India’s richest civic body’s reserves shrink by Rs 3,544 crore in 8 months

The Brihanmumbai Municipal Corporation (BMC) has seen a decline of Rs 3,544 crore in its reserves over the past eight months, according to the latest quarterly financial report. This reduction is attributed to the civic body's massive infrastructure project liabilities, including a Rs 2.34 lakh crore obligation. The reserves, currently held as fixed deposits in multiple banks, amount to Rs 77,905 crore as per civic records.

In comparison to the budget presented in February, which stood at Rs 81,449 crore, there has been a decline of nearly Rs 13,800 crore in five years.

Only half of the reserve can be utilized for infrastructure projects, with the remainder tied to fixed liabilities such as employee pensions, gratuities, and contractors' security deposits. A civic official stated that this means projects, which are nearly four times the usable amount, may lead to a liquidity crisis in the next few years if expenditure control and liability management are not addressed.

Property tax collection and premiums from the building proposal department have increased, preventing a financial crunch this year. However, officials warned that without careful expenditure management and liability control, the situation could deteriorate.

The BMC's funds are allocated to various funds, with Rs 2,100 crore in the Infrastructure Development Fund and Rs [5,5648] crore in the Special Project Fund. An additional Rs 1,033 crore is set aside for maintaining Mumbai's green cover. The civic authorities plan to raise at least Rs 10,000 crore through green bonds, with projects such as wastewater treatment facilities, desalination plants, water tunnel projects, and the proposed Gargai dam among the intended uses.