If functions and finances of the Municipal Corporation of Greater Mumbai (MCGM) are to be matched, the MCGM’s annual budget should be in the region of Rs. 80,000 crores. At the current juncture, it is capable of meeting merely a little more than one-third of its obligations.
The Municipal Corporation of Greater Mumbai (MCGM) is frequently cited in discussions as the richest municipal body in India. It is also underlined that its budget (Rs. 27,258 crores in 2018-19) is larger than many States of the country. There is no eulogy intended in both these observations. Critics highlight these facts to prove that MCGM is the rich, bad boy. It earns a whopping sum every year, but, in return, gives its citizens rundown infrastructure — the very infrastructure for which it collects that kind of obscene money. What does it do with all that cash is the question. And the unequivocal answer is that it pilfers and wastes. If that kind of money were put to good use, Mumbai would have shone as a bright star among the assembly of cities.
The purpose of this article is not to contest the critics’ appreciation of the Mumbai situation. The question that we seek to answer is that if none of the accusations of inefficiency and graft were true and if the MCGM were a sparkling, clean organisation, could it satisfy the citizens’ infrastructure expectations if it put every rupee it earns to the best civic use possible? Let us try and answer this question.
First, let us look at the functions the MCGM performs. Among its core jobs are water supply and sewerage, solid waste management, construction and maintenance of roads, footpaths, bridges, foot over bridges, storm water drains, installation and maintenance of street lights, traffic lights, signage and other traffic related services. MCGM also runs the city’s bus system along with the distribution of power. MCGM provides 1,038 primary schools in Mumbai in eight languages and provides free education to 266,000 students. It runs 149 secondary schools, 17 for the differently-abled, two colleges and provides free bus service to MCGM students. It provides libraries, reading rooms, nursery schools and social welfare centres. Slum improvement and urban poverty alleviation are its bounden duties; so is the promotion of art, music and culture. MCGM offers a range of health facilities. It prevents dangerous disease, delivers primary health care, runs medical colleges, three dozen hospitals and mother and child health centres. It provides fire services to the city. It builds and maintains public gardens, public monuments, play grounds, stadia, swimming pools, theatres, art galleries and the zoo. MCGM builds and maintains markets, slaughter houses, the Deonar Abattoir and places meant for the disposal of the dead. It plants trees and looks after the city’s ecology. It also provides parking lots, public toilets and dust bins.
Through its Development Plan (DP), MCGM acquires land for the construction of hundreds of fresh amenities for the rising population, including gardens, schools, health facilities, women’s’ hostels, skill centres, adhar kendras, care centres, hostels for boys and girls, old-age homes, shelters for the homeless and veterinarian facilities. It also runs a disaster management centre and is building a textile museum.
On the regulatory side, MCGM registers births, deaths and marriages, gives building permissions, pulls down unauthorised structures and regulates street hawking. It carries out population census and looks after the heritage of the city. It registers all shops and businesses and protects its facilities through an in-house security organisation. We may omit to mention others for lack of space. No other urban local body in the country matches the sea of municipal services delivered by MCGM.
Let us now see what money it needs to do these activities. The High-Powered Expert Committee (HPEC), appointed by Government of India (GoI) for estimating investment requirements for urban infrastructure, took a basket of only eight major services (water supply, sewerage, solid waste management, roads, storm water drains, transport, traffic support services and street lighting). It looked at the existing service backlog and GoI’s service benchmarks for each service. The HPEC submitted its report in March 2011 and based its estimates at 2009-10 prices. It worked out the average per capita investment cost of Rs. 47,772 and a per capita maintenance cost of Rs. 3,627 for the eight cited sectors for cities above five million population. The investments were to be made over a 20-year period and the maintenance costs were annual.
Since these prices are almost a decade old, and we are now making an estimate for 2018-19, it should be acceptable that we double the estimates to accommodate the rise in costs over a decade. This would work out to an average per capita investment cost of Rs. 95,544 and a per capita annual maintenance cost of Rs. 7,254 for the eight cited sectors. To work out total costs, we also need an idea of Mumbai’s current population. The demographic data of Mumbai arrived at through Census 2011 was 12.44 million. Let us assume that Mumbai’s population now stands at 13 million, a reasonably justifiable number.
Based on these figures, the investment needs of Mumbai at the level of services determined by GoI for the eight cited sectors comes to Rs. 1.24 lakh crores or Rs. 6,210 crores annually. We then turn to the Development Plan of Mumbai. Please bear in mind that the implementation of the DP is the key to the city’s quality of life. The DP team estimated that Mumbai would require Rs. 14.15 lakh crores (at 2013-14 prices) to implement the DP 2034 over a twenty-year period. Five of the 20 years have gone. Even if it is optimistically assumed that land-based instruments would take care of 80 percent of land acquisition cost, MCGM still needs to put aside a minimum annual sum of Rs. 23,112 crores at current costs to implement the plan.
There are other significant services that MCGM is expected to provide that were not considered by the HPEC. These comprise education, health, fire services, hospitals, gardens, heritage and many more. A conservative calculation for the provision of these additional services puts the annual estimate at about Rs. 7,000 crores. This means that against a total requirement of approximately Rs. 36,322 crores of capital investment, MCGM has been able to provide a mere Rs. 10,115 crores or 27.5 percent of the capital obligation. Add to this salaries, administration, regulation and infrastructure maintenance costs. These expenditures have been put at Rs. 17,723 crores in the 2018-19 budget. Out of these, salaries, administration and regulation costs have to be per force fully accounted for. These add up to a total of Rs. 13,575 crores leaving a paltry amount of Rs. 4,129 crores for all maintenance. In reality, this amount would cover only 44 percent of the maintenance cost of the eight core infrastructures.
In sum, if functions and finances of MCGM are to be matched, the MCGM’s annual budget should be in the region of Rs. 80,000 crores. At the current juncture, it is capable of meeting merely a little more than one-third of its obligations. MCGM is clearly burdened with what we may term a huge ‘unfunded mandate’. Common sense would tell us that if you have too much on your plate that you cannot handle, drop some of them and concentrate on the vitals. It would be fair, therefore, to determine which of the functions the MCGM should drop. This would be nearly one-half of its current functions. Let wise Mumbaikars engage in this exercise of abandonment.
We may also point out that the present pillars of MCGM’s earnings are through State compensation towards abolition of octroi (35 percent), property tax (22 percent) and premiums (16 percent). Please remember that the Government of Maharashtra’s finances are not in the pink of health. If the State regressed to a position where it fails to compensate the MCGM, there would be a further fall in infrastructure services by 35 percent. But no worries. Remember the much vaunted “Spirit of Mumbai”? We’ll survive!!
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Dr. Ramanath Jha is Distinguished Fellow at Observer Research Foundation, Mumbai. He works on urbanisation — urban sustainability, urban governance and urban planning. Dr. Jha belongs ...Read More +