The financial ill-health of the municipal corporation has now begun to create a roadblock for the development works in the city.
The financial ill-health of the municipal corporation has now begun to create a roadblock for the development works in the city. Senior civic officials said that the finance department of the corporation, which recently released a circular announcing measures to be taken to bring down establishment costs and increase revenue sources, has put the clearance for many proposed infrastructure projects in the city on hold.
The civic administration has asked the head of various departments to postpone taking up new projects unless unavoidable. The officials added that the worst affected by the downturn was the road department. Proposals for concretisation and asphalting of several road stretches have been put on the back burner.
The finance department has been holding back clearance for these files. “The BMC cannot afford to allocate funds for new works until its financial position shows revival signs,” an official said.
Ongoing road projects have also been affected. The finance department has postponed issuing payments for road projects worth Rs900 crore. “Funds had not been set aside for these projects during the fiscal exercise. These projects were introduced in the form of variations of budgeted for works. The payments will now be made during the next year. We hope the financial position improves by then,” another official said.
Even as road department officials were hoping that this delay in payments wiil not affect the pace of the work, insiders suggested that the morale of the contractors was likely to be affected by the decision. Projects for widening of the drains as a flood relief measure and water supply projects proposed to improve distribution were among the others likely to be affected by the financial downturn.
The recessionary trend and increase in salaries have pushed the richest municipal corporation towards financial instability. While the recessionary trend has led to a significant dip in income, the increase in salaries have caused establishment costs to rise by Rs1,800 crore. The civic body has already proposed measures to bring down establishment costs.
To boost revenue supplies, it is also exploring new sources of income. It has decided to demand 50% share in professional tax, stamp duty and registration fee. To keep ongoing development works on the front foot, the civic administration is also considering the option of private participation. It has also sought state government’s permission to mobilise loans worth Rs2,000 crore.
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