Political parties realign in quest for BMC ahead of crucial civic polls

As Mumbai votes after nine years, the ₹74,000-crore BMC budget-bigger than many states-puts fiscal strength, infrastructure gaps and poll promises under sharp focus

After the Bharatiya Janata Party (BJP) lost to the Congress in Uttarakhand’s first Assembly elections in 2002, a senior BJP leader had remarked: “What a big deal? Even BMC (Brihanmumbai Municipal Corporation) has a bigger budget than Uttarakhand’s.” 

Though it was political rhetoric, his comments were not completely off the mark. Even now, the size of Uttarakhand and BMC budgets are almost the same. The BMC has pegged the size of its budget at ₹74,367 crore for 2025-26 (FY26), while Uttarakhand has projected it at ₹75,170 crore. Further, the BMC’s budget is pegged higher than that of Haryana, Goa, and the Northeastern states (barring Assam) for FY26. 

Elections to the country's richest local body will be held on January 15 after nine years, a delay of four years as court cases dragged on over proposals to change the number of wards and to incorporate quota for other backward classes (OBCs). 

The equations between the parties fighting for control of the BMC have changed drastically in the runup to the polls: The Nationalist Congress Party led by Ajit Pawar is not a part of the BJP-Shiv Sena (Shinde) alliance, while the Congress is not present in the Maharashtra Navnirman Sena (MNS)-Shiv Sena (UBT) combine, which saw cousins Raj Thackeray and Uddhav Thackeray uniting for the first time. 

Major talking points for the parties include monthly allowance for domestic workers (Shiv Sena UBT-MNS), ‘BEST  revival manifesto’ by the Congress, and the promise to make Mumbai a “global powerhouse” (Mahayuti). This promised combination of freebies and improving Mumbai’s infrastructure has been flagged by political parties and observers, even as BMC’s fiscal health remains sound. 

The local body’s capital expenditure has been exceeding its revenue expenditure for the past three years and there is a minor scope of increasing it since the BMC has been having a small surplus in its fiscal balance for the past nine years, at least.  Despite this, there are allegations of poor infrastructure in Greater Mumbai, which is the BMC’s domain.  Additionally, there are complaints of potholes in the region. However, this kind of repair work comes under revenue expenditure, as part of operation and maintenance, and not capital expenditure. This head is projected to get ₹6,227 crore in FY26, constituting 14 per cent of revenue expenditure. 

The freebies being promised would raise subsidies, subject to implementation of poll promises. Subsidies along with revenue grants and contributions is projected to account for five per cent of revenue receipts in FY26. 

Octroi used to be the biggest source of own tax revenue of the BMC. Even when it was there for only three months in FY18 due to the introduction of the goods and services tax (GST), it still constituted six per cent of revenue receipts of the local body.

Over the years, the share of capital receipts has zoomed past 40 per cent of the total receipts. However, 30 per cent of this comes from contribution from the revenue surplus.