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BMC FACES A CASH CRUNCH WITH SHARP FALL IN REVENUES

babusAn acute shortage of water is not the only crisis staring the city in its face. A slowdown in civic projects and rise in charges for civic services are not being ruled out. That is because the country’s richest municipal corporation is running short of funds. The global slowdown and an increase in salaries of employees after implementation of the sixth pay commission have left a large hole in the civic coffers. While the recessionary trend has led to a significant dip in octroi collections, the MCGMs single largest source of revenue, the increase in salaries has caused establishment costs to rise by nearly Rs1,800 crore. A slowdown in the construction industry caused a dip in collection of development charges, scrutiny fee for construction projects, and premiums. Fearing financial instability, the BMC, which has an annual budget of Rs19,000 crore, has issued 16 guidelines suggesting reforms to avert a full-blown crisis. Departments have been asked to avoid taking up new projects. Heads of department have also been told to postpone non-critical and discretionary projects. Landscaping and beautification works are among the discretionary projects, civic officials said. Civic officials have been asked to increase the efficiency of revenue collection and look at new sources of revenue. They have been told to recover charges against illegal construction, dumping of debris, and illegal hawking. Officials have been asked to expedite the recovery of arrears in payment from the state government as well.

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