' term ended in March 2022, limiting scrutiny. Former Congress corporator Ravi Raja questions the administrator, noting that BMC's substantial fixed deposits are allocated to various commitments, making it challenging to fund extensive capital expenditures without affecting other liabilities.

The richest civic body in the country, BMC, is grappling with a historic peak in financial liabilities, reaching Rs 1.9 trillion. These liabilities represent BMC's obligations to contractors and creditors and have escalated due to ambitious infrastructure projects, including the coastal road, initiated in the last five years. As per the BMC's 2023-24 budget document, the liabilities had reached Rs 1.4 trillion by March 2023. Subsequently, the BMC has approved additional projects, pushing the liabilities close to Rs 2 trillion. Critics express concerns that substantial spending could impede the initiation of new projects in the coming decade, potentially neglecting the needs of future generations. However, BMC administrator I S Chahal argues that these long-term projects will result in durable assets and maintain financial viability. Within a year of its previous budget, BMC has augmented its expenditures by almost Rs 500 billion. While it initially budgeted Rs 197.6 billion for the fiscal year 2023-24, the actual spending has more than doubled. Key contributors to this escalation include projects like the Dahisar-Bhayander Link Road (Rs 33.04 billion), Mumbai Coastal Road extension from Versova to Dahisar (Rs 166.21 billion), and Goregaon Mulund Link Road tunnel (Rs 63.22 billion). Off-budget items, such as cement concrete roads (Rs 60 billion) and a desalination plant (Rs 35.2 billion), also contribute. BMC commissioner IS Chahal defends these expenses, emphasising that the completion periods for these projects range from 5 to 7 years, and the annual breakdown of liabilities is approximately Rs 200 billion. He asserts that BMC has sufficient income sources and specific funds to support these projects, citing fixed deposits of Rs 870 billion and revenue streams from development charges, property tax, and compensation. However, skeptics, including Milind Mhaske of NGO Praja and a former BMC commissioner, question the alignment of these projects with citizens' needs. They raise concerns about the focus on car-centric projects and substantial spending on a desalination plant without mandating rainwater harvesting for all. The opposition points out that many projects were initiated after the corporators' term ended in March 2022, limiting scrutiny. Former Congress corporator Ravi Raja questions the administrator, noting that BMC's substantial fixed deposits are allocated to various commitments, making it challenging to fund extensive capital expenditures without affecting other liabilities.

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