The Brihanmumbai Municipal Corporation's worst fear is the abolition of octroi, which accounts for a sizeable chunk of its revenue. That fear is playing on the minds of the civic body's accountants. Anticipating the abolition of octroi in 2016, BMC is likely to announce a shoestring budget for the fiscal year 2015-16.
The Brihanmumbai Municipal Corporation's worst fear is the abolition of octroi, which accounts for a sizeable chunk of its revenue. That fear is playing on the minds of the civic body's accountants. Anticipating the abolition of octroi in 2016, BMC is likely to announce a shoestring budget for the fiscal year 2015-16.
The possible abolition of octroi in 2016 and its replacement with the goods and services tax was announced late last year by the union government. If that happens as planned, the union government will extend financial help to the state government, which will, in turn, pass on the aid to the BMC for a period of five years.
If this handing-over of funds is bogged down in administrative delays, the BMC will be hard up, said Yashodhar Phanase, BMC's standing committee chairman.
Phanase said that in this 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.
Phanase visualised a worst-case scenario in which the BMC might have to give some of its portfolios to the state, as it will be impossible to keep them with a reduced budget.
The Shiv Sena leader said that his party will fully oppose the abolition of octroi, and demanded that the state government should lead a delegation to the union government to explain how abolishing octroi is not in Mumbai's interest. It is noteworthy that the Sena, which shares power in the state government, has a rocky relationship with its coalition partner the Bharatiya Janata Party.
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.
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