BMC Budget 2022: What’s in store for citizens?

A webinar organised by Mumbai First and The Blue Ribbon Movement discussed citizen participation in the BMC budget and the importance of local governance.

On 12th February, a webinar organised by civic organisations Mumbai First and The Blue Ribbon Movement discussed the Brihanmumbai Municipal Corporation’s (BMC) civic budget for 2022. Questions surrounding scope and allocation highlighted the need for citizen participation in policy making.

Moderated by Abhishek Thakore, co-founder of The Blue Ribbon Movement, the panel consisted of experts, journalists and grassroots workers, with years of expertise on the functions of the BMC, its historical trends and practices. 

The panellists were Chaitanya Marpakwar, a journalist for The Times of India, whose work covers civic and political issues in Mumbai, Ravikant Joshi, an expert on urban finance and management, Abhay Kantak, who has 16 years of experience in the consulting and advisory space of urban practices, and Srinivas Alavilli, head of the civic participation team at Janaagraha, an organisation that strives to increase citizen participation in local governance.

Shortcomings of the budget 

“The BMC budget is not only a financial instrument but also a political one,” said Chaitanya Marpakwar. The budget for this year is a 17% increase from the last, at Rs 45,000 crore. “Capital expenditure, meaning developmental projects like roads, bridges and other infrastructure is estimated at 49%, and revenue expenditure, meaning revenue-generating government assets like public transport, etc, is at 51%,” he added.

“The city budget dictates our life. The union and state budget are important, but the third tier of governance, the local bodies, are the closest political body to the citizens. Every action of the local government affects everyone directly. It determines everything, the water you drink, how you go to work, your quality of life and even how happy you are living in that city. A city rich in resources and infrastructure like Mumbai should think about what its people want first.” said Srinivas Alavilli.

On water supply, according to Abhay Kantak, the G budget, allocated to water supply and sewerage, is planned in a way that all revenue generated is put back into the function of sanitation facilities. This often doesn’t materialise. Not enough revenue is generated for new projects, and we rely on external loans from the state budget. BMC’s income estimates show that its earnings remain dependent on state grants, followed by Property Tax and Receipts from the Development Plan Department. Abhay Kantak mentioned the disproportionate cost of water in Mumbai as compared to the quality of water facilities. “70%-80% of the water bill goes to the sewerage department, which is very poorly managed in reality as compared to the revenue it generates,” he said.

On open spaces, Chaitanya pointed out gaps in the allocated budget. “Budget for garden department maintenance has drastically decreased, this shows misplaced priorities in terms of the citizens’ mental and physical health. Internal loans worth Rs 5000 crore to Rs 10,000 crore have been taken from special reserve funds to build the coastal road, the Goregaon-Mulund Link road and other unnecessary projects. Inordinate importance has been given to road infrastructure,” he said.

The budget this year exempts property tax for people owning houses smaller than 500 sq ft. Commenting on this, Chaitanya said, “People owning bigger homes will soon be paying a lot more in property taxes. The state levies taxes in discreet ways, fire service fees, garbage disposal fees etc. This tax money is passed off as service charges to avoid accountability. Citizens should be made aware of a complete breakdown of the taxes they pay.”

“This year’s budget is unrealistic,” said Ravikant Joshi, who finds that the budget document is not accessible to the common citizen. “The annual growth rate of the BMC has been 5% for the past 6-7 years, and this year’s revenue is estimated to increase by 20%, for which there is no supporting argument or change in revenue expenditure,” he added.

What the BMC is doing right 

Despite criticisms and calls for accountability, the BMC has made some great strides. 

“The Brihanmumbai Electric Supply and Transport Undertaking (BEST) works with the BMC, which is something unique to Mumbai. No other city governs its own transport system. Doing this provides better services, allows active citizen participation, faster problem resolution and an understanding of the workings of the city. BEST doesn’t need to rely on the state budget to function, which is great,” said Srinivas. Rs 800 crore has been allocated to BEST in this year’s budget. 

On the city’s Covid management, which was lauded by the Supreme Court in 2021, Srinivas said, “Mumbai’s Covid management was phenomenal. This year, 15% of the budget has been set towards healthcare, this shows that the BMC has learned lessons from the shortcomings of its public healthcare infrastructure. Health needs of marginalised communities have been prioritised.”

To deal with the city’s vehicular congestion, establishing the Mumbai Parking Authority will be an important step. “In Mumbai, the state of public transport makes owning a private vehicle a more convenient option. But the parking authority will regulate parking fares and parking infrastructure across Mumbai to hopefully bring in more revenue and improve parking facilities. Of course, a lot more needs to be done for public transport in Mumbai, but it shines in comparison to other cities” said Ravikant.

Some expenses not accounted for

According to Ravikant, healthcare is a state function, and not a city’s responsibility. Mumbai is the only city that has budgeted such a large amount for health. This may be unfair to taxpayers, as a large chunk is already accounted for in the state budget every year. This is worrisome, because health services get no revenue. 

Read more: Mumbai NGOs release manifesto to transform public health – will parties listen?

He further explains Mumbai’s below-average economic growth rate, which is at a mere 7% as compared to the national average for metropolitan cities which is 10-12%. “Our expenditure is in a low equilibrium trap and revenue surplus is at a halt, despite Mumbai’s high property tax rate.

To this, Chaitanya said, “The BMC is making a Rs 165 crore cycling track and building underground water storage tanks in flood-prone areas worth Rs 160 crores. Each area gets a Rs 1.5 crore local area development fund, with no jury in place to control where that money is spent. Rs 500 crore just goes into unplanned expenses. On-ground budget implementation needs to be looked at carefully by other civic organisations. Malpractices also happen quite often – some contractors use 3 different funds (local funds, corporation’s funds and state funds) to carry out just one project.”

Participatory budgeting and managing revenues 

Panellists discussed a more effective alternative to the traditional form of budgeting, participatory budgeting, which empowers citizens to discuss the implications of government decisions. The Pune Municipal Corporation (PMC), for example, invites suggestions from citizens on civic issues they would like to see included in the budget. This is currently lacking in Mumbai, with no accessible provisions in place for people to take ownership of their neighbourhoods and demand improvements.

“Each ward should get a share of the city’s budget,” said Srinivas Alavilli. “A missing ward committee in each ward is enabling wasted funds. The absence of these is not the right spirit of decentralisation. Mumbai should lead as an example for other cities.” he added.

“In South Mumbai, a surcharge of 20 paise was levied on electricity bills that were later used for working BEST buses. This is a great source to generate revenue, and this surcharge should be applied not only in South Mumbai but also in the entire Mumbai Metropolitan Region (MMR)” said Abhay Kantak.

“We should look at more creative ways to increase revenue. Advertising revenues in Mumbai are surprisingly low as compared to other big cities around the world. Higher advertising costs in public places would generate good revenue and even lessen unnecessary ad traffic.” said Chaitanya Marpakwar.

Final takeaways

According to Dr Joshi, the need to make the budget document simpler and more accessible to the common public is dire. Ward level audits of promises and implementation will hold the powerful to account and empower citizens to ask the right questions. “Pay the right price, but demand the best quality of life, as the city’s functioning directly affects one’s productivity and happiness,” he said.

Points about using the BMC’s autonomy to our advantage were raised. Strong local governance allows us to do a lot more for communities than what we are currently able to do.

Municipal corporation building in Colaba,
The annual budget of BMC is more than that of some of the small states in India. Photo: Wiki Commons Creative Commons Attribution-Share Alike 4.0

The discussion closed with final words from panellists about citizen participation in local governance.

“Corporators get a monthly honorarium of Rs 15,000 but spend crores on election campaigns. So it is evident that the fight is ultimately for power. The elections are the best time to convey a public opinion,” said Srinivas Alavilli.

“When an empowered citizenry meets an unempowered government, the outcomes are usually dysfunctional. Participate in civic decision making and fight for what you want,” said Abhay Kantak.

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