With the civic body’s liabilities soaring to highs of Rs 2.44 lakh crore, marking a jump from Rs. 2.32 lakh crore from the previous fiscal year, The Brihanmumbai Municipal Corporation’s budget announced on Wednesday lay special focus on revenue augmentation. In what marks its first foray into bonds, the BMC is eyeing to raise municipal green bonds to finance its sustainable infrastructure such as waste water treatment and desalination plants.
According to the civic budget, of the total liability of Rs 2.44 lakh crore, Rs 2.13 crore is tied to various infrastructure projects, while the remaining Rs 31,406 crore has been earmarked for essential works across other civic departments.
Raising green bonds for its projects is among one of many initiatives announced in the budget aimed towards shoring up BMC’s finances.
Speaking during the budget presentation, BMC commissioner Bhushan Gagrani on Wednesday said that the civic body is contemplating the possibility of raising funds through bonds as it receives incentives from the government while also ensuring the funds remain tied to the project.
Civic sources said BMC intends to raise funds, somewhere between Rs 5,000 – Rs 10,000 crore through bonds.
“If you raise money through bonds for a certain project, it ensures that the funds are tied to use on the project and only ensuring fast works by preventing diversion to other projects. Raising funds for sustainable projects gives a boost to BMC’s image while ensuring Mumbai’s carbon credits in the future will improve,” said Gagrani.
The new venture of green bonds, aimed at achieving Mumbai’s climate action plan goals, comes on the heels of Union Finance Minister Nirmala Sitharaman announcing a Rs 100 crore incentive for a single municipal bond issuance in the Union Budget of 2026-27.
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To rake in funds for its major capital projects, the BMC has also charted plans to monetise its revenue generating assets through Infrastructure Investment Trusts (InvITs). According to officials, the InvIT system will own and operate income generating infrastructure assets such as roads, markets, parking lots and other commercial spaces to raise funds from retail and institutional investors without adding debt.
Eyeing to rake in an annual revenue of Rs 400 crore – Rs 500 crore, BMC has outlined plans to collect entertainment tax, which were previously levied by the state government. However, with an amendment to the Maharashtra Entertainment Duty Act, now entrusting local authorities to levy the tax, the BMC has submitted a proposal before the Urban Development department calling for entertainment tax collection.
BMC has sought to levy water and sewerage charges on unmetered properties with a carpet area of less than 500 square feet. Previously, these charges were included in property tax bills which were later issued. While officials maintained that the revival of charges are unlikely to raise revenue, the BMC is set to frame a comprehensive policy to apply water and sewerage charges based on the average daily water consumption survey of residential flats without water meters with a carpet area under 500 square feet.
Over the past year, BMC has taken efforts to auction plots across three locations including Chhatrapati Shivaji Maharaj market, Asphalt plant in Worli and a Lower Parel plot. Together, these projects are estimated to raise funds to the tune of nearly Rs 2,500 crore.
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Efforts to boost its financial health have come at a time when the BMC’s capital expenditure has touched an all time high at Rs. 48,164 crore, accounting for 60 percent of its annual budget for FY 2026-27. This marks a jump from the previous fiscal year when 58 percent of the total budget was accounted for by capital expenditure which stood at Rs. 39,159 crore.
At a time when funds for capital-intensive projects account for a lion’s share of the expenditure, BMC’s reserve funds have witnessed a marginal dip this year as well. The civic body’s reserves in fixed deposits stand at Rs 81,449.32 crore at present, of which Rs 44,826.23 crore is committed to liabilities such as provident fund, pension fund, gratuity, and security deposits from contractors. Last year, BMC had fixed deposits of Rs 81,774.42 crore.
