BMC reserves fall to Rs 77,905 crore as infra commitments reach Rs 2.34 lakh crore

The Brihanmumbai Municipal Corporation’s fixed-deposit reserves fell by Rs 3,544 crore over eight months to Rs 77,905 crore, according to its latest quarterly financial report, raising questions about how the civic body will fund its expanding infrastructure programme.

The reserves stood at Rs 81,449 crore in February, when the civic budget was presented, and Rs 91,690 crore in 2021. The latest figure represents a decline of nearly Rs 13,800 crore over five years, reported The Indian Express.

The reduction comes as the civic body carries infrastructure commitments and project liabilities estimated at around Rs 2.34 lakh crore.

Not all the reserves can be used for infrastructure expenditure. Under the BMC’s rules, only around half can be allocated to infrastructure projects, while the balance is tied to obligations including employee pensions, gratuity and contractors’ security deposits.

A civic official quoted by The Indian Express warned that continued pressure on the reserves and the scale of the infrastructure programme could create a liquidity crisis in the coming years if expenditure and liabilities were not controlled.

The official also said the BMC was unlikely to face a financial crunch in the current year, citing higher property-tax collections and increased premium income from the building-proposal department.

The civic body is considering raising at least Rs 10,000 crore through green bonds to finance major infrastructure projects.

The proposed fundraising could support wastewater-treatment facilities at Dharavi, Versova, Bhandup, Ghatkopar, Bandra and Malad, as well as proposed desalination plants, two water-tunnel projects and the Gargai dam.

The projects form part of Mumbai’s longer-term efforts to increase water availability, improve wastewater management and strengthen urban infrastructure.

The fall in reserves does not itself establish that the BMC is facing an immediate cash-flow crisis. However, the figures highlight the financial challenge of sustaining a large infrastructure programme while meeting existing liabilities and maintaining sufficient liquidity.