Fearing abolition of octroi and its replacement with the goods and services tax from next financial year on, Shiv Sena leader in the BMC Yashodhar Phanase said the civic body might have to part with some of its important portfolios as it will be impossible to keep them with fewer funds.
Fearing abolition of octroi and its replacement with the goods and services tax from next financial year on, Shiv Sena leader in the BMC Yashodhar Phanase said the civic body might have to part with some of its important portfolios as it will be impossible to keep them with fewer funds.
The Octroi accounts for a sizeable chunk of the Brihanmumbai Municipal Corporation's annual revenue and was expected to fetch Rs7,300 crore to the BMC this year. However, this year only Rs5,500 crore has been collected from Octroi, owing to a fall in global oil prices. Almost Rs4,000 crore of the total octroi amount comes from oil refineries.
Though Phanase did not mention any particular portfolio, portfolios like the BMC's secondary education and secondary and tertiary healthcare services are not part of civic body's primary duty. They actually comes under the state government but expenses are borne by the civic body.
That fear is playing on the minds of the civic administration. Anticipating the abolition of octroi in 2016 and a low collection this year, the BMC is likely to announce a shoestring budget for the fiscal year 2015-16 today.
The goods and services tax (GST) Bill, 2014, was tabled in December last year. If that happens as planned, BMC's independent source of revenue Octroi will be abolished form next year on and the union government will extend financial help to the state government, which will, in turn, pass on the aid funds to the BMC for a period of five years.
This handing-over of funds is likely to be bogged down in administrative delays for at least two years, the BMC might face a collective deficit of Rs15,000 crore," said Yashodhar Phanase, BMC's standing committee chairman.
The standing committee chairman said in such as case, "The BMC might have to increase property tax and the premium collected from fungible FSI to make up for the lost amount." He added that about Rs2,500 crore is generated from the two sources currently.
The state government is also planning to hike rates from fungible FSI.
Meanwhile, opposition parties are saying that the BMC should spend its allocated funds every year, before clamouring for additional funds. BMC could not spend nearly 70% of its budget for the recently-concluded financial year.
A sneak peek at this year's budget (all figures approximate):
Rs300 crore may be allocated for the coastal road project
Rs200 crore for constructing the Goregaon-Mulund link road
Rs3,000 cr for the roads department
Getting licenses for opening new shops and establishments is set to get easier.
The number of beds in the BMC-run Shatabdi and Rajawadi hospitals may be increased.
Transport cess
Solid waste management cess
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