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DRAFT
THE WORLD BANK
DEVELOPMENT ECONOMICS DEPARTMENT
URBAN AND REGIONAL ECONOMICS DIVISION
URBAN AND REGIONAL REPORT No. 76-13
URBAN PUBLIC FINANCES IN DEVELOPING COUNTRIES:A CASE STUDY OF METROPOLITAN BOMBAY
FRANCINE BOUGEON-MAASSEN(Consultant)
August 1976
These materials are for internal use onlyand are circulated to stimulate discussionand critical comment. Views are those ofthe author and should not be interpretedas reflecting the views of the World Bank.References in publications to Reportsshould be cleared with the author toprotect the tentative character of thesepapers.
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FOREWORD
This is one of a series of case studies of the public finances of
urban governments in less developed countries. These studies, designed to
be as comparable as the local conditions and availability of information
permit, are meant to provide (a) an understanding of the operation of
finance systems in cities of developing countries; (b) a formiat for
describing and analyzing these sytems; (c) a menu of major problems facing
these governments; and (d) a set of data which may be used to establish
comparative norms against which aspects of performance or problem severity
of urban governments generally may be evaluated. It should be emphasized
that, although each case study contains a section on conclusions and policy
implications, the primary goal is not to offer a program of detailed fiscal
reform for individual cities. Rather, it is to provide the beginnings
of an analytic and informational base which will permit such judgements to
be made on a consistent basis and with increasing confidence over time.
All but a very small portion of this work was carried out as a
World Bank Research Project (670-70) under the direction of Professor Roy
Bahl, of the Metropolitan Studies Program, The Maxwell School, Syrcause
Univrsity, and Mr. Johannes Linn, of the Urban and Regional Econamics
Division of the World Bank. The overall project includes case studies
of ten cities, eight of which were conducted under Research Project 670-70:
Ahmedabad and Bombay, India; Cartagena and Bogota> Colombia; Jakarta,
Indonesia; Kingston, Jamaica; Seoul, Korea; and Tunis, Tunisia. In
addition, case studies on Lusaka, Zambia, and on Manila, the Philippines,
were prepared as separate, but related efforts. In the final phase of
- 11 -
this research a set of papers will be prepared on major urban public finance
issues, comparing practices and experiences in these ten case cities, as
well as others for which comparable information exists.
This case study of the Public Finances of Metropolitan Bombay
is an outgrowth of field work carried out in 1973 by Professor Babl and
Francine,Bougeon-Maassen.
Douglas H. KeareUrban and Regional Economics DivisionDevelopment Economics Department
- iii~ -
Research Staff
Roy Bah1 and Johannes Linn have been responsible for the final
editing of all papers issued under--or in association with-this project,
ensuring accuracy and consistency, etc.; however, a large number of other
persons have been involved in their production:
Detailed Case Studies Principal ResearchArising out of RP0270 - Researcher (s) Assistant (s)
Ahmedabad Ray Bahl., Douglas Keare Michael Wasylenko,Tamar Katz
Bombay Francine Bougeon-Maassen, Michael Wasylenko,Roy Bahl Tamar Katz, Carlos
Noble, Mark Gellerson
Bogota Johannes Linn, Roy Bahl Michael asylenko,Carlos Noble, TranThan Dang
Cartagena Johannes Linn, Roy Bahl Tran Than Dang, CarlosNoble
Seoul Roy Bahl, Douglas Keare Ewang Mtong Chan,Michael Wasylenko,Tamar Katz
Jakarta Johannes Linn, Roger S. Smith,Hartojo Wignjowijoto, 'RoyBahl
Kingston Francine Bougeon-M:aassen,Johannes Linn, Roy Bahl
Tunis Remy Prud'homme
Limited Case Studiesof Other Origins
Lusaka Robert Saunders
Manila Roy Bahll, Pamela Brigg,Roger S. Smith
1/ Roy Bahl, who is principal consultant on this project is the Director, Metro-politan Studies Program, The Maxwell School. Douglas Keare, Johannes Linn,and Pamela Brigg are World Bank staff members; as is Robert Saunders, thoughhis input to this project occurred on a consultihg assignment. Remy Prud'homme,Francine Bougeon-Maassen, Roger S. Smith. and Hartodo Wignjowijoto have servedfor more limited periods as consultants to the Worla Banh.
-iv-
Urban-Regional Economics Division
Urban Public Finance Project Case Studies
Paper No. Title Author
1 Urban Public Finances in Developing Countries: Roy Bahl
A Case Study of Metropolitan Ahmedabad
2 Urban Public Finances in Developing Countries: Johannes Linn
A Case Study of Metropolitan Cartagena
3 Urban Public Finances in Developing Countries:. - Roy Bahl and
A Case Study of Metropolitan Seoul Michael Wasylenko
4 Urban Public Finances in Developing Countries: Remy Prud'hommeA Case Study of Metropolitan Tunis
5 Urban Public Finances in Developing Countries: Roy Bah,d
A Case Study of Metropolitan Manila Pamela BrigG and
Roger S. Smith
6 Urban Public Finances in Developing Countries: Francine Bougeon- ---
A Case Study of Metropolitan Kingston Maasen and JohannesLinn
7 Urban Public Finances in Developing Countries: Johannes Linn, Roger
A Case Study of Metropolitan Jakarta S.Smith and HartojoWignjowijoto
8 Urban Public Finances in Developing Countries: Francine Bougeon-
A Case Study of Metropolitan Bombay Maassen
Table of Contents (Continued)
Page No.
V. REVENUE STRUCTURE AND TRENDS ............................... .110
A. Revenue Authority ............. .... .... 110
1. Property Tax Powers ................................... 1102. Tax on Vehicles and Animals ......................... 1103. Theater Tax ..........................
11214. Octroi .............................. . . . . . . . 112
B. Trends in Revenue Growth ..................... .. . 113
VI. PROPERTY TAXES ............................................ 12)4
A. Introduction ......................... 124
B. Property Tax Base ........... ........ ................ 124
C. Exemptions ........ 129
1. Exemptions from the General Rate .......... ... 1292. Exemptions from Municipal Sertice'Taes ...... 1363. Exemptions from the Municipal Education Cess ....... 1374. Exemptions from the Government Service Taxes ....... 137
D. Percentage Rate Structure ........... 138E. Growth in Assessed Value ................................ 141
F. Assessment Method ................................. 15
1. Residential Properties ,..................... 12. Non-Residential Properties ......................... 160
G. Administration of the Property Taxes .................... 165
VII. INTERGVER10NTAL GRANTS .............. 6..0...... ........... 180
A-. Historical Importance ................................... 180
B. Forms of Intergovernmental Assistance tane.180
C. Intrastate Aid Distribution ............................ 18APPENDIX I: Government Financial Assistance to Municipal
Councils in the State of Maharashtra 189APPENDIX II: Government Financial Asistance -to the Zilla
Parishads and the Village Panchayats ........... 193
TABLE OF CONTENTS
Page No.
I. INTROUCTION .......................... ******.... 1
II. ADMINISTRATTON AND ORGANIZATION OF THE CITY OF BCNBAY ........ 3
A. General Overview ........................ ******** 3
B. The Legislative Branch ............... ............ 5
1. The House .. ...... .. . ... . . .... * .. ..* 9 a . 600
2. The Camnittee System ...... .. . ....... .. . . . . 8
C. The Executive Branch'......... ................... * 9
2. The Administrative Organization of BD ....... 92. BEST Organization ....... o ......................... 19
3. Civil Secretariat and Municipal Audit -.......... .. . 21
III. FISCAL STRUCTURE AND BUDGETINM ............................. 22
A. The Assignment of Functions.................... 22
B. Expenditure Responsi'bility of the BM ................... . 27
C. Borrowing Powers ..... . . . .............. 32
D. Budgetary System .............................. 34
1. - Budgetary and Accounts Documents 342. Budget Documents . .......... 3
3. Annual Accounts .... ........ 36
4. Administrative Reports ............................. 375. Structure of the Budget Documents .................. 376. Budget A ........ .............................. 437. Budget B ....................... *. .. . .. * 6 . 5
8.- B udget E .. ... .. .. . ... .. . . . . . . . .. . .. . ... . .. .. .. 569. Budget C .................................. * * * .5
10. Special Funds ... .... ............... 56
11. BEST Special Funds ................................ 65
12. Budgetary Process ............................ 66
IV. EXPENDITURE STRUCTURE AND GROWTH AND CAPITAL FINANCING ....... 72
A. Expenditure Data ........... ...... . ......... . 72
B. Dpenditure Level and Trend ...... 73
C. Means of Financing Expenditures .................... 83
D. Financing of Capital Expenditures - BMC. 90
Table of Contents (Continued)
Page No.
VIII. EDUCATION FINANCE ............................. 196
A. Introduction ....................... 196
B. Primary Education .......... ...........................- 196
1. Services Provided .................................... 1962. Expenditures .......... ...*........................ 2033. Financing Methods ......... *................. . 2114. Municipal Fund Contributions ............ ..... 218
C. Secondary Education ..... . ......... ... . . .. . . ... . .. 218
1. Grants-In-Aid .................... ....... 2212. Budgetary Position of Secondary Education . ..... 225
D. Medical Education ........ . .............. . ... ........ 229
IX. HEALTH AND LF EXPENDIT S ..... o ... o ......... ...... 232
A. Health ..... . 0,.......S...'..... ... . . . . . . ... 232
1.: Scope of Services ........ ........ 2322-. Budgetary Position of Public Health Services ....... 242
B. Welfare . .o. . . 0 ......................... .. ...... 245
1. Welfare Centers and Nursery Schools ............... 2462. Scholarships ............................ 243. Health and Housing ............................... 274. Budgetary Operations ............................... 275. Welfare BEST ST. .......................... 250
I. HOUSING ....... ......... .............. ...................... 2 3
A. Present Housing Conditions .............................. 253
B. BMC Programs ... ..... o ..................... ... . ... 257
1. Employee Housing ...... ....... ................. 272. Slum Housing .....................................
2623. Slum Clearance Program ................. 2664. Slum Improvement Program ..................o....... 2755. Amenities Provided Under the Slu-m Improvement Program 2766. Budgetary Account of the Slum Improvement Program... 2787. Summary: BMC Slum Programs ...........os.......... 280
Table. of Contents (Continued)
Page No.
C. Bombay Building Repairs and Reconstruction Board . 283
1. Functions of the Board .............................. 2842. Means of Financing ................. ......... 287
XI. ROAD TRANSPORT ....................... ........... * 292
A. Road Network in Greater Bombay ............ 292
B. Responsibilities of the Corporation ..................... 294
C. Budgetary Account ...................................... 296
XII. WATER SUPPLY, SEWERAGE AND REFUSE CCTION ........ 297
A;.- Water Supply .. .... ............ 297
1. Nature of the System ............................... 2972. Expenditure Structure and Growth ................... 3093. Planning and Administrative Organization ........... 3114. Financial Position ................................. 316
B. Sewerage and Refuse Collection ........e.ti....o........ 324
1. Level of Services ......... .............. . . .... 322. Financial Situation ............................... 328
1111. BCNBAY ELECTRIC SUPPLY AND TRANSPORTATION UN TAKING ........ 336
A. Electric Suppl7 ....... ............................. 336
1. Services Provided. ....... 336
2. Budgetary Positzion ................................. 31
B. Transportation .................. .......... ....... 357
1 . S e r v i c e s P r ov i d e d . . . .. . . .. ..... .... 35 7
LIST OF TABLESPage No.
Table 1: Expenditure Responsibility in Greater Boay ............. 23
Table 2: Level of Bombay Municipal Corporation's Responsibilitiesin Expenditure Functions ............................. 26
'Table 3: Duties and Powers of the Municipal Authorities ........... 28
Table 4: Relative Importance of the Various Budgetary AccountsBased on 1971-72 Actuals .......................... 39
Table 5: Format of Budget A ........... ................... 44
Table 6: A Loan Works Budget A for the Purchase of Plant andMachinery (Division I) ... 0 .......... ........ *1
Table 7: Format of Budget B . .. g........................ ... 52
Table 8: Format of Budget E .................. ........... ....... 57
Table 9: Format. of Budget C ...... 59. .................. ....
Table 10: Comparison of Adopted and Approved Budget Estimates 67
Table 'l1: Expenditures by Function - Bombay Municipal Corporation . 7
Table '12: Per Capital Expenditures by Function - BVC' .............. 79
Table 13: Population - Greater Bombay ....................- 80
Table 14: Consumer Price Index: Greater Bombay ... 81
Table .1 : Percent Distribution of Expenditures by Function-BMC-1962, 1969, and 1971 .. ............................. 82
Table 16: Functions with Decreased or Increased Share Based onTotal Expenditures - BMC - 1962-1971 ................. 84
Table 17: Functions with Uecreased and Increased Functicas Based -on Current Expenditures - BMC - 1962-1971 .......... 85
Table 18: Functional Sources of Total Expenditure Increase-BM- 86
Table 19: Functional Sources of Current Expenditure Increase-BD-... 87
Table 20: The Financing of Expenditures - BM - 1962-1971 .. 88
Table 21: The Financing of Expenditure Increase-BMC-1962-1971 ...... 89
LIST CF TABLES (Continued)
Page No.
Table .22: Book Value of the Sinking Funds by Budget-MC .......... .93
Table z-23: Balances of Special Funds - BMC as of Mar,ch 31, 1972 ... 94
Table 24: Advances Made by Special Funds and Securities Heldin the Provident Fund - 1971-1972 ................ 95
Table 25: Borrowing Activities, BMC .............................. 96
Table .26: Total Borrowing. Percentage Distribution of theSource of Funds ........ ...... ............. 97
Table 27: Outstanding Debt - BMC ........ 98
Table 28: Outstanding Debt by Budget - BMC ....................... 99
Table 29: Borrowing Activities - Budget A - BM . ...... 100
Table 30: Borrowing Activities - Budget B - BMC ..............-.... 101
Table 31: Borrowing Activities - Budget E - BMC ............. 102
Table 32: Internal Funds Advances ... 108
Table 32a: Tax on Vehicles and Animals ........ 1
Table 33: Theater Tax .......... ............... . . . .112
Table 34: Revenue Structure and Trends in Revenues - BMC -1960-1972 ............. . . . . ... ... . . . . . 114
Table 35: Local Revenue Structure and Trends in Local Revenues -Percentage Distribution - BM 1960-1971 ...... 11
Table 36: Revenue Structure-and Trends in Revenues when BESTAccounts are Excluded - 1961-172 .......... 116
Table 37: Local Revenue Structure and Trends in Local RevenuesWhen BEST Accounts are Excluded ................... 117
Table 38: Municipal Revenues Per Capital - BM - 1960-1972 ....... 119
Table 39: Municipal Revenues Per Capita when BEST Accounts areExcluded - 1960-1972 ............................... 120
Table 4O: Tax Revenues - BMC - 1960-1972 ......................... 121
Table 41: Tax Revenues and Trends in Tax Revenues - PercentageDistribution - BMC - 1960-72.1..... . .. 22
LIST OF TABLES (Continued)
Table 42: Tax Revenues Per Capita - BMC - 1960-1972 ............. 123
Table 43: Property Taxes Liabilities by Major Types ofOwnership .............. g ... g .. a........ .... . 130
Table 44: Number of Properties Exempted from General Tax, Amountof General Tax Exempted and Estimates of RateableValue Exempted 1962,1971 .................. . 135
Table 45: Property Tax Rates as a Percentage on Rateable Value 139
Table 46: General Property Tax :Rates .... 140Table 47: Effective Rates of the Property Taxes .............. 142
Table 48: Property Rates by Valuation Value ......... 143Table 49: Rateable Value for Greater Bombay 1960-1972 . ..... 1Table 5o: Rateable Value Per Property Assessed - BMC -.. ......... 146
Table 51: Number of Properties and Rateable Value ... 147Table 52: Variation Among Wards in Selected Property Tax
Statistics ........................................ 1-88
Table 53: Percentage Distribution of Number of Properties byValuation Range .... ... .... 1. 149
Table 54: Summary Table - Percentage Distribution of PropertiesAssessed ........ ...... .. ............ ............ 151
Table 55: Total Number of Properties, Properties NewlyAssessed and Property Enlarged .................... 13
Table 56: Number of Properties Under Rent Control and OtherProperties by Ward - Greater Bombay ............... 17
Table 57: Rates Adopted to Property Used as Factories andWorkshops in Suburbs and Extended Suburbs .......... 161
Table 58: Rateable Value of Government Properties for theQuinquennium 1964-1969 ............................. 166
Table 59: Number of Properties and Sections in Bombay ........... 170Table 60: Tax Assessed and Collected in Respect with the Property
Taxes for the City 172
LIST OF TABLES (Continued)
Page No.
Table 61: Net Demand of Property Taxes and Tax OutstandingRelated to Unauthorized Holdings 175
Table 62: Taxes Assessed and Taxes Collected in Respect of
Government, Railways, and Bombay Port Trust
Properties ..................................... 177
Table 63: Outstanding of Municipal Property Taxes in 1971-72... 178
Table 64: Break-Up of Arrears of all Taxes as of April 1, 1972. 179
Table 65: Total Grants Allocated to the Bombay Municipal
Corporation and Grants on a Per Capita.Basis .... 181
Table 66: Government Grants to B ..... .............. 182
Table 67: Revenue Structure of the Municipal Corporations of
State of Maharashtra ... ................... 186
Table 68: Government Grants Per Capita by Category of Local
Authorities and Percentage Distribution of
Government Grants ............................... 188
Table 69: Primary Education - BMC ............................. 198
Table 70: Selected Statistics on Primary Education - BMC ...... 200
Table 71: Primary Education .................................. 201
Table 72: Education-BMC-Primary Education-Current Expenditures. 2o
Table 73:. Grant Per Student ................................... 206
Table 74: Primary Education - BMC - Current ExpendituresPercentage Distribution ................... 208
Table 75: Cost Per Student Enrolled in the Municipal PrimarySchools - BMC ................................... 209
Table 76: Average Pay:and Salaries for Primary School Teachers. 210
Table 77: Education Budget - Revenues ............. *........... 212
Table 78: Education Revenues - Percent Distribution-BMC ........ 213
Table 79: State Education Grants to the Local Authorities ..... 215
Table 80: Education Cess Rates ............................... 216
LIST OF TABLES (Continued)
Page No.
Table 81: Comparison of-State Education Proceeds withinGreater Bombay Grant Receipts .................... 217
Table 82: Selected Statistics on the Municipal SecondarySchool System ......................... 220
Table 83: Secondary Education - Revenues and Expenditures-BMC .. 226
Table J4:. Revenue and Current Cost Per Student Enrolled in- -- - - Secondary Schools .............................. 228
Table 85: Medical Education - Number of Students and CostPer Student in the Medical Colleges - BMC ........ 230
Table 86: Medical Colleges - Statement of Income and Expendituresby Institution .................................... 231
Table 87: Number of Patients at the Acworth Leprosy Clinics in1971-72 .................... ...................... 234
Table 88: Selected Statistics on the Municipal Group ofTuberculosis Hospitals ............................ 23
Table 89: Public Health Expenditures-BPE-Percentage Distribution. 237
Table 90: Selected Indicators of the Level of Public Health -Services in BMC ..................... *0 ......... 238
Table 91: Public Health repartment-Selected Statistics-BMC ...... 239
Table 92: Current Expenditures in Cemeteries ....... 243
Table 93: Current Expenditure on Public Health Services ....... 244
Table 94: Current Expenditures on Welfare Budgets and byMajor Allocations - MBC .......................... 248
Table 95: Welfare Activities - Financing of Current Expenditures-BMC ... o...........* *** **.. ..... ... ..........-... 251
Table 96: Conditions of Overcrowding in Tenements (City)......... 256
Table 97: Requirements of Additional Tenements to EliminateOv e r c r o w d i n g . . . . . . . . . . . . . . . . . . . . . . . . . . 2 6
Table 98: The Pre-War and Slum Areas of the City in 1956-57 ..... 258
Table 99: House Collapses in Bombay for the Period 1960-1971 .... 259
LIST OF TABLES (Continued)
Page No.
Table 100: Requirements of Tenements to Meet the HousingShortage ............... age************.. 260
Table 101: Slum Clearance Program Capital Works ............... 269
Table 102: Slum Clearance Program - Means of Financing lapitalExpenditures - BMC .............................. 271
Table 103: Slum Clearance Program - Means of Financing CapitalExpenditures - Percent Distribution-BMC ........ 272
Table 104: Slum Clearance Program - Means of Financing TotalExpenditures - BD ............................. 273
Table 105: Slum Clearance Program - Means of Financing TotalExpenditures - Percent Distribution - BMC ...... 27
Table 106: Accounts of the Slum Improvement Department ....... 279
Table 107: Slm Program - Means of Financing Total Expenditures-BIC ........................... ** ***........... 282
Table 108: Slum Program - Means of Financing Total Expenditures-Percent Distribution - BBC ...............- 282
Table 109: Repairs and Reconstruction Board Property Tax Rates.. 288
Table 110: Bombay Building Repairs and Recostruction Board .... 289
Table 111: Number of Properties Exempted Category Wise from
the Building Repair Cess ....... 290
Table 112: Types of Roads in Greater Bombay as of March 31,1972 .................. 295
Table 113: Relation Between Population and Road Length ......... 295
Table 11h: Water Sources at Present Used by or Under Developedfor BMC ................... q...******* *******.. 300
Table 115: Statistics on Water Supply-BMC ...................... 303
Table 116: Summary of Water Supply Statistics .................. 304
Table 117: Metered and Unmetered Supplies .. 305
Table 118: Details of Standpipes in City, Suburbs and Extended
Suburbs as of March 31, 1972 ..................... 307
Table 119: Statement Showing Details of Meters in City, Suburbs
and Extended Suburbs, as of March 31, 1972 ...... 307
LIST OF TABLES (Continued)
Page No.
Table 120: Distribution of Water Supply by Major TerritorialDivision and Major Uses - BM .................... 308
Table 121: Breakdown of Supply Hours .................... 309
Table 122: Expenditures on Water Works - B ............... . 310
Table 123: Water Supply: Current Incomes and Expenditures 315
Table 124: Water Works - Revenues ................... 318
Table 125: Water Works - Revenues Percent Distribution 319
Table 126: Revenue from Water Charges ... 320
Table 127: Water Tax Assessed and Collected for the City ........ 321
Table 128: Statement Showing Water Charges Assessed on WaterConsumption Prevailed for Major Categoriesof Consumers ..................................... 323
Table 129: Budgetary Account of Sewerage Works - B. 330
Table 130: Current and Capital Expenditures on Sewerage Works ... 332
Table 131: Revenues from Halalkhore Tax ......... 333
Table 132: Statement of Halakhore Tax Collected and ExpendituresIncurred on Sewerage Services............ 334
Table 133: Summary of Statistics in the Electricity DistributionSystem - BxC as of March 31, 1972..... . . 337
Table 134: Coincident Madmum Demand, Power Transformer Capacity,Distribution Transformer Capacity and Number ofTransforming Substations in the Systems 338
Table 135: Statistics on Receiving Stations .................. 339
Table 136: Units Sold Under Different Categories for Last TenYears .............. 0...... ......... 341
Table 137: Number of Consumers, Service Lines, Connected Loadand Meters in the System ................... ,... 343
Table 138: Units Sold Under Different Categories for LastTen Years - Percent Distribution ................. 34
LIST OF TABLES (Continued)
Page No.
Table 139: Units Sold and Revenues by Category of Consumersfor Selected Years .. ............. . 35
Table 140: Units Sold and Revenues by Category of Consumers -Percent Distribution 36
Table 141: Electric Tariff .. ....... ................ 347
Table 142: Revenues Per Unit - By Major Category of Consumers 3o
Table 143: Budgetary Position of Electric Supply ......... . 32
Table 144: Breakdown 6f Current Expenditure per Unit,7 Electric
Supply .......................................... 355
Table..1-4: BEST Electric Supply Revenues ................... 0.. 36
Table 146: Passenger Carrying Capacity as of April 1973 ......... 39
Table 147: Transportation Branch - BEST ................. 36
LIST OF FIGURES
Page No.Figure 1: Organization of the Municipal Corporation of
Greater Bombay ........................... 4...
Figure 2: Political Organization of the Municipal Corporationo f G r e a t e r B o m b a y . . . . .. . . . ... . . .. .. . . . . . . .. . . . . . . .. 6
Figure 3: Administrative Organization of the Bombay MunicipalCorporation ......................................... 10
Figure 4: Responsibilities of the Deputy Municipal Commissioners *.. 13Figure 5: Organization of the Bombay Electric Supply and -
Transport Undertaking ................................. 20
Figure 6: Budget Structure of the Municipal Corporation ............ 3Figure 7: Transfers Between Budgetary Accounts ..................... 0Figure 8: Budget Process ...................
68
Figure 9: Organization of Property Tax Administration ............ 168
I. INTRODUCTION
The major policy issues regarding the urban fiscal system of
Greater Bombay were analyzed a few years ago in the context of a World
Bank study of urban development in Bombay. For this reason the present
report serves the objective of providing (a) an overview over the administrative
and fiscal structure of the Bcibay Municipal Corporation (BE) as of Summer
1973; (b) a historical analysis of the revenue and expenditure trends of
BMC; and (c) a detailed account of local revenue sources (in particular
the property taxes), and of the most important local expenditure functions.
Rather than replicating the earlier fiscal study of-Greater Bombay, thisreport aims at filling in, mostly in descriptive terms, some of the gaps
left in the earlier analysis in the expectation that this will advance our
understanding of how the fiscal structure of Bombay operates and what aresome of the prJoblems it has encountered.
Accordingly, Chapter II surveys the adinistrative and organizational
structure of BMC, while Chapter III considers the distribution of responsibility
for the provision of urban services in Bombay between various government
levels, and analyzes in detail the budgeting format and procedures. Chapter
IV provides a ten-year history of revenue and expenditure flows of the Bombay
municipal authorities. The revenue structure is further discussed in
Chapters V through VII, focusing on the trends and composition of revenues,
on the property tax, and on intergovernmental financial flows. Chapters
1/ IBBD, Report on Bombay, Annex IV, "Public Finance and the Efficiencyof Urban Development,'t Special Projects Department, April 30, 1971.
2
VIII through- XIII review the individual service functions of the BMC as
to their organizatinnal framework, the level of services provided, and
their financing. These chapters cover in particular education; health
and welfare; housing and slum improvement; road transport; water supply;
sewerage, and refuse collection; and finally electricity and bus
transportation.
-3-
II. ADMINISTRATION AND ORGANIZATION OF THE CITY OF BOMBAY'?
A. General Overview
Bombay is a Municipal Corporation governed under the Bombay Municipal
Corporation Act (Bombay Act No. III of 1888). The provisions of this Act
are carried out by seven statutory authorities charged with -
distinct responsibilities in the Municipal Government: (a) a Corporation
(i.e. the elected representatives), (b) a Standing Committee, (c) an
Improvements Committee, (d) a Bombay Electric Supply and Transport (BEST)
Committee, (e) an Education Committee, (f) a Municipal Commissioner, and
(g) a General Manager of the BEST UndertakLng. Broadly speaking, the
Corporation and its statutory committees constitute the legislative branch.
Consultative and special committees may also be appointed with their respective
functions being determined by the Corporation. The Commissioner and the
General Manager form the executive branch of the Municipal Government.
The executive and legislative branches of government are aided
by separate administrative bodies (Figure 1). Though
executive authority is vested in the latter, the elected representatives
do exercise general control over civic affairs through various measures
provided in the Municipal Act or established by convention. They exercise
budgetary and financial control by determining taxes and allocations for
expenditure, sanctioning contracts and approving other financial proposals.
Finally, they form policies or express opinions on various measures of civic
welfare, and approve bylaws, procedure rules, and other regulations. The
political structure of the Bombay Metropolitan Council (BMC) is described herewhile the executive authorities are treated in the following chapter.
Figure 1: ORGANIZATION OF THE MUNICIPAL CORPORATION OF GREATER BOMBAY
CORPORATION
i STATUTORY
COMMITTEES
-SPEeIAL CONSULTATIVE
MUJNICIPAL BCOMMITTEES COMMITTEES
UHE ADITORI
MUNICIPAL iSECRETARY
MUNICIPAL CMMISSIONERý GENERAL MANAGEROF BEST 2/
DEPUTY MUNICIPAL ADMINISTRATIVEC~MMISSIONERS DEPARTMENT S ASSISTANT THER AMINISTRATIVE
DIRECTLY SUPERVISED GENERAL DEPARTMENTSMANAGER IRECTLY SUPERVISED
AMINISTRATIVEDEPARTMENTS
WARD OTHER ADMINISTRATIVEADMINISTRATION DEPARTMENTS
1/ Under the administrative control of the Standing Committee
2/ Bombay Electric Supply and Transportation Undertakdng
SOurce: BMC Staff
B. The Legislative Branch
The political system comprises the Corporation, which is commonly
called "House", and the committees (statutory, special and consultative)
(Figure 2). While in terms of statutory authority the "House" is the most
powerful decision-making agent in the municipal organization, most decisions
are made at the Committee level and are usually ratified by the House.
Decisions as to the tax rates and budgetary allocations are made by the
financial and the statutory committees, i.e., (1) the Standing Committee
for all services, education, and electric supply and transportation, (2) the
Education Committee for primary education and (3) the BEST for electric
supply and transportation.
1. The "House"
The House consists of 140 elected councillors. Elections are held
every five years but may be postponed one year if the State government
deems it necessary. For electoral purposes, the Corporation has been divided
by the State Governments into wards with each ward covering between 35,000 and
50,000 people. Until 1968, the city was divided into a number of wards
with plural constituencies,and voting was on a cumulative basis. on the
recommendation of the Corporation, the State Government modified the Act in
1966 by setting up 140 single-member constituencies with a non-transferable
vote. The Act does not recognize any political parties. Nevertheless, the
leader of the ruling party is termed the "Leader of the House'
and the leader of the next group in strength assumes the role of the "Leader
of the Opposition". The House h6lds monthly meetings.
6 -
Figure 2: , PLITICAL ORGANIZATION OF TilE HUNICIPAL CORPORATIPN OF GREATER BHåAYas of 1972-73
KOR.elected by the louse
liOISE or CORPORATION140 Elected CounclUor3
FVE SPECIAL COMITTEES CONsjLTTIvE CaITTEESFOUR STi:TUTORY CO1V'ITTEES (4ad hoa)
Cieettngs Monthly)
(1) Standing Co=ittee (2) Inprovemants • Fach consisting of 24 Hembera Metings are held as an when()eetInrgs Monättee 2 mjttec (1) Worka Committee (City) • fixed by the bayor
16 cour.c-Hors (1Meings llanthly) I. (2) Works Committee (Suburbs)(16 cunirillors) (3) Public Health Committe
(1) Markets & Gardeis Committee(3) Ed.cation Cor"rittee (1) bay Electric Supply () Law, Revenue and General
(O1eL Ings I:onthly) & Tra,nsport Comittee Purpoåds Committe1' ccicil:ors (Nejtjr.s Fjrtnighxl:()
1 counrillor at leastö non-councillors (expert mnembers)
(2 ((6)kas Issue of lrawkere Licensea Re Water Supply Project, etc. iRo Draft Amendmant3 to the Ra: Inplew.entatlon of Assurances
3.14.C. Act given by the Comissioner at the tinéof discussions on the Budget Estimates,
M~ycretc.
+11 MYatorCo.,xuillors Councillord +29
Councillore Councillora
(i((3)7(- Privat,3 Re Impenentaticn of Developmenxt R Drafting of Civic Addresa Re: Slum Cloarance Problem in Ro Frovi5ions of lterat va- . Plan' to Snt. Indira Ganchi the City R r i At v
ac:odation to personsanoeit- Sheds, etc. contravene te T.P.
yMayGr rsYarHyor ScheaM, Santac-az Ko. VI, etc.
+15 +5 J-ayorCouncillora .Councillors +8 Mayor
Councillora +13
lrc ors
5 5 _____________________________________________________r
-7-
The Corporation is chaired by a Mayor who is a councilor and is
elected every year by the House. No special power is conferred to this
position. In contrast, the chief executive, the Municipal Commissioner, is
appointed by the State Government after consultation with the Corporation;
and the Commissioner can be removed fran office by the State government if
at least five-eights of the Corporation councilors vote in favor of removal.
However, the Corporation may appoint a Deputy Municipal Comnissioner subject
toco confirmation by the State Government and may create one or more additional
Deputy Commissioner posts with the prior approval of the State Government.
Moreover, the C.orporation, subject to the approval of the State Government,
appoints a General Manager for the BEST Undertakings for a term of five years,
which can be extended by one additional term. The General Manager is removable at
any time from office by the vote of at least half of the councilors.
Similarly, the House appoints the Special Engineer, the City
Engineer, the Municipal Executive Health Officer, the Municipal Hydraulic
Engineer, the Education Officer, the Mnicipal Secretary, and the Chief
Accountant, all of these appointments being subject to confirmation by the
State Government. These officers are appointed for a (renewable) term of
five years and can be removed from office at any time by the Corporation
with votes of at least two-thirds of the members present at a meeting of
the Corporation. The House also appoints such legally qualified medical
practitioners as may be necessary to the charge of any hospital maintained
by the Corporation. In general, local civil service salaries are determined
by the Corporation, and the sanction of the Corporation is required for
permanent appointments if the salary rate exeeds Rs 500 per month.
2. The Committee System
The committee system includes three types of committees which are,
by decreasing order of importance, four statutory, five special, and nine
consultative committees.
a. Statutory Committees
(i) The Standing Committee consists of 16 councilors .n addition
to the chairman of the Education Committee who attends meetings as an ex-
officio member. The importance of the Standing Committee.:is underlined by
its exclusive role in the budget process for all matters but education and
activities related to the BEST. In addition, it makes recommendations to
the House regarding the budgets prepared by the two following statutory
committees. It also holds specific responsibilities in the appointments
of non-statutory officers and in the field of regulations.
(ii) The BEST Committee consists of nine members including the
chairman of the Standing Committee who is an ex-officio member. Its members
are appointed by the Corporation from among experts. This committee is
responsible for the BEST Undertakings acquired by the Corporation in 1947.
(iii) The Education Committee is composed of 16 members, which
are appointed by the Corporation is a proportion of three-fourths councilors
and one-f.ourth non-councilors. Its responsibilities are limited to primary
education.
(iv) Finally, an Improvements Committee of 16 councilors is
appointed for the purpose of slum improvements and clearance and the
management of the Bombay Improvement Trust's properties. This is the only
statutory committee not directly concerned with budgetary matters.
-' L 9
b. Other Committees
The Corporation may appoint Special and Consultative Comittes forinquiry or for other special purposes. The list of these committees is given inFigure 2. The Corporation may also appoint special committees and may, byspecific resolution carried by a vote of at least two-thirds of Corporationmnembers present, delegate any of their powers and duties to such committees.The Standing Committee, the Improvements Committee and the Education Committeealso may appoint special committees.
C. The Executive Branch
The executive power for the purpose of carrying out the provisionsof the BM Act is vested in the Municipal Commissioner and the GeneralManager of the BEST Undertaking, subject to certain restrictions. The GeneralMaager's responsibilities are limited to the supervision and control of theBEST operations. The Municipal Commissioner's sphere of action is broaderaince it encampasses supervision and control over the acts and proceedings ofthe municipal officers and employees other than the BEST, the MunicipalSecretary, the Municipal Chief Auditor, a3ld their respective officers. Theselast mentioned oZficers are placed under the control of the Standing Committee.The Commissioner also has the right of intervening in the BEST operations al-though the General Manager is independent. However, this right of interventionis never exercised.
1. Administrative Organization of BMC
The Municipal Commissioner as chief executive supervises directlyor indirectly all municipal officers and employees. He is the only linkbetween the Corporation and its committees and is the implementing agentbecause he is the maly one responsible to both political units. The Commis-sioner also has specific powers to initiate proposals involving policy.
- 10 -
The Commissioner delegates administrative responsibility to six
Deputy Commissioners and various administrative departments at the centra-
lized level and through ward officers at the local level (Figure 3). The
Deputy Municipal Commissioners are appointed by the Corporation on the advice
of and with the approval of the Maharashtra State Public Service Commission.
The Deputy Commissioners have both functional and territorial responsibili-
ties (Figure 4). However, some departments are directly under the Commis
sioner's supervision. The departments are organized broadly along major
types of activities of the BM0. Finally, most municipal services are de-
centralized on a territorial basis called wards, of whi.ch there have been
17 since 1964. Each ward is administered by a ward officer, who has the
delegated powers of the Commissioner; he reports to a Deputy Commissioner
and to the heads of the various departments functioning at the central level.
The Comissioner is a statutory officer appointed by the State
Government for a maximum period of 3 years, renewable once after consultation
with the Corporation. He can be removed at any time by the State Government
if his services are no longer needed at that level or for incapacity, guilt,
or misconduct. He is a State Government civil servant although his monthly
salary and allowances are paid by the Corporation.
a. Mnicipal Departments: General Administration Departments
Accounting and Auditing: The Chief Accountant is the Internal
Auditor and is a Statutory Officer of the Corporation. He is responsible
for maintaining the accounts of all the financial transactions for the
Corporation at the headquarters as well as the ward offices. As a financial
adviser to the Municipal Commissioner, he deals with raising Municipal loans
required for financing capital works of the Corporation and maintains both
- 11
Figure 3: AM INISTRATIVE ORGANIZATION OF THE BOMBAY MUNICIPAL CORPORATION
(1973)
CUIF:AL1 C019,SSIONERI
Devartments directly supervised:1. City Engineer (excluding Conservancy
and Transport)2. Chief Accountant3. Public Relations Officer including
Civic Journal4. Development Plan and matters pertaining
thereto, including Town Planning Schemes5. Hydraulic Engineer's Department (routine
matters)6. Project Engineer's Department (routine
matters pertaining to Upper Vaitarna)7. Legal Department8. Schemes for Impivements, Management
of Land and Buildings and also ofex-trust chawls and acquired properties
MC-Personnel 0-Zone I EC-Zone II DC-Zone III 4-Zone IV MC-Special Engineering
ards Dept. Wards pt. Ward Ward pt. Ward ept. Departments SupervisedSuper- per per- per-'sed Esed sed jsed
Source: BTE Staff.
-12-Figure 4: RESPONSIBILITIES OF THE DEPUTY MUNICIPAL COMMISSIONERS -
(1973)
Deputy Municipal Fui tacal Geographical
Commissioners (DMC) Responsibilities Responsibilities
IMC-Personnel 1. Personnel, labour and union Administration of the
matters of all departments Ward including markets,2. Fire Brigade gardens, dispensaries,
3. Printing press maternity homes and
4. Department of the Admini- hospitals under the
strative Officer (Enquiries) control of Executive
5. Stores Healti Officer within
6. Markets the "A" Ward.
7. Gardens8. Labor Officer's9. Security10. Medical Colleges & Hospitals11. Health
MC-Zone I 1. Conservancy Department Administration of the
including dumping grounds wards including markets,
2. Transport gardens, dispensaries,maternity homes andhospitals under thecontrol of ExecutiveHealth Officer withinthe wards of E, F/South,:F/North, G/North,G/South.
DMC-Zone II None - Administration of thewards including markets,gardeas, dispensaries,maternity homes andhospitals under thecontrol of ExecutiveHealth Officer withinthe wards of H, K, F,and R.
DMC-Zone III 1. Assessor and Collector's Administration of the
Department including Octroi and wards including markets,Election Work gardens, dispensaries,
maternity homes, andhospitals under thecontrol of the ExecutiveHealth Officer within the
wards L, M1, N, and T.
DMC-Zone IV 1 License Administration of the
2. Shops and Establishments wards including markets,
3. Education including Research's gardens, dispensaries,
Officer's section maternity homes, and
4. Estates (routine matters) hospitals under the control.control of Executive
Health Officer within the
wards B, C, ad D.
DMC-Special Engineering 1. Hydraulic Engineer's (excluding
routine matters)2. Project &-gineer's (excludingroutine matters pertaining toUpper Vaitarna
Source: BIC Staff
- 13 -
the Sinking Fund Accounts and the accounts of the various Special Funds. He
is responsible for contracts to be entered into by the Municipal Commissioner
for the supply of goods and for the financial control over Municipal works
as provided for in the BM Act. The Chief Accountant's Department also recei-
ves tenders and tender deposits. Finally, he plays a significant role in the
preparation of the municipal budget. Every year, the Chief Accountant is
responsible for preparing draft estimates of Income and Expenditures togetherwith Bstablishment Schedules (personnel and salary rolls) for the ensuing
year, which are based on the past performance in respect of each department
and an assessment of the needs as brought forth by various departments after
taking into consideration the available financial resources of the Corporation.
He supervises a Vigilance (Auditing) Section which visits the various Municipal
Departments and officers in order to guide and assist the staff in accounts
and finance matters.
Collection of Revenue: The Assessment and Collection Department isthe main revenue department of the Corparation; it collects nearly 90 percent
of the total revenue of the Corporation. The Department levies property
taxes, the tax on vehicles and animals, the theatre tax, and the octroi.
The collection of water charges, of the municipal and state education cess,2/and the building repairs cess is also assigned to this Department. This
Department is further in charge of the assessment of property for property
tax purposes, with the assessment and collection function decentralized atthe ward level.
This is a form of municipal import tax. For a description of this andother taxes see below Chapter V.
2/These are also described in Chapter V.
-14-
The Head Office of the Department controls the ward offices in the
city, suburbs and extended suburbs. There is, nevertheless, a central sub-
urban office (located at Bandra). Both offices have similar functions except
in the matters of wheel tax and land policy matters, which are exclusively
handled by the Head Office. The Head Office deals with the levy and collec-
tion of service charges and grants in lieu of taxes payable by the Central
Government, the Bombay Port Trust and the Railways. The transfer of proper-
ties and the collection of survey data for the purpose of assessment of
properties of a special character or for contesting appeals against rateable
values in the courts of law also come under the auspices of the Head Office.
There is a Deputy Assessor and Collector (Octroi) assisted by
Assistants, Assessors, and Collectors to deal with all matters connected with
octroi at the Head Office. This Deputy also supervises the work of the
inspectorial and supervisory staff posted at the 47 octroi collection centers.
Finally, the Assessor and Collector's Department maintains a mall
permanent staff for work in relation to civic elections, i.e., the general
elections as well as by-elections.
Legal Matters: The Legal Department handles all litigations that
arise under the administration of the Corporation laws:
(1) the Bombay Manicipal Corporation Act, 1888; (2) the Bombay Shops and
Establishment Act 1948; (3) the Food Adulteration Act, 195; and (4) the
Maharashtra Regional and Town Planning Act, 1966. These litigations may be
of both civil and criminal nature. Through the enquiry officers functioning
in the Legal Department, the Corporation exercises its powers of evicting its
tenants, licensees, or occupants in its premises for their failure to pay
rents, or for breach of occupancy conditions.
Labor Department: The Labor Department which is under the jurisdic-
tion of the Deputy Municipal. Commissioner, deals with employees' grievances
and generally with all labor matters concerning the 80,000 employees of BNC.
The Labour Officer assists and advises the various Municipal Departments in
the matter of personnel policy, labor disputes, conciliation procedures and
other labor matters.
Organization and Methods Division: This division was set up-in
1957 to undertake in-service training programs for emplpyees in the clerical
cadre as well as for the other staff. With the assistance of the Bonbay
Productivity Council, a number of officers have since been trained in manage-
ment and productivity techniques. The Division also provides training in
Marathi, which was introduced as the official language in 1964, to the Officers
and other staff members whose mother tongue is not Marathi.
Stores: The Stores are a central purchasing and storage agency of
the Corporation for the purpose of procuring, and storing various materials
and supplies to all the different departments of the Corporation.
Enquiries Department: This department is responsible for ascertai-
ning that the intricate labor laws are being followed. Investigations with
respect to minor offenses are conducted by the individual departments, while
those of serious nature, or requiring detailed investigations, are entrusted
to the Administrative Officer (Enquiries). The Department also investigates
cases of corruption, malpractice, misappropriation of Municipal property,
and misconduct of various kinds by Municipal employees.
Bambay Municipal Security Forte: The purpose of this force is to
guard municipal properties and lands of the Corporation. It is headed by a
Security Officer who is taken on deputation from the State Police at the
rank of Assistant Commissioner of Police in Greater Bombay. This force,
- 16 -
which has a total strength of about 2,250 (1972-73), is supervised by 22
Security Assistants and three Assistant Security Officers under the control
of the Security Officer. Before March 1966 there was no separate force,
only watchmen and janitors appointed to guard the different properties and
institutions. These watchmen were under the direct control of the respective
officer in charge of such institutions and properties.
Municipal Printing Press: The Municipal Corporation of Greater
Bombay has its own printing unit.. It works on a semi-commercial, non-profit
basis.
Public Relations Department: Besides disseminating information
about the various civic services and significant events, this department,
with the assistance of numerous community welfare institutions, organize
campaigns on public health education and preventive mass immunization. The
Bombay Civic Journal, which is the official publication of the Municipal
Corporation, is published every month through this Department.
b. Municipal Departments: Service Departments
Education: The Primary Education Department, administered by the
Education Officer, is responsible for activities relating to education
(primary as well as some secondary). The exceptions are medical colleges,
and dental college libraries, which are attached to hospitals and administered
by their respective deans.
Health: The Health Department, supervised by the Executive Health
Officer, carries out all the health activities of the Corporation, except
hospitals. It also assumes the function of registration of births. and deaths.
The Municipal Corporation maintains three general hospitals, which are under
the ccntiol of their respective Deans, and three specialized hospitals, which
-17-
are placed under the control of the Municipal Commissioner. The Corporation
has also recently set up a Municipal Laundry in order to provide a modern-
mechanical laundry service to the hospitals and maternity homes.
Engineering Department (City Engineer): The main functions of this
department are: maintenance of roads, sewers and municipal buildings; planning,
designing and execution of the Slum Clearance Act; housing and drainage and
building projects for offices, schools and hospitals. It plays an important
role in enforcing building by-laws, development control rules, zoning regula-
tions; and it is in charge of conservancy or public cleansing, of the transport
section, and maintenance of mechanical and electrical installations in all
municipal units. The City Engineer is a full-time statutory officer of the
Corporaticn and controls and supervises the entire engineering services exeept
those relating to water works.
Estate and Land Management: The Estate Department is concerned
with the management of both Municipal properties constructed by the Ex-
Improvement Trust and new properties constructed out of Budgets "B" and "A".
It mainly deals with allotment and transfer of tenements and lease matters.
It is also responsible for recovery of rent and taxes and keeps all relevant
records and accounts.
Fire: The Fire Brigade is in charge of fire protection and ambulance
service.
License Department: This department is in charge of the enforcement
of licensing regulations in the matter of storage of hazardous and combustible
goods and dangerous trades. Other related functions entrusted to it include:
(1) licensing, (2) encroachment removal, (3) advertisement regulations, and
(L) implementation of the 198 Bambay Shops and Establishments Acts, the 1936
Payment of~ Wages Act, the 1 948 MinimumnWages Act, and the 1923 Workmen' s
Compensation Act.
Markets and Slaughterhouses: All the markets in Greater Bombay
are -under overall control of the Ward Officer (Markets). Slaughterhouses
are managed by a General Manager under a special wing of the Market Adminis-
tration.
Recreational Activities: The Parks and Garden Department is headed
by a Superintendent. Recreational units such as swimming pools, theatres,
recreation centers, museums are administered by their respective managers.
C. Ward Administration
Officers of the 17 wards are appointed by the Commissioner on the
advice of the Public Service Comission. They are full time civil servants
of the Corporation and are responsible to the Commission. Such officers
are responsible for organization and discipline but not for technical instruc-
tion, for which the officers amplo7ed at a ward office look to their depalt--
mental chiefs. The Tmrd is basically a unit for tax assessment and collection
purposes, maintenance work, and construction of very small works. All tax-es,
including wheel taxes and water meter ch zges, are collf;,cted at the ward
office. The assessment of lands and buildings foi~ property tax purposes is
also made at that level. The ward officers also have some budgetary functions
in that they prepare expenditure estimates by ftmaction for their respective
wards. These estimates are submitted to the Municipal Ccmissioner. The level
of expenditure estimated even at this decentralized level is determined on the
basis of need, i.e., there is no relationship between the amount of revenue
collected in the ward and the amount spent in the ward. The ward officer has
some freedan to make minor expenditure alterations within budget sub-heads;
but he cannot significantly alter the overall spending pattern in the ward.
- 19 -
The sectional make-up of atypical hard organization is a follows:
assessment and collection; medical inspection, malaria inspection, and pest
control; conservancy sweeping of roads and paths, refuse collection and
halalkhore; engineering is divided into three sections: (1) building and
factories, which includes inspection of private buildings, and town planning,
(2) maintenance engineering, which includes drainage, roads and municipal
properties (dispensaries and schools); and (3) engineering (water works);
legal, mainly for complaints; education, regarding maintenance of school
buildins, small works, licensing within the limit of.schedule M of the Act;
markets (maintenance only); and parks, open spaces, and security.
The Chief Accountant 's Department is not decentralized on a ward
basis, though the possibility of making changes in this direction is under
consideration.
2. BEST Organization
In August 19L7, the BMC acquired the Bombay Electric Supply and
Tramways Co. Ltd., which was providing transport and electric supply services
under licenses granted in the Bombay Transway Act, the Motor Vehicles Act, and
the Indian Electricity Act. By mutual agreement, the Comporation took over
the bus service as well. The BES and,T undertaking therefore has two major
branches of activities--namely, distribution of electricity in the city and
public transport service, i.e., operation of buses in the Greater Bombay area.
The entire executive power is vested in the General Manager, who is
appointed by the Corporation subject to the State Government's approval. The
organization of the BEST is suunarized in Figure 5.
I -
Figure 5: ORGANIZATION OF THE BCBAY ELECTRIC SUPPLY AND TRANSPORT UNDERTAKING
as of 1972-73
GENERAL MANAGER
Asst. General Manager
Executive Asat. to Kiectronic Chief Controller 1) Internal Auditor
General Manager Data Pro- Engineer of Stores 2) Chief Accounts OfficerChief Chief Legal Adviser Senior Engineer Supdt. cessing (Supply) 3) SecretaryTraffic Engr; Personnel in Charge Consumers - ManagerManager (Trans- Officer (Bldgs Way
port) & Work,Overhead)
Chief Chief Public SeniorSecurity Welfare Relations MedicalOfficer Officer Officer Officer
Source: BMC Staff
*0
- 21 -
3. Civil S-ecretariat and Municipal Audit
The Corporation or "House" and the various committees are assisted
in the day-to-day working by the Municipal Secretary, a statutory officer,
and the staff working under him. The Municipal Secretary's Department is
called the "Corporation and Standing Comittee Office" and is directly under
the control of the Standing Committee. The Civil Secretariat is responsible
for preparing agendas and proceedings of the meetings of the various committees
and of the Corporation, and it assists elected representatives in matters
connected with the deliberative work. Agendas of the various committees are
issued in English as well as in Marathi in accordance with Corporation Resolu-
tion No. 1334 dated January 28, 1964. The Municipal Secretary keeps the Seal
of the Corporation and is the custodian of all official documents and papers
connected with the Proceedings.
The Municipal Chief Auditor is appointed by the Corporation to
conduct statutory audit of transactions affecting the finances and accounts
of the Corporation, and reports directly to it through the Standing Committee
concerning material irregularities and financial improprieties detected from
time to time. The Municipal Chief Auditor fTnctions independently of the
Chief Executive and he and his subordinates are placed under the administra-
tive control of the Standing Committee. He conducts similar audits in respect
to BES and T Undertaking and reports irregularities directly to the BEST
Committee. He further has to certify the financial capacity of the Corporation
to raise and repay loans before the Corporation considers such requests by the
Executive.
- 22 -
III. FISCAL STRUCTURE AND BUDGETING
A. The Assignment of Functions
The responsibilities held by the various public authorities, statutory
agencies, and by the private sector within Great Bombay are summarized in
Tables I and 2. These data suggest a number of important characteristics
of local governments in Bombay:
(a) The responsibilities of local authorities cover a wide
range of activities, and within each sphere of activity,'the degree of
involvement is very often exclusive or predominant.
(b) The private sector does not play a major role in the provision
of what are usually thought of as public sector activities. Private firms are
predominant in the generation and transmission of electricity and the supply
of gas and are involved to a minor extent in the distribution of electricity and water
supply and in the provisinn of such services as education, cemeteries and markets.
(c) The Central Government's primary responsibilities within Greater
Bombay are for transportation (rail and air), education (higher education
at the university level), and some public utilities (telephone and mail).
(d) The activities carried out by the state government are rarely
executed exclusively at this level, with the exception of law enforcement,
but are usually shared in various degrees with the local authority. Welfare
is predominantly a state function while health, secondary education and
housing (to a significant extent) and roads and bridges (in a minor way) are
shared with BM. As discussed below, the existence of these shared responsibilities
results for a deliberate attempt by the Corporation to provide a higher level of
social services than the State Government is able to offer.
25 -
FOOTNOTES To TABLE I
1/ Some of the dams providing water to Bombay have been built or are being
built and operated by this department.
The 340 Act fixes a ceiling to halalkhore tax.
The Commission scratinizes the expansion plans of the state electricity
boards. The Atomic Energy Departmwt is engaged 'in powar generati;n
(nucleax power station at Tarapur).
Resr=-sible in the whole state of Maharashtra for power generation, trans-
M13giUn and diatributiqn, it sells energy in bulk to Tata, supplies the
Metropolitan regibn outside the license area of Tata. It also regulates
the private utilities in the sector.
Tata historically have been the sole power suppliers in thp Bombay area.
It supplies power to their 3 sublicensees, BcmbW Electric Supply and
Transport Undertaking, Bombay Suburban Electric Supply and Thana Electric;
it also supplies Maharashtra State Electric Board and the Railw-ays; it also
sell-s supplies power to the large industrial users directly in Greater
Bombay but also to some areau outside this in Salsette lsla4d and to an
industrial enclave near Kalyan. Their supply is cn17 in bulk and high tension.
6/ Distribution 'of electricity in Bombay Citywithin the municipal limits as
they were before19-50.
Z/ They operate main17 in suburbs and in Thana. Bcmbay Suburban has a license
area that covers (roughly) the ao-called Eastern and West-ern su urbs and the
Western Extended suburbs in Greater Bombay and in addition to this, part of
Salsette Island outside the municipal limits. Thana Electric is a very
small company and has a license area that caaprises Thana riandcipality and
those parts of the Extended Suburbs in Greater Bombay that are not in the license
area of Bombay Suburban.
8/ Produce some sewage gas in their largest sewage treatment plan.
W 91 Supplies town gas to Bombay City.
jO/ Set up in 1969 to make repairs on dilapidated private houses.
11/ Statutory autonomous Corporation.
S2/ Supervisory function (curricula, textbooks and standards of teaching), Financial
assistance programs.
13/ Approves Tom Planning Schemes prepared by the Corporation.
1h/ Article 138 of BMC Act, the State Government may t any time appoint an auditor
for the purpose of making a special audit of the municipal acco=ts including
the accounts of the BEST.
........... ..
- 26 -
Table 2: LEVEL OF BOMBAY MUNICIPAL CORPORATION'SRESPONSIBILITIES IN EXPENDITURE FUNCTIONS
1. Exclusive
SewerageDrainageWater SupplyStreet LightingTraffic LightsBasesFire ProtectionCemeteriesParks and RecreationMarketsSlaughterhousesPrimary EducationRefuse Collection :
2. Predominant
Roads and BridgesHealthElectricity (distribution)
3. Sibstantial
Sec o fdary FaucationSlum Improvement and Clearance.
h. Minor
GasHousingWelfareHigher Edu6ationPolice
5. None
TelephoneRailwaysPost OfficePortPrisons
27-
B. Expenditure Responsibility of the BMC
The responsibilities of the Corporation are divided statutority
into obligatory and discretionary functions (Chapter 111 of the BM Act,
Articles 61 and 63 specially). Table 3 and Appendix A to this chapter
provide a list of these functions. Most of the obligatory functions are
carried out solely by the Corporation with a few notable exceptions, e.g.
the State Government operates a number of hospitals and dispensaries.1/
The hospitals have never been turned over to the BC, hence it is required
to contribute to the financing of these institutions in a fixed monthly
amount of Rs34,541. The Corporation must provide for the maintenance of the
mentally ill, provided that the rates prescribed by the State Government shall
not exceed half the total per patient cost of maintenance. The Corporatio
not only builds and maintains most roads and bridges, but also shares the
construction costs of a few arterial rods and bridges which are being built
by the State Government within Greater Bombay. The State Government operates
a few dams, which supply some of Bombay's water, as a result of the
Corporationis inability to develop 'an, adequate water supply system.
1/ Medical institutions in Greater Bombay maintained by the State Governmentare: (1) the Jansetjee Jeejeebhcy Hospital, (2) the Bai Motlibai(Obstetric) Hospital; (3) the Sir Dinsahw Manackji Petit Hospital forWomen and Children; (4) the Dwarkadas Lallubhai Dispensary for Womenand Children, (5) the St. George Hospital, (6) the Goculadas TejpalbNativeGeneral Hospital, (7) the Pestonji Hormusji Cama Hospital for Womenand Children; (8) the Albless Obstetric Hospital; (9) the Jaffar SullimanDispensary for Women and Children; (1) the Jehangir Nassarvanji WadiaDispensary, Mahim.
- 28_-
Table 3: DUTIES AND POWERS OF TE MUNICIPAL AUTHORITIES
1. Obligatory 2. Discretionary
Drainage - other type of education
Water Supply - parks and gardens
Sewerage - survey of buildingsand. lands
Refuse Collectiqn - Population Cencas
Roads and Bridges - Transportation (Tramways,buses)
Fire Protection - Gas
Health (prevention and - Supply of electric energycurative measures)
Registration of Births and - Any measure likely toDeaths promote public safety,
health, convenience, or
Cemeteries instruction.
Markets
Slaughterhouses
Street Lighting
Primary Education
1/ As mentioned in the BMC Act, most of these functions are actuallydone by the Corporation except supply of gas which renains in theprivate sector.
Source: Principally Articles 61 and 63 of the BMC Act.
-29-
The..Corporation has exercised much of its discretionary powers by
extending its activities into sectors previously dealth with by the State
Government (secondary education and welfare) or Central Government (higher
education at the university level). This extention has been prompted because
the higher levels of government failed to provide services deemed adequate
by the Corporation. Extention has also taken place in fields which remain
the sole responsibility of the local authority (parks and recreation, buses
slum improvement and slum clearance). This last activity has been shared
recently on a limited basis by the Maharashtra Housing State Board,
Relatively few of even the utility-type functions remain in the
hands of the private sector. Supply of gas and supply and distribution of
electricity are notable exceptions. The Corporation is presently moving
toward the take-over (by the BEST) of the private firms which are in charge
of the distribution system of electricity. These private firms hold long-
term licenses, awarded by the State Government, which will soon expire.
Finally, it is interesting to note that the Corporation
carries out all of its responsibilities directly through its departments axid
as part of the general budget. This is in contrast to the common practice
elsewhere bf using separate autonomous agencies or enterprises. A notable
exception is the BEST, which operated as a separate enterprise before it was taken
over by the Corporaticn and is still treated as a special account. 1/
The level of expenditures is determined by the Corporation. Higher
levels of government are not involved directly since the expenditure estimates
are not approved by the Government. However, the State Government indirectly
affects the overall level of expenditures via influences on the level of
1/ But even for BEST the autonomy is only partial, since the General Manageris appointed by the Corporation and its budget is subject to Corporationapproval.
- 30 -
revenues. It must approve every year the loans raised by the corporation
internally and from the public; and, it must approve new taxes or rate changes
if such changes set the rate at levels higher than the ceiling authorized
in the Act. This is thought to control local spending in that the budgetary
estimates cannot be overspent and budgets may not show deficits. If expenditures
are incurred in excess of the estimates, they are charged to a suspense or
advance account and included in the budget for the next year. Scrupulous
care is taken to ensure that the free balance on the account in its totality
is Sufficient to meet not only the budgeted item but also the suspended items.
At the Corporation level, expenditure authority lies mainly in the
hands of the Finance Committees, the Municipal Commissioner, and the General
Manager for BEST. The Standing Comittee is the finance committee in the
fields of all municipal services (Budgets A and B) except the following ones:
education, and buses and electric supply (BEST undertaking) which have their
own "finance comitteesl, i.e. the Education Committee and the BEST Comnittee.
respectively. The Committees must approve the budget estimates on the basis
of estimates prepared by the Municipal Commissioner and the General Manager.
Then, the estimates ark sent to the House for approval. The House usually
ratifies the Standing Committee's allocation of resources between the budget
heads, without changing the estimates adopted by the Standing Committee.
The approval of expenditure estimates by these finance committees
is made at the level of major budget heads and major budget subheads for the
current expenditures. Such approval is made on a project basis for capital
expenditure and, in addition, for each major territorial division, city,
suburb and extended suburb.
- 31 -
The Municipal Commissioner and the General Manager for BEST
play a major role since they prepare the budget estimates and allocate-
expenditures between heads. They set the budget level on the basis of the
existing level of revenue, i.e. on the basis of present tax rates and charges.
And since the Municipal Commissioner is also responsible for
initiating changes in the revenue structure, he can also propose a level of
expenditures based on revisions in the revenue system.
During the fiscal year, the House can increase any amount of budget
grants (a t budget grant" is any sum entered under a major head on
the expenditure side in the, terminology of the Act); or, make any additional
grant on the recommendation of the Standing Committee in case of expenditure
fr.m the Municipal Fund, on recamendation of the Education Committee for
primary educational matters (Budget E) and on recommendation of the BEST
Committee for BEST budget (Budget C). The only condition is that the overall
balance cannot be reduced below 1 lakh of Rupees in case of the Municipal
Fund and the BEST fund, and for primary.education, the cash balance of the
Municipal Fund must not be reduced below Rs20,OOO.
If an item of specific expenditure is provided for in a budget, but
not actually incurred, it can be carried forward into the next annual budget;
but if it then remains unspent, it lapses.
Reductions in and transfers from a budget grant can be made under
the following conditions:
a) subject to the previous provision, the Corporation may, on the
recommendation of theStanding Committee, sanction the transfer of any amount
not exceeding Rs 15,000 fran one budget grant to another budget grant;
b) the-Standing Gcmmittee may, at any time during an official year:
(i) reduce the amount of a budget grant; (ii) sanction the transfer of any
amount not exceeding Rsl5,000 fran one budget grant to another budget grant;
and (iii) sanction the transfer of any amount exceeding Rs5,000 within a
budget grant;
c) the Municipal Commissioner may at any time during an official year sanction
the transfer of any amount not exceeding Rs5,000 within a budget grant if such
transfer does not involve a recurring liability, provided that every transfer of an
amount exceeding Rsl,000 :-made under this clause is reported by the Commissioner -
to the Standing Committee. The Education Committee and the BEST Committee
have the same rights as mentioned above in their respective jurisdiction,
with the General Manager serving in place of the MC.
C. Borrowing Powers
Subject to the approval of the State government, the Corporation
may borrow from the Central or State Government,the private sector, or
from its own internal funds. These powers may be exercised'only to finance
capital works, to repay loans, to finance any deficit in budget estimates
B, and to carry out building loans to persons desiring to erect buildings
on former Bombay Improvement Trust (BIT) lands. Limitations to the borrowing
powers of the B0 are set out in section 109 of the Act and are of two kinds.
First, the overall debt position of the BXD is regulated as follows: the
sums borrowed on account of budgets A and E, taken jointly and including
the balances of all outstanding loans and debts borrowed, may not exceed twice
the rateable value of the properties assessed for property taxes in Greater
- 33 -
Bombay. This rule also governs the borrowing on account of Budgets B and C,
but in this case each budget is treated as a separate entity: Furthermore, the
sums borrowed on account of budget B may not exceed 2 million rupees. The
second type of restrictions concerns the two major types of borrowing which
are authorized in the Act. The corporation may raise loans from the public
as well as from its internal funds. It may set apart every yearas a sinking
fund a sun sufficient to pay off loans when they come to maturity and invest
these sinking funds in public securities includings its own securities. This
type of internal borrowing is not subject to additional *restfictions. The
use of a sinking fund is =>t required and the Corporation may, of course,
pay off the money borrowed by equal annual installments. In any event, the
scheduling of loan repayment must be approved by the State Government.
External borrowing is likewise regulated by the State Government.
The procedure works as follows: Before the beginning of the fiscal
year, the State collects the estimated requirements of all its local authorities
and makes estimates of its own borrowing requiLrements. These are then passed
on to the Reserve Bank and the Finance Commission. The Reserve Bank est#ates
what is thinks the market will bear, considering also the needs of the Central
Government. The State Government then receives an authorization for a
borrowing ceiling, which also includes a, 1imit which refers directly to the
Municipal Corporations. Then the State may allocate -- by a method it selects --
this given total amount to each of the municipal corporations within the State.
Finally, the Act fixes the maximu repayment period at 60 years;
but, the Corporation may determine the period suitable for each loan with
the State Government's sanction. Section 108 of the Act provides that loans
other than government loans may be secured on immovable property, or on any
of the taxes and charges which the BM is authorized to levy.
3)4-
Usually, the Corporation does not borrow from the Central Government,
with exception of same specific programs. For example, programs regarding
the improvement of slums were partly financed with government loans. The
BM borrowing policy currently relies more heavi;y on public loans than
on its internal funds.
D. Budgetary System
The budgetary erganization of BPE reflects the four major divisions
of the Corporation's activities: (a) municipal services, (b). Improvements
(including slum clearance), (c) Education (primary education), and (d) Bombay 2
Electric Supply and Transport. To these categories correspond Budget A,
Budget B, Budget 0 and Budget E, respectively. A fifth budget, Budget G,
for the water and sewerage operations was created on April 1, 1973,
on request by the IBRD as a loan condition. There is presently no separate
budget for the three main territorial divisions of Greater Bombay (City,
Suburbs, and Extended Suburbs); such a division existed until a few years
ago under Budgets D and F respectively for suburbs and extended suburbs.
This territorial division had its origin in the successive physical extensions
of the City and the legal requirement that for ten years after the relevant
extension, separate budgets (and accounts) should be kept for the added areas.
Though separate budgets are no longer presented, the practice is continued
in the presentation of the budget appendices because it facilitates demonstration
that the added areas get their "fair share" of the expenditures, measured
against the revenues collected.
1. Budgetary and Accounts Documents
The Corporation publishes on-a yearly basis three types of major
documents -- budgetary documents, annual accounts, and management reports.
The ten most important are listed below:
Budgetary Documento.:
1. Budget Estimates A and B, as approved by the Standing Committee
of the Municipal Corporation of Greater Bombay under Section 126
of the BMC Act.
2. Budget Estimates A, B, C, and E as adopted by the Municipal
Corporation of Greater Bombay (under Section 129 of the BM Act).
3. Appendices to the Budget Estimates A, B and E as adopted by the
Mnicipal Corporation of Greater Bombay.
Annual Accounts:
h. Municipal Corporation of Greater Bombay Annual Accounts (city,
suburbs, extended suburbs,, and education funds).
5. Annual Accounts (City)
6. Annual Accounts (Suburbs)
7. Annual Accounts (Extended Suburbs)
8. Statement of Accounts (BEST)
Administration Reports:
9. Administration report of the Municipal Commissioner for Greater Bombay
(city, suburbs and extended suburbs).
10. Report of the General Manager, Administration report and statement
of accounts, BEST.
2. Budget Documents
Budget documents 1 and 2 above differ only in that the first is
printed before the budget estimates are sent to the House for approval, and
therefore does not include the fi-nal estimates as approved by the House. The
second consists of five parts for the current budget: (1) general cmments
on the budget for the caning fiscal year (which runs from Appil 1 to March 31)4
by the Mnicipal Commissioner or the General Manager, and by the Standing
C-ormittee, the Education Committee, or the BEST Committee. Also, remarks
on the implementation of the budget for the current fiscal year are made;
(2) revised estimates for the first eight months of the current fiscal
year; (3) income and expenditures estimates for the coming fiscal year,
(4) advance and suspense items; and (5) special funds. The advance and
suspense items are used for internal accounting during the fiscal year
and for -accounts of the departments or units servicing other departments
such as the asphalt plant, printing press stores accounts, and municipal
foundry.
The capital budget is usually presented more briefly: by main
budget heads (budget A)-, according to sources of funds (Budget B), and by
geographical areas (budget E). Estimates are more detailed for budget C.
The basic differences between the budget estimates and the budget
appendices are: (1) presentation of the budget estimates (current and capital
accounts) by major territorial divisions of BM; (2) greater detail in the
presentation of current expenditures and of the capital budget for the
Corporation as a whole, as well as by major geographical division; and (3)
an enlarged number of tables (see Appendix C).
3. Annual Accounts
The Accounts covering the whole jurisdiction of BM and the
Education Funds are summaries of the accounts by territorial division.
The accounts by division are often required for basic information. There is
no consolidiation of overall financial operations at this level of detail.
The accounts are published'every year and present actuals for that particular
year.
4. Administration Reports
These are published approximately 1 to 2 years after the end of a
fiscal year- Their content is defined statutorily. They include: (1)
document n=mber four on the list, i.e. Annual Accounts (City, Suburbs and
Extended Suburbs and Education Funds), and (2) reports by department
heads about their respective activities.
5. Structure of the Budget Documents
The finances of BMC are presented in four major separate accounts
on the basis of the Corporation's activities (Figure 6); and there is no
consolidation between ludgets. Budget A, which covers municipal general
services, is often referred to as "municipal budgetu; budget B, or the Improve-
ments Budget, deals with slum improvement and slum clearance programs and the
management of the Banbay Improvement Trust's properties. This budget is
further divided into three separate accounts: slum improvement, slum clearance
(city), and slum clearance (suburbs and extended suburbs). Budget E covers
primary education (other types of education such as secondary and medical
education are part of the municipal budget), and budget C deals exclusively
with the BEST undertaking. Budget G or the water works budget, which came
into existence in 1973, will cover accounts of water and sewerage works executed
by the Corporation.
Budget A is by far the largeqst budget and most transfers take
place from this budget to othei- accounts (Table 4). These transfers are
strictly reguluted in the BMC Act, although the exact amount is determined
by the Standing Committee subject to a ceiling. They constitute obligatory
expenditures for this account (see Figure 7). More specifically, the largest
Figure 6: BUDGET STRUCTURE OF THE MUNICIPAL CORPORATION 1/
BUDGET A BUDGET B BUDGET C BUDGET E BUDGET G.
BES&T Education Water & Sewerage
-unicipal Services Slum Improvement Slum Clearance Slum Clearance
Budget (City) Suburbs andExtended
Suburbs
.Revenue Income & Revenue Revenue Revenue
Erpenditures Income Income Income
General Account General Account and and andExpenditures Expenditures Expenditures
General Account
Loan Works Budget
(Land-Buildings)
Capital Account Capital Account Capital Account Loan Works loan Works Loan Works
Loan Works Budget Budget Budget Budget
for the purchaseof plant &machinery
Special Funds ciSpeaiaF unds
1/ According to the terminology of the budget.C2
2/ New budget starting fiscal year 1973/74.
- 39 -
Table 4, RELATIVE IMPORTANCE OF THE VARIOUS BUDGETARY ACCOUNTS BASEQ ON 1971-72 ACTUALS
Revenue Expenditures- Loan Works Budget- Total Expenditures('000 Ra) ('000 Rs) ('000 Rs)
Budget A 496,900 49.9 103,197 63.9 600,097 51.9Budget B 33,1Lh 3.3 6,387 4.0 39,531 - 3.4(1) 27,989 2.8 2,893 1.8 30,882 2.7(2) 2,508 .2 3,494 2.2 6,002 .5(3) 2,647 .3 218 .1 2,865 .2Budget 334,538 33.6 37,600 23.3 372,138 32.1Budget E 97,641 9.8 7,611 4.7 105,252 9.13/ 3/TOTAL 995,367 100.0- 161,400 100.O - 1,156,767 100.0
1/ Corresponds roughly to a current expenditures account.Depreciation is included in these data,
Corresponds to a-papital expenditures budget. It includes plant andmachinery.
2/ Totals do not add to 100 due to rounding
Soui*ce: BMC Annual Account 1971-1972
**1
Figure 7- TRISFERS BETWEE BUDGETARY ACCOUNTS
Budget A Budget B Budget B Budget BMunicipal Services Slum Improvement Slum Clearance (City) Slum ClearanceRevenue Account General Account General Account Suburbs & Extended Suburbs)
General Account
Budget B Budget B Budget BSlum Improvement Slum- Clearance (City) SItzm Clearance'Capital Account Capital Account (Suburbs & Extended Suburbs)
Capital Account
Budget A Budget CSpecial BEST
Funds Revenue Account
Budget E Budget CEducation Fund Special Funds
Account
Budget A Budget CLoan Works BLoan Works Budget
Source: BMC Budgets
transfers in-monetary terms are from Budget A to Budget E (primary education
budget), and to the general accounts of Budget B (slum improvement, slum
clearance (city) and slum clearance (suburbs and extended suburbs).
Transfers to the BEST undertaking occur only in exceptional circumstances,
whereas the BEST is required to contribute to the municipal budget every
year as specified in Section 460KK(2)(c) of the BM Act. Within Budget B,
transfers take place between: general and capital accounts of each subaccount;
general and capital accounts of the slum clearance (city); and general and
capital accounts of the slum clearance (suburbs and extended suburbs).
In addition to this lack of consolidation, the municipality's
finances are also characterized by a large number of special funds that have
been set up for specific purposes. These special funds are separated from
the budget accounts mentioned so far. They usually have their own resources,
but can also receive funds from Budget A and C, depending on the type of
fund. In addtion to these funds, there are the important staff provident
funds and the pension funds for all budgets, and several internal funds and
reserve accounts for BEST undertakings.
Though the budget accounts are spearate, they have common
characteristics. First, all are prepared on a "cash basis", i.e. based on
"actual receipts" and "actual disbursements". Second, each consists of a current
and capital account. (The terminology adopted in the accounts is given Chart 6).
The current account is called "Revenue Income and Expenditure" for Budget A,
C and E, and "General Account" for Budget B. The current account includes all
current expenditures subject to the restrictions mentioned below. Charges
met out of special funds are not included in Budget A. These sums, however,
are usually negligible.
Third, the capital account is referred to as the loan works budget
for Budgets A, C, and E, and capital account for Budget B. The loan works
budget covers expenditures on lands and buildings, equipment, plant and
machinery. All capital expenditures are included in the loan works budgets
with one minor exception. The current budget includes same expenditures on
capital workb under the head "New Works", which are works of a value below
100,000 Rs. The expenditure on new works under Budget A is restricted to
20.5 million Rs. which may be extended to 3 million Rs for the current
fiscal year at the request of the Municipal Commissioner. The existence of
special funds does not raise any problems here since expenditures out of
special funds are (mainly on plant and machinery) included in the capital
account (Budget A).
Fourth, each account's historical trend is presented in the new
budget. The basic budget documents (Budget Estimates) are made of a summary
of income, a summary of expenditures, and a detailed description of each major
budget head. In the summary parts, 13 figures are usually given by budget
head (major budget heads and subbeads): actuals for five years, budget estimates
for the current fiscal year, actuals for the last six months of the previous
fiscal year, actuals for the first six months of the current fiscal year, and
budgets estimates for the coming fiscal year.
In the Budget Appendices, there is a further breakdown within the
budget heads and by major territorial area (division I, II and III, which correspond
- 43 -
to city, suburbs and extended suburbs). For example, the line "establish-
menit"is broken down into expenditures on supervisory and subordinate, labor
(technical and other), and other operating charges (traveling and washing charges).
Repairs and maintenance are broken down into repairs and special repairs. However,
in spite of all this detailing, the budget document contains estimates for only one
year in the future (the comming fiscal year), and is thus not a useful fiscal
pajning tool over an extended period.
6. Budget A.
Budget "A" is the main account of the Corporation representing
over half the Corporation's total expenditures. It covers self-financed
projects as well as expenditures financed with general revenues,and.is
comprised of a current account and a loan works account.
Major heads of budget A are presented in Table 5. These heads
are mainly, determined by activities rather than by administrative
department. Exceptions to this rule refer to the public health activities of
the Corporation, which appear in two heads, namely: "?blic Health Depart-
ment" (head V) and in part of head (VI)."Medical Relief and Education."
The loan works accounts in budget A consists of two main parts --
a Loan Fund and a Trust Fund, with the Loan Fund being much larger than the
Trust Fund. On the income side, the loan fund budget include loans (internal
and external) and advances from various special funds; the Trust Fund consists
of various contributicns from public and private parties for the provision
of specific capital goods.
The Loan Funds budget establishes a basic distinction between
expenditures on lands and buildings, and on plant and machinery. Expenditures
Table 5: FORMAT OF BUDGET A 1/"Revenue Income and Ependiture" - (Current7Account)
A. Summary of Income
I. General tax; indirect taxation and miscellaneous revenues
A. General tax
B. Octroi
C. Other receipts
II. Waterworks
A. Water tax
B. Other receipts
II. Museums
IV. Free reading rooms, libraries and municipal high schools
V. Public Health Department
VI. Ybdical relief and education
VII. Street cleaning, conservancy, and halalkhore service
A. Halalkhore tax
B. Other receipts
C. Tax on dogs
VIII. Roads, storm water drains, public lighting
A. wheel tax
B. Other receipts
IX. Mechanical
X. Building, land acquisition and management
XI.,Fire Brigade
A. Fire tax
B. Other receipts
1/ Based on "Budget Estimates A, B, C and E 1973-74 as adopted by the Municipal
Corporation of Greater Bombay under Section 129 of the BMC Act."
Table 5 (Continued)
XII. Licensing, removal of encroachments on public streets, administrationof Shops and Establishments Act (1948) and theatre tax
XIII. Gardens, recreation centres and open spaces
XIV. Markets and slaughterhouses
XV. Contribution from capital funds to revenue on account of loan works staff
XVI. Extraordinary receipts
XVII. Rebate from government on account of collections of the -urban immovable property tax in the city
XVIII. Transfers from the BEST fund
XIX. Receipts from government on account of urban immovable property tax
XX. Grant-in-aid from central government on account of additional expendi-ture due to increase in emoluments of the employees of the Corporation
XI. Rebate from government on account of collection of House Repair Cess in the City
XXII. Receipts from government on account of reimbursement of cost incurred oncivil defense measures for the years 1963 to 1966
B. Summary of Expenditures
I. General supervision, collection of revenue, etc.
A. General superintendence
B. Collection of revenue
C. Upkeep and guarding of municipal offices
D. General stores
E. Legal Department
F. Miscellaneous chargo *
G. Eection ezpenses
H. Provident Find charges
I. Debt charges
Table 5 (Continued)
II. Water Works
A. Maintenance
B. Income tax on income derived by the municipality for supply of water
to areas outside municipal jurisdiction
C. Provident Fund charges
'D. Pensions, gratuities and compassionate allowances
E. Proportion of General Administration collection of revenue
F. Debt charges
III. Museums
A. Victoria and Albert Museums
B. Provident Fund charges
C. Debt charges
IV. Free reading rooms, libraries, etc.
A. hnicipal free reading rooms and libraries
B. Municipal high schools
C. Provident Fund charges
D. Debt charges
V. Public Health Department
A. General superintendence
B. Supply of milk to the children attending m=nicipal primary schools
C. Provident Fund charges
D. Malaria eradication programme
E. Debt charges
F. Impounding stray cattle
G. Filaria night clinics
H. Census
I. Filaria programme
Table 5 (Continued)
Vt. 1bdical relief and education
A. Hospitals
B. Maternity homes and children's welfare service
C. Dispensaries
D. Family welfare planning centres
E. Medical education
F. Statutory contribution to government medical institution
G. Clinic for treatment of leprosy cases
H. B.C.G. vaccination
I. Grant-in-aid to public institutions
J. Provident Fund charges
K. Debt charges
VII. Street cleaning, conservancy and halalkhore service
A. Street cleaning and conservancy
B. Collection, loading, removal and disposal of town refuse
C. Halalkhore service
D. Provident Fund charges
E. Pensions, gratuities and compassionate allowance for halalkhore service
F. Debt charges
VIII. Roads, storm water drains and public lighting
A. General
B. Maintenance of roads
C. Public lighting
D. Maintenance of storm water drains
E. Upkeep of ferry boats
G. Rebate on account of the compounded wheel tax
H. Provident Fund charges
I. Debt charges
J. Proportionate cost of collection of wheel tax at 5% of A & C's Department,excluding V.I.P. tax
Table 5 (Continued)
IX. Mechanical
A. Mbchanical Engineer's office establishment
B. Maintenance of electric installation
C. Provident Fund charges
D. Debt charges
X. Buildings, land acquibition and management
A. City Engineer's central office establishment
B. Inspection and supervision of private buildings
C. Architectural
D. Land acquisition and management
E. Inspection and supervision of factories and workshops
F. Industrial estates
G. Provident Fund charges
H. Debt charges
I. 20% proportionate cost on all of the staff of the General Planning
Section of CE's Department
XI. Fire Brigade
A. Maintenance
3. Provident Fund charges
C. Pension, gratuities and compassionate allowances
D. Prcportion of general supervision
L. Debt charges
XII. licensing, removal of encroachments on public streets and administration
of Shops and Establishments Act, 1948
XIII. Gardens, recreation centres and open spaces
A. Gardens
3. New gardens, recreation grounds ...
C. Roadside trees
Table 5 (continued)
D. Open air theatres
E. M.G.M.O. swimming pool
F. Raja Baldeodas Birla Kreeda Kendra
G. Sirdar Vallabhbhai Patel Swimming Pool Xmdivali
H. Ghathaper Lion's municipal a-ieming pool
I. Provident Fund charges
J. Debt charges
XIV. Markets and slaughterhouses
A. Markets and slaughterhouses
B. Provident Fund charges
C. Pension, gratuities and compassionate allowances
D. Proportion of general administration
E. Debt charges
X7. Contributions to
(a) Budget 'B' under section 125 (2) (d) of the BMC Act
(b) Budget I.E' under section 126 a (e) of the BMC Act
(c) Special contribution to Budget 'E' under section 126 C (c-1) ofthe BMC Act
(d) Welfare and Fines Fund
XVI. Miscellaneous
A. Provident Fund, pensions, gratuities and compassionate allowances
fII. Measures for civil defence
XVIII. Contribution to Bombay Building Repairs Reconstruction Board constitutedby government of Maharashtra
IX. Contributions to B.E.S. and T. undertaking
50-
on equipment, indiding idle stock, are -- for the most part-- included in
two heads, purchases of plant and machinery from different special funds
(Division 1), and advances for purchases of plant and machinery (Division
II and III). (See Table 6). Scme are also included in the budget head
":Medical Relief and Educationff
7. Budget B
Budget B consists of two parts -- a slum improvement account,
and a slum clearance budget (see Table 7). Originally, this budget was
to include only the accounts of the Bombay Improvement Trust which, until
its merger with BIC in 1933, was an autonomous agency operating within
the city for the construction and maintenance of tenements for low and
middle-income workers (mostly chawls). However, budget B was expanded
to include the improvement of housing and housing amenities in general
and later to include slum clearance. The first,part, the Slum Improvement
accounts: (general and capital accounts), cover incomes and expenditures
related to the BIT's properties and the slum improvement program started
by the Corporation since 1968-69. Before this date, expenditures on slum
improvement which were not yet part of the institutionalized program, i.e.
Slum Improvement, were recorded in Loan works of Budget A, head XV, "Slum
Service and Village Amenities". In fact, all expenditures incurred by the
Corporation for the slum improvement program are recorded in the General
1/ This account is not explicitly called Slum Improvement in the Budget
Terminology, but only "General AccountT and "Capital Account1t.
- fl -
Table 6: A Loan Works Bud2et Afor the Pur&case of Plant and Machinery
(Division I)
I. Receipts
- Opening balance
- Advances from various funds: Net Fremia 1und; Fire and Accident
Insurance Fund; Hospital Fund; Plant aid Machinery Depreciation
Fund; K.E.M. Hospital and G.S.M.. College Equipment Fund; K.E.M.
Hospital and G.S.M. College. lResearch Fund; Land Aeclamation and
Acquisition Fund; Special Fund; Motor Vehicles (Third Party In-
surance) Fund
II. Payments
Payments from the various special funds (classified by fund) to:
I General supervision
II Water Works
V Tublic Health Department
VI Medical relief and medical edacation
VII Street cleansing, etc.
VIII Roads, storm water drains and public lighting
II Mehanical
I Buildings
I FiX-e Brigade
XIII Gardens, etc.
Mu=icipal Printing Press
Mechanical Transport
Rota Printing Unit
1/ Ba,,d on "Budget Estimates A, B, C and E 1973-74 as adopted by theunicipal Corporation of Greater Bombay under section 129 of the EIC Act.
52-
Table 7: FORMAT OF BUDGET 3
I. Slm improvement Budget
A. General Account
Receipts
- Rents and other proceeds of properties
- Contribution towards improvement schemes from the Municipal Corporation
under Section 125 (2) (d) of the Municipal Corporation Act
- Grant-in-aid for meeting deficit in the general account
- Interest and profit on investments
- Miscellaneous receipts
- Appropriation from capital account to meet deficit in the general account
Expenditures
Maintenance of properties and streets
Cost of management and establishment
- P'oportionate charges on account of municipal supervision
- Debt charges
- Transfer of surplus to capital account
B Capital Account
Receipts
- Sale proceeds of lands and buildings
- LOans
- Surplus transferred to capital account
Table 7 (Continued)
Exenditares
- Bombay improvement-trusts classified by property
- 'ransfer to general account
II. Improvement Schemes Account - SMum Clearance (City)
A. General Account
ReceiDts
- Rents and other proceeds of properties
-Contribution from the Mnicipal Corporation
- Interest and profits on investments
- Miscellaneous receipts
- Appropriation from capital account to meet deficit in the general account
Ependitures
- Maintenance of properties and streets
- Proportionate cost of management and establishment
- Proportionate charges on account of Mhnicipal supervision
- Debt charges
- Surplus transferred to capital account
B. Capital Account
Receipts
- Sale proceeds of lands and buildings
- Miscellaneous
- Revenue surplus
- Improvement or betterment charges liable under Section 354 of the RMC Act
Table 7 (Continued)
- Subsidy from government
Central government 37½ %
State goverment 12½ %
- Loans from government
- Loans from the public
Expenditures
- brks to be carried out from Municipal Fand
- Works to be carried out with government aid
- Transfer to general account
III. morovement Schemes Account - Slum Clearance
(Suburbs and Extended Suburbs)
A. General Account
Receiots
- Rents and other proceeds of properties
- Contribution from Municipal Corporation (Suburbs); cf. C.R. No, 1193,of 19-11-56
- Interests and profits on investment
- Miscellaneous receipts
- Appropriation from capital account
Exoenditures
- Maintenance of properties and streets
- Proportionate cost of management and establishment
- Proportionate charges on account of municipal supervision
- Debt charges on loans
Surplus transferred to capital account
Table 7 (Continued)
B. Capital Account
Receipts
- Sale proceeds of lands and buildings
- Miscellaneous receipts
- Improvement or betterment charges liable under section 354 UA of the BMC Act
- Subsidy from the government
JTom cantral government 37½%
From state goverment 12½ %
- Loans from the public
- loans from government
-Revenue surplus
Exenditures
- Torks to be carried out from Municipal Fund
- Works to be carried out with government aid
- Transfer to general account
Account of Budget B. The works executed under this program are not regarded
as capital expenditures -- although some roads may be built or public
lighting installed -- since these works are only temporary and will
eventually be removed. Therefore, the Capital Account refers only to works
done in connection with the BIT's properties. The second part is the slum
clearance program, which is divided into slui clearance (city) and slum
clearance (suburbs7and extended suburbs).
8. Budget E
Budget E deals exclusively with primary education and therefore
records only a part, albeit the largest one, of the educational activities
of the Corprration. The format is described in Table 8. Revenues and
expenditures in the fields of secondary education and medical education
are recorded in Head IV, "Free Reading Roans and Libraries" and Head VI,
"Medical Relief and Education" of Budget A, respectively. Figure 8 (see p. 68 below)
describes the budget format in general lines.
9. Budget C
All operations related to the activities of the BEST Undertaking
are recorded in this budget. This budget is presented along lines similar
to Budgets A and E (see Table 9). However, in the loan works budget,
expenditures on equipment are integrated under each major function. They
include'expenditures on furniture and office equipment, tools and equipment,
and other items which are usually regarded as current expenditures.
10. Special Funds
There exist a number of special funds attached to each budget.
Two special funds are statutorily created, the Fines Fund and the Welfare
Fund. The Corporation may create special funds and may occassionally transfer
monies from the Municipal Fund to a Special Fund.
Table 8: FORMAT OF BUDGET E
(Primary Education Budget)
I. Current Account
Income
- Education cess
- Contribution towards primary education from Municipal Corporation under
section 1260(c) of the BMC Act
- Special Contribution from the Corporation
- Contribution from government under clause 2(e) of Schedule BBA of the BMC Act
- Interest on endowments and investments
- Rents and other proceeds of properties
- Interest and profit on investments of surplus, loan and other balances
- Miscellaneous receipts
Expenditures
- General supervision and administration
- Municipal primary schools
- Private primary schools
- Medical inspection of school children
- Enforcement of compulsion
- Educational activities
- Pension and Provident F.nd
- New works
- Debt charges
- Training facilities for municipal teachers
- Proportionate cost of collection of education cess
- Extracurricular activities
- 58 -
Table 8 (Continued)
II. Loan Works Budget
Income
Loans
Expenditures (by project)
City Section
Suburban Section
Extended Suburban Section
Trust Fund
Source: BMC Budget Estimates, 1973-1974
. - 59-
Table 9: FORMAT OF BUDGET C
(Banbay Electric Supply and Transport Undertaking)
I. QUrrent Accou t
Sumary of Income
I. Administration
- Interests on internal funds and other investments
- Miscellaneous
II. Electric Supply
- Sale of energy
- Street lighting
- Sales servicus
- Show room, domestic electrical appliances, service depot
Sales, hire, etc.
- Sales, hire and repairs to electrical appliances
- iscellaneous
III. Buses
- Traffic receipts
- Engineering receipts
- Rents of buildings and lands
- Ticket printing press receipts
IV. Trolley buses
- Traffic receipts
Transfer of surplus cash balance from Budget A to Budget C
- 6o -
Table 9 (Continued)
Summary of Expenditures
A. General administration
B. Electric supply
C. Buses
D. Trolley buses
E. Provision towards Renewals -,qnd
F. Provision towards Third Par#y Insurance Fund
G. Provision towards Fire and Riots Insurance Funds
H. Suspense
I. Writing off part of Goodwill paid to the BEST Co Ltd
J. Tansfer to the Mnicipal Fund under Section 46OKK(2)(e) of the
Municipal Act
K. Transfer to various special Thnds
II. loan Works Budget
Income
Internal Resources
Public loans
Exnenditures
- General Administration
Land and buildings
Motor vehicles
Tools and equipment
Furniture and office -quipment
- Electric supply
Land, buildings and equipment
Cables and Mains
Table 9 (Continued)
Meters
. Meter installations
Street lighting lamps
Automatic control of street lamps
DEA on hire
Motor vehicles
Tools and equipment
Furniture and office equipment
- Buses
Land and buildings
Purchase of buses
Motor vehicles
Tools and equipment
Furniture and office equipment
- Tramways
Permanent way works
Source: BM Budget Estimates, 1973-1974
-62-
(a) Fines Fund This fund is used to enhance the well being of the
municipal employees (excluding BEST employees) by: (1) maintaining libraries
and readin27tg roams; (2) contributions to sports; (3) aiding institutions
establishe, for the benefit of municipal employees; and (4) payment of
compassionate allowances to municipal employees, dependents, or relatives.
Receipts are comprised of fines recovered from municipal employees, contributions
from the revenue budget (Budget A) and interest on investments. Expenditures
are on : (1) welfare activities for municipal employees, and (2) payment of
compassionate allowances to the widows of the municipal Lmpldyees.
(b) Welfare Fund This fund is to meet the expenditure on welfare
activities of municipal employees (including BEST employees). Receipts
consist of: (1) contributions from Budget C (BEST budget) and Budget A;
(2) fees charged to members of municipal staff library; and (3) interest on
investments. Expenditures consist of: (1) welfare activities of the staff;
(2) grants of scholarships to sons and daughters of municipal employees;
and (3) provision of free medical aid to municipal employees.
(c) Municipal Fire and Accident Insubance Fund The fund is designed
to meet charges on account of loss or damage to municipal properties by
fire or by accident. Receipts come from contributions from Budget B and E
and interest on investments.
(d) ,Net Premia Fund Formerly when capital market conditions were favorable,
municipal loans could be, and were, issued at premium which were credited to
a soparate fund called Net Premia Fund. There is no contribution to this
fund from general revenue. Also, credits consisting of any amounts certified
by the Accountant General of Maharashtra State to be in excess of Sinking
- 63 -
Fund, are transferred to this Fund. Other receipts are from the sale of
watermarked paper and profits on sales of securities in the Fund.
Expenditures are made on- losses on issue of debentures, cost of
printing debentures of public loan loans, cost of watermarked papers, and
to finance the deficit of the sinking fund. The interest of this fund is
credited to the revenue budget.
(e) Plant and Machinery Depreciation Fund This fund was constituted
to meet the charges for replacing plant and machinery purchased out of revenue.
The receipts consist of ammounts of depreciation on plant and machinery.
Currently plant and machinery are being purchased with advances from
Special Funds and the same is being repaid in installments debited to
different service heads.
(f) Hospital Fund This fund was started in order to improve hospital
facilities in Bombay. The interest from this fund is used for maintaining
the General Ward at the K.E.M. Hospital. The receipt' consist of contributions
from government from the Hospital Day Race. Expenditure is provided for
under the revenue service Head since interest on the Fund is credited to
Revenue. Since the total of the fund is to be restricted to Rs 10 lacs,
in the future, expenditures on capital works by certain added hospital
facilities will also be met from this source.
(g) K.E.M. Hospital and G.S.M. College Equipment Fund This fund was
started for purchasing costly equipment for K.E.M. Hospital and G.S.M.
College. Receipts consist of contribution from budget grants under head VI,
medical relief and education. Expenditures are for replacement of plant and
machinery, apparatus and furniture at K.E.M. Hospital and G.S.M. College.
(h) G.S.M. College and K.E.M. Hospital Research Fund This fund was
started to meet the cost of the Gtaff and equipment in connection with
research undertaken by the College and the Hospital., Receipts consist of
interest on investments, and subisidies given by the Government. Expenditures
are made on staff, equipment, and for research carried out by the K.E.M.
Hospital and G.S.M. College Staff.
(i) Land R.A. Fund (1957) This fund was utilized to meet expenditures
on land reclamation schemes and onsland acquisition -- especially for housing
purposes. Originally an amount was credited to this fund liquidating the
following funds: (1) depreciation fund; (2) renewal road surface fund; (3)
precast concrete slab pavement renewal fund; (4) garden fund; (5) Victoria
and Albert Museum Fund; and (6) slum service fund. Thus far, the amount
has not been utilized for reclamation of land and acquisition of land for
housing purposes so far.
(j) Motor Vehicles Third Party Insurance Fund The fund was created to
meet the charges on account of loss by,or damage to, municipal lorries.
Receipts consist of contribution from municipal revenue, and the fund
accumulation are to be limited to Rs 12 lacs.
(k) Pension Fund (1960) This fund was started to meet the expenditure
on account of pensions to the retired municipal employees. Receipts
consist of contribution from budgets A, B and E and interest on Investments.
(1) Gratuity-Fund This fund was started to meet the expenditure on
account of gratuity payable to the municipal employees at the time of retirement.
Receipts consist of contribution from Budgets A, B and E and interest on
investments.
-65 -
11. BEST SDecial Funds (Section 460LL of BMC Act)
If, after making allowances for the matters mentioned in the Act,
there remains any further surplus balance of incCMe over expenditure in
the Revenue Account of the BEST Fund, each surplus is to be disposed of as
follows:
(a) 30 percent of the surplus shall be credited, under a separate
heading in the accombs, to a special fund to be called "the Revenue Reserve
Fund" if the balance of the Revenue Reserve Fund does not exceed 50 lakhs
of Rs. If the balance exceeds 50 lakhs, the surplus (above 50 lakhs) shall
be added in equal shares to the amounts., credited or transferred under
clauses below.
The Revenue Reserve Fund shall be applied to the following purposes:
(i) to make good or reduce any deficit in the amount to be transferred
in any year to the municipal fund (under section 46OKK).
(ii) in meeting any charges to be defrayed ot of the Bombay Electric
Supply and Transport Fund it the balance available in the fund is insufficient
for the purpose.
(b) 30 percent of the surplus and such additional amount as may beavailable under clause (a) shall be credited under a separate heading in the
accounts to a special fund called the Bombay Electric Supply and Transport
Betterment Fund. The Bombay Electric Electric Supply and Transport Betterment
Fund shall be applied to the improvements in the services, amenities, and
facilities provided for the public by the BEST undertaking.
(c) 25 percent of the surplus and such additional amount as may be
available under clause (a) shall be transferred to the municipal fund for
credit to the Welfare Fund.
- 66 -
(d) 15 percent of the surplus and such additional amount as may be
available under clause (a) shall be transferred to the municipal fund (Section
469L).
12. Budgetary Process
Three major steps characterize the budgetary process, First, at
the administration level the Municipal Commissioner and the General Manager
prepare the budget estimates at the level of detail required by the House.
They determine the aggregate level of expenditures on the basis of estimated
income and allocate the expenditures between activities. They also propose
changes in th-erates and charges.
Second, at the committee level the Standing Committee,
the Education Committee, and the BEST Committee study the
estimates prepared by the Municipal Commissioner and
the General Manager in sessions attended by these two officials, and approve
them after consultation. They may change the structure and the composition
of the budget only after discussion with these two officials. They must
approve any changes in rates and charges.
Third, at the House level, the estimates of the four budgets, as
well as changes in rates and charges, are finally adopted by the Corporation.
This last step is purely formal and no major change takes place at the level
as may be seen from the comparison of adopted and approved budgets as in
Table 10.
There is no involvement of higher levels of government in this
procedure. It can be seen from this brief description that the primary
responsibility rests with the Municipal Commissioner and the General Manager.
A more detailed description of the budgetary process is presented by budget
below, and is summarized in Chart 8.
Table 10: COMPARISON OF ADOPTED AND APPROVED BUDGET ESTIMATES j/ 67
Estimated EstimatedOpening Closing
Budget A Income Expenditure Balance Balance
6566(1000 Ra) ('000 Rs) ('000 Ra) ('000 Rs)
hn!icipal commissioner 254,755 281,166 36,600 10,239Standing Committee 264,837 283,702 36,600 17,785Corporation 264,837 283,702 29,959 11,09
68-69 .*.
xgnicipal Commissioner 395,334 411,150 37,117 21,301Standing Committee 413,118 412,678 37,117 37,557Corporation 413,118 412,678 52,835 53,275
73-74 1 -
Municipal Commissiner. s744,516 735,796 1,34e2 10,062Standing Committee 770,516 749,479 1,342 22,379Corporation 783,916 762,037 .1,633 36,513,
Budget C
65-66
General Manager (BES & T) 191,767 194,770 100 2,903BEST Committee 193,267 193,267 100 100Corporation 193,267 193,267 100 100
68-69
General Manager (BES & T) 260.,;6Pf 260,162 100 100BEST Committee . 26,676 260,676 100 100Corporation 260,676 260,676 100 100
73-74
General Manager (BES & T) 395,542 395,542 100 100BEST Couittee 396,923 396,923 100 100Corporation 396,923 396,923 100 100
BudgetE
65-66
Mnicipal Commissioner 50,630 54,068 -3,526 88Education Committee 50,630 54,071 3,526 85Corporation 50,630 54,126 3,629 133
68-69
iunicipal Commissioner 79,409 83,694 5,142 857Education Committee 79,409 83,694 5,142 857Corporation 79,409 83,694 5,328 1,043
73-74
Municipal Commiesioner 115,003 115,068 674 - 609Education Committee 115,003 115,574 674 103Corporation - 115,003 . 115,574 . 782. 210 -
1/ Approved by the Standing Committee and adopted by the Corporation.
Source: BMC Budget Estimates
69,-
The Municipal Commissioner, in conjunction with the Chief
Accountant, formulate budgets A and B on the basis of estimates prepared
by the department heads and the ward officers. Each Department Head
sends budget estimates of expenditures and incomes for their respective
Department to the Municipal Commissioner. The Ward Officer also prepares
expenditure estimates based on needr;, however, no income estima- es are
prepared at-the ward level. In spite of this procedure, there is no
specific method of allocating expenditures between wards. Such allocations,
as presented in the Budget Appendic-es, are made ex-post. The Municipal
Commissioner and Chief Accountant determine the level of expenditures
on the basis of the overall metropolitan area needs, subject to the expected
level of receipts. The Municipal Commissioner is required to submit a balanced
current budget, but_ estimates of capital expenditures are larger than
receipts because the level of expenditures actually incurred will be much
lower. As noted above, the Municipal Cbmmissioner may, and does, initiate
changes in tax rates or service charges. By November 10 of each year, he
must provide: the Standing Committee with estimates, for Budget A, of
expenditures, and of all balances which will be available for reappropriation
or expenditure at the commencement of the next fiscal year. Also, estimates
of both the Corporationts receipts and income for next year other than those
from taxation, and the amounts due to be transferred during the ensuing
year to the Municipal fund under provisions 460KK and 460LL are required
(transfers from the BEST fund necessitate a statement of proposals as to the
taxation necessary to impose under the provisions o.-"' the Act for the next year).
For Budget V, the Commissioner must provide the Standing Committee with an
- 70 -
estimate of the transfer from budget A to budget V, an estimate of the
Corporation's--receipts and income from budget B(sales and rents of
lands and buildings, and interests and profits), and an estimate of
other income and receipts of budget B (including state government grants).
The Standing Committee, on the recommendation of the Municipal
Commissioner, fixes tax and octroi rates subject to the provisions of the
Act regarding taxation. It must also allow for payment of all sums aid
of all installments of principal and interests for which the Corporation
is liable under this budget; and allow for appropriations to budget estimates
B and E of the sum estimated, subject to the statutory ceilings. Finally,
it must allow for a cash balance of not less than 1 lakh rupees (budget A).
The Standing Committee may, if necessary, make proposals to meet any estimated
deficit in Budget B by borrowing, provided that borrowing for that purpose
does not exceed 2,000,000 Rs. The Estimates as approved by the Committee
must be sent to the House not later than December 15.
The preparation of Budget E (Primary Education budget) follows a
similar procedure. The budget estimates are prepared jointly by the
Municipal Commissioner and the Education Officer, under the exclusive
responsibility of the Municipal Commissioner. The Education Committee must
receive no later than November 10 estimates of expenditures, all balances,
the proposed transfers between budgets A and E and other receipts. The
Education Committeee must provide for payment of interest and principal
and allow for cash balances of not less than 20,000 Rs.; but it has no power
to determine the rates of the earmarked taxes for education. Budget E is
then forwarded before December 15 to the Standing Committee which must in
turn prepare a report to the Corporation incorporating the remabks and
recommnedations of the Standing Committee.
- 71 -
Budget C is prepared by the General Manager of the BEST under-
taking. The Manager must prepare by October 10 an estimate of expenditures,
an estimate of all balances, if any, which will be available for reappropriation
or expenditure at the commencement of the next year, an estimate of the amounts
which will be transferred to the municipal fund (under sections 46OKK and 46OLL)
and an estimate of receipts and incomes. The BEST Committee fixes, on the
recommendation of the General Manager, the levy of fares and charges at
such rates as would, in its opinion, provide an adequate revenue for meeting
the proposed expenditure, subject to the provisions of the Motor Vehi.cles
Act 1939, and the Electricity (Supply) Act 1948. It must also provide for
the payment of all sums and of all installments of principal and interest for
which the Corporation may be liable under this Act by reason of the acquisition,
extension, administration, operation, and maintenance of the BEST. Finally,
it must allow for the amounts to be transferred during next year to the
Municipal Fund (as provided in Sections 46OKK and 46OLL) and for a cash
balance at the end of the next official year of not less than 1 lakh rupees.
These estimates, as approved by the BEST Committeej for comments, no later
than December 1.
The Corporation must adopt, by January 30, municipal tax rates, the
list of articles subject to the octroi tax, and the rates of the fares and
charges for the BEST.
-72-
IV. EXPENDITURE STRUCTURE AND GROWTH AND CAPITAL FINANCING
A. Expenditure Data
The results presented here are drawn from the budget estimates
and accounts documents of BMD - The activities of the
corporation were divided along classical lines for analytical purposes, since
one goal of this series of papers is international intercity analysis. The
content of the functions is detailed extensively below. Finally, all data
presented are actuals (as distinguished from budget estimates) unless other-
wise noted and correspond to actual disbursements, since the accounts are
prepared on a cash basis. A few remarks concerning the data and the terminology
may facilitate understanding of the presentation below:
"Total Expenditures" ara the sum of the annual current and capital expend-
itures presented in the four budget accounts of the corporation from which net budget
transfers were subtracted. Expenditures financed out of special funds were
therefore excluded, with the exception of expenditures on plant and machinery
met out of these special funds, which are all recorded in the various loan
works budgets (this is particularly important in the case of budget A). The
exclusion of special funds expenditures does not introduce a significant
distortion in the cash picture presented.
"Current expenditures".exclude depreciat.ion and expenditures
on New Works.
"Capital expenditures" include three main items: expenditures
on lands and buildings, new works which are included in the revenue income
and expenditure accounts, and expenditures on piant and machinery. To the
- 73 -
extent that-it was possible, only heavy and highly technological equipment
were included, leaving in particular some rolling stock out of the
capital expenditure category. For example, ambulances and fire trucks
were indiluded whereas cars or trucks for the use of department staff were
treated as current expenditures.
It was not always possible to break down certain budget
headings. Four main cases specially important here. Capital expenditures
on Roads and Bridges are understated in our table since-no breakdown was
given for some projects, including both works on sewerage and road
works. In that case, these projects were imputed to the Storm Water Drains
function. Careful interpretation is required regarding the current expenditures
and capital expenditures allocated to sewerage works since data on night
soil collection for all the selected years was unavailable. Similarly, the
housing function is incomplete because of the absence of capital expenditures
of the Corporation. Indeed, two types of housing are provided by the BMD--
namely, houses for municipal staff and housing in slum areas. Capital
expenditures on the first type of house are credited to the departments
concerned and no attempt has been made at this point to extract these
statistics; in any event, current expenditures relating to this activity
are not traceable. The;second type of housing is included in the slum
improvement and clearance function.
B. Expenditure Level and Trend
A summary of total expenditures broken down both by major function,
and between capital and current expenditures for three selected years is presented
. 74-
in Table 11,-The composition of each function is detailed in the extensive
footnotes to the Table. The same data are presented on a per capita basis in
Table 12. Population estimates are presented in Table 13. The consumer
price index for the working class, established by the State, is used here to
deflate expenditures (See Table 14). The state also prepares a_CPI for non-
manual employees.
On an overall basis, total expenditures at current prices
increased by 10.5 percent between 1962 and 1971. Given"consumer
price increases of 5.9 percent per annum, the increase in real terns has
been substantially less. And, when measured on a per capita basis at constant
prices, total expenditures increased only by 0.7 percent annually
during the last decade. The ratio--of capital to total expenditures has
been always relatively high despite a declining rate of invesitment growth
in recent years; capital expenditures are presently 16 percent compared
to 21 percent in 1962-63.
With respect to the functional distribution of the expenditures,
the major activities of B:MC are in the fields of social services, with
public health and education each accounting for about 10 percent of total
expenditures, and transportation and electric supply for about 16 and 13
percent respectively (Table 15). The relative share of debt charges is
also significant, at about 14 percent of all expenditures. Comparisons
with other service functions emphasize the relative importance of these
expenditure classes: Water supply (7 percent), sewerage (3.5 percent)
roads and bridges (6 percent) and refuse collection (4.3 percent). Over
the decade compared in Table 15, there was some noticeable change in the
Т вЪ 1� 11: EКPENAINF � 3 Н У FUNCTIOII � J � 1YDA7 Y.ПNICIPkb coftPOI ц TION. . 1962,1969, 1971(R � . � OOOj
�
.
`
1
'
Aver дgo Arinu я l R д ts о Г orotrth (2 � 1 A � crare Ап пи а l А а ; с of Crcvth (w)1962 1969 1971 19 2_ q 19 9-71 9- 1962 19 Ь9 1971 ое - � !- _ = � -.к t: ег Э1,5 зз , Ь , о 59 г5,1 з 4 1 з . ах - о .5 � 1 о .1 х наиа �л 995 г , гбб гз ,484. 15.7% (*) f+) -
сп -- е .. � 1/ zo,e,z з7,8s4 а 9, оз 4 в .9 � -- ц . г�х з . зх � rsont 1z! 995 2, хбь г7,4 вц 15.7 � С � ) i � )_:. � 1 � 1 - 1 о , б !,1 38,1v 46,1 оо zo.o � 9.9� 2.xyL сдр lt аl- - - - - - -S^ � .г r� ,;o 16,285 29,153 Э8,978 8. Т � 15. Ь 4 10.2; д , Tran з� t д ilon д 1,565 167, з 17 174,57 Ь 10.8 � 2.I � B.II:
Сц .- г в л t 3o,L69 22,197 27,319 ц .3¢ ц . о� 11.2 х C� urr в nt 15! Ь В ,965 146,717 16 о , б T б ц .41 4. Ь К 9.9 Кс с , � гз 1 5,81 з G,956 11,659 2. Ь ;I 29. � 8.0 � Capltal IS/ 12,600 20,600 13,90 � 7. Э � -18.C1,i 1.1 х
& � ь; лr � � ^_ 2,551 8,764 13, оз 7 18.8 � 22. О К 19.9 А Eleatrlclty 47,814 114,7o �i 14 Ь ,711 1 з ,3 � 12.3 � 13 � 1 х-f'-'.l.l"
.�Curr в nt 1?f 39,485 92, Т24 ц г ,792 13.0 � 15.1 � 13. � °
Q:r^ent 3J Зз � , 1,187 2,372 19.9; � 42.0 � 24.0$ С др lt а l I8/ 8,329 21,981 21,919 1L.97 - 0.5 � 11 � %+5."� . р1 � 1 Г / z,u7 7,577 1 о , б65 19.2 � 18.6� 19.i � ,j Debt С h д г р, о а 91,696 137. о 45 15 В ,453 5 � 9 А 7.5° Ь .3f� � � г '-'^ 2 зз ,1 � 8 50,235 65,27 Т 6.1 � 13.9 � 7.Bz -`'- � � " з
Current 19/ 91,696 1 Э ?,olti 158,45 Э 5.916 1.5 Х Ь � Э лcapltal - - - - - '
с� г. с: �с s/ 1 г ,5 э г зт, т; ь 45,h54 17. х� 9.7� 15.4��-:.ig.zal о / 2 с , ь 11 12,509 ь 9,323 � - 6.8 А гб . о� - о .5 � рагм� а г ,1 зз 4, ЬЬ 5 4,67 ь ц .8$ о .1 � 9. �'G г. г-7 сп з
°Р -� ?{ с 31,114 В 9,1; Е 6 110,l:67 16.9 � ц .1 � 15.1Z � � rr в nL 2� / 1,159 Э ,29 о ",5 С8 16.1 � 3.3;[ 13.1 р`_-4. у
' Capital 974 1.,375 1,16 В 5 � 1 А В . о$ 2. о7Е 'i` � rrenL 7/ 27,684 82,6 Э 5 1o5,3 �t2 16.9 � 12-9 � 16.0 � �' с� .._r<1 - з ,h зо 6,851 5,125 1 е .4 � --14. о� 4.6 � магкв t з а� з , з 95 16,194 1 ь, ь09 25. с� 1.3 � 1 я. з�
' s-'7ca � ;Tiг̀е г -_ �._ � ._:::1� ам зт ,7 з5 ед , бзб ц 4. г!�Ь 1 г .z р 1Ь .5 Р 1 з .2$ -l, ofi'�m ar_� - .� .:_, е: �с 8/' 29, зо4 7г ,423 91+,678 11,.9 � 10.Ь� 13.9� ' Си г ^ent � 2,741 5,493 6,926 1 о .4 � 12.з° 1с . г�еаеl г� l - 8,431 7,z13 z о , оь8 - г . э 65. о� 1o.19i сдр l с� l 654 1 а ,7 о1 S, Ьд 3 49. еп - 5.0' Э L. стХ
Fc � 1:= ci, � 1 Р � 4 о9 4,856 Ь , б91 42. о� 17.4 Х зб . о� � ' cemet вri в s 292 774 7., оз 9 14:94 15.9 � 15.1l6� _ е : е з-s
е.
carr вnt z2/ 34 626 есг 5 о . о� 1 з .1 � 4 г . сkс., ггеп t 9! Lo9 4,85 б б , б 91 4г . оР 1 Т .4 � Эб . о� � cspital r г 58 ц ,8 2 з 6 - 7.5 � 27. о ;; - 1.0,'.i. д 71 � С 1 - - - - - - . . ��.s
51 и т 7т р г оv. 21,247 18,246 2 Ы b41t � 2. О Р ц � � 1 � S°а_� .- е 2,13 Э Э ,711 4,576 8.2° г 11. о °. 8.9 � а С 1 е :ьг д пс о ,
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Ins�m r:.nc в ,Sс h ет� ез� '.
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ц / 1 г :701 33,499 44,lt5S 9.6;L 15.2$ �
10.8 р
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е л
с� р . са 1 ь l; ц - 3,w5 ' . � с » г гА п +. z к / 1 Э , л .х S 28, э з п зЬ , з 57 ц .8 о х с .1 � ц . ь .Сд р 1t¢Q - - - - - -� � -,__ ^____� ; п { у_ 19,ar5 45, г,s5 5о , эз1 1 з . з� з � 1� 1o.zys
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_се . з � � s г5- та тотяг 455, обо 9 хб , ез 4 1,114,221 1 о .5 � 1 о .! � 1 о .; р_ � � г ::: k: г.� : ч2 3cc � anLs, 1) Ь 2-19' Л . Curren2 360,395 -7б9,83о 93Ь , Э51 ц .5 р 1о .} р 11.2'
- сдр l w' х 94, бь 5 147, о04 181, е7 о б . зэ� ц .. г� т .4 � ,
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Footnotes to Table 11
Table 11: &UENDITURES BY FUNCTION - BOMW MUNICIPQ CORPORATION
1962-1969,1971
(Rs.1OOO)
J/ "Whter *rks" Budget A., Head II include A. Maintenance: expenditures on
establishment2 transport charges., costs of water supplied to the
areas merged
into Greater Bombay., Payment to the Goverment for Ulhas TAUter.
B. Income
tax on income derived by the municipality from supply of water to areas
outside municipal jurisdiction.
- ater meters., supervision and departmental works on major
capital works.
2/ "Halalkhore". Budget A., C of Head VII: cleansing and sanitation; transport;
Pumping Compression Stations., Purification Works and Flo6ii Gaies; cleansing
of severs., street connections and house drains; New severs.
31 "Maintenance of Storm Water Drains" Budget A., D oZ Head VIII.
Includs expenditures related eaclusively to SW Drains as
well as expenditures
made jointly on SW Drains and Roads-when these expenditures
could not be broken down.
"Roads,, SW Drains and Pablic'Lighting" Budget A., Head VIM; General
Maintenance
of roads; Public lighting; npkeep of ferry boat (negligible);
rebate on account
of compounded wheel tax.
6/ "Roads, SW Drains and Public Lighting" loan Works Budget
of Budget A., Head III.
Some expenditures on roads are included in the 11SW Drains" function -whenever
the expenditures were jointly incurred on Drainage and roads.
7/ "Public Health Department"., Budget A., Head V and 1%dical Relief and Education"
Budget A, Head VI. Head V: General Superintendence (mims cemetery); supply
of milk., snacks...to ihe children attending Municipal Primary
schools; Malaria
Eradication Programme; Tmpoundii,,; Stray Cattle; Filaria Nigh
Clinic; Filaria
Progr *. Head VI-. Hospitals; Maternity Homes and Children Wellare Service;
dispensariP.s_,-_b1_a_="7 Welfare Planning Centers; statutory contributions to
Government Medical Institutions; clinic for treatment of leprosy
cases; BCG
Vaccination; grant-in-aid to public institutions.
8/ Education Budget (Budget E): general supervision and administration
excluding
general supervision and administration (e=luding Corporation and
Standing
Committee., Municipal Commissioner's Office establishment, Audit
and Account
establishment); Maricipa:1 Primary, schools; Private Primary Schools;
Medical
Inspection of School children; Enforcement of compulsory educational
activities (hamely operation of a Junior College of Education,
Refresher
Course for =nicipal teachers); Training facilities for Municipal
Teachers;
Extra curriculum activities.
- "Free Reading Rooms., Libraries and Municipal High Schools".,
Budget A. Head 17.
- %Iseums", Bidget A, Head III.
- 111%dical Education", Budget A, Head E of V1.
(Continuation of Footnotes to Table 11) 77
9/ "Measures for Civil Defense", Budget A,'Head XVII: Bombay MunicipalSecurity Forca, Budget A, Head B of i of A of I.
10/ "Fire Brigade", Badget A., head II.
11/ "Street Cleansing, Conservancy and Halalkhore Servicef, Budget A, HeadVII. Street cleansing and conservancy (Superintendence and inspection;destruction of dogs, licensing of dogs); collection, loding, removaland disposal of town refuse.
12/ "Cneral Administration, Collection of Revenue", Budget A, Head 1:General Superintendence minus Bombay Mnicipal Police Force; Upkeep andguarding of municipal offices; general stores; legal department;miscellaneous charges; election expenses.- Budget-A, Read IX. "Mechanical* Mechanical Engineer's office esta-
blishment; maintenance of electric installation.- Budget A, Head I. "Building, Land Acquisition and Management". City
Engineer's Central Office and establishment; Architectural; LandAcquisition and Management; Industrial Estates.
- Budget A, Head II. "Licensing, Removal of Encroachments on publicstreets and Administration of Shops and Establishment Act, 198".
- Budget C, Head A, part of general Adinistration. (ees to BESTCommittee Members, Management and Secretarial Establishment, PublicRelations Establishmsnt, Accounts Establishment, Chief Accounts,Officer's Office Establishment, Commercial Superintendent's, OfficeEstablishment, Mechanized Accounting General EstabliLhment, InternalAudit Establishment, Legal Establishment, External Audit Charges.
- Budget E, general supervision and administration (Corporation andStanding Committee, Municipal Commissioner's Office establishment,Audit and Account establishment).
13/ For budget C, loan Works Budget - include lands and Buildings, MotorVehicles, Tools and equipment, furniture and office equipment.
14/ Budget A, Head I: Inspection and Supervision of private building andmaintenance of concrete testing laboratory in Bombay; Inspection andsupervision of factory workshops and work places.Budget A, Head XVIII: Contribution to Bombay Building Repairs ReconstructionBoard constituted by Government of Maharashtra.
15/ Budget C, Heads C and D: Buses and Trolley Bases. Include also Tramwayfor the year 62-63.
16/ Budget C, Loan Works Budget - Capital Expenditures, include: lands andBuildings, Purchase of Bases, Motor Vehicles, Tools and equipment,furniture and office equipment.
17/ Budget C, Head B, "%Iectric Supply"
-78-
(Continuation of Footnotes to Table 11)
18/ Budget C, loan Works Buadget - Capital Expenditures, include: land,buildings and equipment, calbes and mains, meters, meters installations,street lighting lamps, automatic control of street lamps, DEA on hire,Motor Vehicles, Tools and Equipment, Furniture and Office equipment.
19/ Sun of debt charges in Budgets A, B. C and E. Debt charges includedebt service and repayment of loans.
20/ Budget A, Head III, "Gardens, Recreation Centers, and Open Spaces."
21/ Budget A, Head XT. "Markets and Slaughterhouses."
22/ Cemeteries in Budget A, Head i of e of A of V.
23/ Budget B: Slum improvement General AccountSlum Clearance (City) General AccountSlum Clearance (Suburbs and Extended Suburbs) General Account
24/ Budget A, Head XV, Slum Service and Village AmenitiesBudget B, Slum Improvement - Capital Account
Slum Clearance (City) - Capital AccountSlum Clearance (Suburbs and Extended Suburbs) - Capital Account.
25/ "Provident Fhnd, Pensions, Gratuities and Compassionate Allowances",Budget A, Head XVI.
26/ Reclamation Works, Development Plan for Greater Bombay and Acquisitionof Land for various purposes, TP schemes.
Table 12: PER CAPITA EXPENDITURES BY FUNCTION - BMC
(in rupees)
Avg. Annual % Avg. Annual % Avg. Annual 7Rate of Growth Rate of Growth Rate of Growth
1962/63 1969/70 1971/72 1962/69 1969/71 1962/71
1. Water 7.32 13.70 12.58 9.4 - 1.0 6.2 2/Current 4.85 6.82 4.86 5.0 -16.0 ----Capital 2.47 6.88 7.72 15.8 5.9 13.5
2. Sewerage 3.78 5.25 6.53 4.8 11.5 6.3Current 2.43 4.00 4.58 7.4 7.0 7.3Capital. . 1.35 1.25 1.95 - 1.0 25.0 4.2
3. S.W. Drains 0.59 1.58 2.18 15.1 17.4 15.6Current 0.07 0.21 0.40 . 17.0 38.0 21.0Capital 0.51 1.36 1.79 15.0 14.7 15.0
4. Roads and Bridges 7.70 9.06 10.93 2.3 9.8 3.9Current 2.90 6.80 7.61 12.9 5.8 11.3Capital 4.79 2.25 3.32 -10.0 21.0 * 4.0
5. Public Health 7.23 16.12 18.50 12.1 7:1 11.0Current 6.43 14.88 17.64 12.7 8.9 11.9Capital 0.80 1.23. 0.86 6.3 -16.0 0.8
6. Education 8.76 15.24 19.22 8.2 12.3 9.1Current 6.81 13.94 15.86 10.8 6.6 9.8Capital 1.96 1.30 3.36 - 2.5 60.0 6.2
7. Police Civil Defense 0:10 0.87 1.12 3640 .. - 13.5 31.0Current 0.10 0.87 1.12 36.0 13.5 31.0Capital . --- *
8. Fire 0.49 0.67 0.77 4.5 7.2 5.2Current . 0.38 0.64 0.65 7.7 1.5 6.2Capital 0.11 0.03 0.12 -17.0 100.0 0.1
9. Refuse Collection 3.96 6.03 7.97 6.2 15.0 8.1Current 4.11 6.03 7.45 5.6 . 11.0 6.8Capital Cr. 0.15 --- 0.53 ..-- ---- ----
10. General Administration 4.42 8.19 8.43 9.2 2.9 7.4Current 3.69 7.02 7.12 9.6 1.4 7.5Capital 0.73 1.18 1.31 7.1 11.0 6.7
11. Housing *. 0.23 0.41 4.60 8.6 + 40.0Curre:t * 0.23 0.41 * 4.60 8.6 + 40.0Capital ----
12. Transportation 18.94 30.13 29.24 6.9 - 1.5 7.4Current 16.01 26.42 26.91 7.4 0.9 6.0Capital 2.93 3.71 2.33 3.4 -21.0 - 2.5
13. Electricity 11.10 20.66 24.24 9.3 8.3 9.1Current 9.17 16.70 20.57 9.0 11.0 9.4Capital 1.93 3.96 3.67 10.8 - 4.0 7.4
14. Debt Charges 21.30 24.68 26.54 2.1 3.7 2.5Current 21,30 24.68 26.54 2.1 3.7 2.5Capita. -- ----- . -- ---- ----
15. Parks and Gardens 0.50 0.84 0.78 7.7 - 3.5 5.1Current 0.27 0.59 0.59 11.8 0.0 9.1Capital 0.22 0.25 0.19 1.8 -13.0 - 1.5
16. Markets and Abbatoirs 0.79 2.92 2.78 20.0 - 2.5 15.0Current 0.64 0.99 1.16 6.4 8.2 6.8Capital . 0.15 1.93 1.62 44.0 - 5.5 30.0
17. Cemetcries 0,.07 0.14 0.17 10.4 10.2 10.3Current 0.01 0.11 0.13 41.0 8.7 33.0Czpital 0.06 0.03 0.04 - 9.5 15.5 - 1.5
18. Slum Improvement and Clearance 4.93 3.29 4.46 - 2.5 16.4 - 1.0Current . 1.26 2.41 3.29 9.7 16.8 11.3
. Capital . 3.67 0.88 1.17 -18.5 15.3 -12.0
19. Pension and Insurance Schemes 3.02 5.10 5.75 7.3 6.2 7.4Current 3.02 5.10 5.75 . 7.8 6.2 7.4Capital .----- ----- -. .--. .. ..-.
20. Miscellaneous 0.45 0.24 0.47 - 8.5 40.0 0.5Current ----- -----..... ...
Capital 0.45 0.24 0.47 - 8.5 40.0 0.5
TOTAL 105.69 165.12 187.29 6.6 6.5 6.6Current 83.70 138.64 136.83 7.5 6.4 7.2Capital 21.99 26.48 30.46 2.7 7.3 3.7
1/ Over 100.0% increase per year
/ Under 0.1% incruase per year .cee: Table 11
- 80 -
Table 13: POPULATION: GREATER BGCMBAY
1960 3,998,30
1961 4,152,056
1962 L,305,682
1963 4,6.,992
1964 h,630,196
1965 4 ,801.,513
1966 4,97 ,168
1967 5,163,397
1968 5,354,442
1969 5,552,556
1970 5,7613565
1971 .55970,5752
1972 6,191,486
Average annual growth rate: 3.7%
1/ Population Census 1961
2/ Population Census 1971.
Populations for other years are intrapolated onthe basis of the canpounded amaual rate of growthbetween 1961 and 1971.
- -81 -
Table 14: CONSTR:.TRICE INDEX: GREATER BCEBAY
(1961=100)
OPI forCPI for -. Non-manualWorking EmployeesClass (tUrban)
1960 100.0 100.0
1961 102
1962 106
1963 112
1964 122
1965 130
1966 143 139
1967 158 150
1968 166 155
1969 173 160
1970 180
1971 188
1972 198
Source: 1/ Maharashtra, An Economic Review 1972-73.
2/ Statistical Abstract of Maharashtra Statefor the year 1969-70.
*1
-82-
Table 15: PECENTAGE DISTRIBUTION OF EXPENDITURES B FUNCTION - EMC- 1962, 1969, and 1971
1962 : 1969 1.971
Function -Current Caital Total Current Caoital Total Current Capital. 'btal
Water 5.80 11.09 6.91 4.92 25*97 8.30 3.10 25*35 6.72
Sewerage Services -. 2g0 - 6.06 3.57 2.88 4.73 3.18 2.92 6.l1 3.49
S W Drains 0.09 2.31 o.56 0.15 5.15 0.96 0.25 -. 5.86 1.17
Roads & Bridges. 3.48 21.48 7.26 4.91 8.51 5.48 4.85 10.90 5.84
Health 7.68 3.57 6.82 10.73 4.66 9.76 11.25 2.82 9.88
Education 8.13 8.79 8.27 1o.o6 4.91 9.23 10.11 11.03 10.26
Police Civil Defense 0.11 - 0.09 0.63 - - 0.53 0.71 - o.60
Fire 0.46 o.5o o.47- .-- o.46 0.10 0.40 . 0.41 0.39 0.1
Refuse Collection 4.91 0.67 3.74 4.35 0.00 3.65 4.75 1.73 4.26
General Administration 4.40 3.29 3.17 5.06 4.45 4.96 4.5k 4.31 4.50
Housing 0.28 - 0.22 0.29 - 0.25 2.94 - 2.46
Transportation 19.14 13.13 17.87 19.06 14.01 18.25 17.16 7.64 15.61
Electricity . 10.96 8.68 10.48 12.04 14.95 12.51 13.11 12.05 12.94
Debt Charges 25.44 - 21.09 17.80 - 14.95 16.92 - 14.17
Parks & Gardens 0.32 1.02 0.47 0.43 0.94 0.51 0.37 0.6k 0.42
Markets & Slaughterhouses 0.76 0.68 0.74 0.71 7.28 1.77 0.74 5.32 1.49
Cemeteries 0.08 0.27 0.06 0.08 0.10 0.08 0.09 0.13 0.09
Slum Imorvrnt & Clearance 1.51 16.46 4.66 1.74 3.32 1.99 2.10 3.85 2.38
Pension & Insurnce Schemes 3.61 - 2.8% 3.68 - 3.09 3.67 . - 3.07
Miscellaneous - 2.00 0.42 - 0.92 0.15 - 1.56 0.25
TOTAL 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Source: Table 11
-83-
budget distribution. For example, functions whose share increased by at
least 20 percent include health, education, general administration,
electricity, storm water drains, markets and slaughterhouses, and cemeteries.
Substantial increases are also notable in the field of police, civil
defense, and housing (See Table 16 and 17). The choice of the year 1971
biases the result since emergency measures had been taken by the Corporation
to help the government of India during the Bangladesh war. Moreover, the
increase in housing is somewhat overstated because-its results partially
from the creation and activities of a new state government agency designed
to improve the supply of the housing stock in the city of Bombay,
It is important to note that ificreases in eependitur on infrastructure
and public utility services accounted for nearly 50 percent of the increase in total
expenditure over the period 1962-1971, as compared to 33 percent for social services
and acout 20 percent for general and administrative services (Table l). This
trend is also confirmed in Table 19 which deals with the functional sources
of current expenditure increase.
C. Means of Financing Expenditures
To analyze the financing of this expenditure increase, revenues
have been classfied in five broad categories: tax revenues, non-tax
revenues, self-financing projects, external aids and borrowing. A detailed
study of revenues, presented below, shows a:.:reliance on these financing
sources as follows (See Tables 20 and 21).
1. There is little reliance by the Corporation on external aid --
on an average since 1962, less than 2 percent of the total expenditures
have been financed with grants.
Table 16: FUNCTIONS WITH DECREASED OR INCREASED SHAREBASED ON TOTAL EXPENDITURES -BI
1962-71
Increase Share Decrease Share
S.W. Drains 108.9% Water 2.8%Health 44.9% Halalkhore 2.2%Education 24.1% Roads & Bridges 19.6%Police Civil Defense 566.7% Fire 12.8%Refuse Collection 13.9% Transportation 12.7%General Administration '42.0% Debt Charges - 32.8%Housing 1,018.1% Parks & Gardens 10.6%Electricity 23.5% Slum Improvement & Clearance 49.0%Markets & Slaughterhouses 101.4% Miscellaneous 40.5%Cemeteries 50.0%Pension & Insurance Schemes 7.7%
1962-69
Increase Share Decrease Share
Water 20.1% Halalkhore 10.9%S.W. Drains 71.4% Roads & Bridges 24.5%Health 44.9% Fire 14.9%Education 11.6% Refuse Collection 2.4%Police Civil Defense 488.9% Debt Charges 29.1%General Administration 56.5% Slum Improvement & Clearance 57.3%Housing 13.6% Miscellaneous 27.0%Transportation 2.1%Electricity 19.4%Parks and Gardens 8.5%Markets & Slaughterhouses 139.2%Cemeteries 33.0%Pension & Insurance Schemes 8.4% .
Source: Table 11
Table 17: FUNCTIONS WITH WCREASED AND INCFEASED FUNTIONSBASED ON CU NT EPEDITURES -B
1962-71
Increase Share Decrease Share
Sewerage 0.7% Water 46.6%S.W. Drains 177.8% Fire 1019%Roads & Bridges 39.4% Refuse Collection 3.3%Health 46.3% General Administration 3.2%Education 24.3% Transportation 10.3%Police Civil Defense 545.3% Debt Charges 33.3%Housing 950.0% Markets & Slaughterhouses 2.63%Electricity 19.6% Pension & Insurance Schemes 1.7%Parks & Gardens 15.6%Cemeteries 12.5%Slum Improvement & Clearance 39.1%
1962-69
Increase Share Constant Share Decrease Share
S.W. Drains 66.7% Fire Water 15.2%Roads & Bridges 41.1% Cemeteries Halalkhore 0.7%Health 39.7% Refuse Collection 11.4%-Education 23.7% Transportation 0.42%Police Civil Defense 472.7% Debt Charges 30.0%-General Administration 15.0% Markets & Slaughterhouses 6.6%-Housing 3.6%Electricity 9.9%,Parks & Gardens 34.3%Slum Improvement & Clearance 15.2%Pension & Insurance Schemes 1.9%
SOURCE: Table 11
-86-
Table 18: FUNCTIONAL SOURCES OF TOTAL EXPENDITURE INCREASE - BMC(OORs)
1962-71 1969-71Amount of 1962-71 Amount of 1969-71Increase % Distribution Increase % Distribution
Total Expenditure Increase 663,181 100.00 201,387 100.00
Increase due to:
Water 43,601 6.57 - 925 - 0.46 NSewerage Service 22,692 3.42 9,825 4.88
S.W. Drains 10,486 1.58 4,273 2.12
Roads & Bridges 32,129 4.84 14,992 7.44
Refuse Collection 30,543 4.61 14,101 7.00
Miscellaneous 918 0.14 1,486 0.74
Transportation 93,011 14.02 T,259 3.60
Electricity 96,897 14.61 30,006 14.90
Subtotal - 330,277 49.80 81,017 40.23
Health 79,353 11.97 20,981 10.42
Education 77,011 11.61 30,110 14.95
Housing 26,489 3.99 25,218 12.52
Slum Improvement & Clearance 5,397 0.81 8,398 4.17
Subtotal 188,250 28.39 84,707 42.06
_General_Administration 31,306 4.72 4,836 2.40
Police 6,282 0.95 1,835, 0.91Fire 2,443 0.37 865 0.43
Debt Charges 66,757 10.07 21,408 10.63
Pension & Insurance Schemes 21,342 3.22 6,027_ 2.99
Subtotal 128,130 19.32 34,971 17.37
Parks & Gardens 2,543 0.38 11 0.01
Markets & Abbattoirs 13,214 1.99 415 0.21
Cemeteries 747 0.11 265 0.12
Subtotal 16,504 2.49 691 0.34
Source: Table 11
Table 19: FUNCTIONAL SOURCES OF CURRENT EXPENDITURE INCREASE -B
(000 Rs)
1962-71 1969-71Amount of 1962-71 Amount of 1969-71Increase % Distribution Increase % Distribution
Total Current Expenditures Increase 575,956 100.00 166,521 100.00
Increase due to:Water 8,142 1.41 - 8,850 - 5.31Sewerage Service 16,850 2.93 5,122 3.08S.W. Drains 2,038 0.35 1,185 0.71Roads & Bridges 32,917 5.72 7,678 4.61Refuse Collection 26,754 4.65 10,956 6.58Miscellaneous ------- ------ * .. . --....Transportation 91,711 15.92 13,959 8.38Ele-tricity 83,307 14.46 30,068 18.06
Subtotal 261,719 45.44 60,118 36.10
Health 77,658 13.48 22,707 13.64Education 65,374 11.35 17,255 10.36Housing 26,489 4.60 25,218 15.14Slum Improvement & Clearance 14,188 2.46 6,269 3.76
Subtotal 183,709 31.90 71,449 42.91
General Administration 26,628 4.62 3,547 2.13Police 6,282 1.09 1,835 1.10Fire 2,218 0.39 311 0.19Debt Charges 66,757 11.59 21,408 12.86Pension & Insurance Schemes 21,342 3.71 6,027 3.62
Subtotal 123,227 21.40 33,126 19.89
Parks & Gardens 2,349 0.41 218 0.13Markets & Abbattoirs 4,185 0.73 1,433 0.86Cemeteries 767 0.13 175 0.11
Subtotal 7,1301 1.27 1,826 1.10
Source: Table 11
Table 20: THE FINANCING OF EuPEiDIURES - BMC1962-71
1968-71 71-72 70-71 69-70 68-69 67-6C 66-67 65-66 64-65 63-6h 62-63
Expenditures 3,848,459 1,118,221 977,476 916,834 835,927 859,83h 726,379 658,612 539,136 523,O10 k56,3h8
(RS,000)
Financing from:
Percentages from,
Tax Revenues . 37.17 37.96 38.26 36.Oh 36.06 31.14 36.66 32.19 28.25 27.38 28.53
General non-tax 7.18 7.95 7.04 6.85 6.67 6.51 7.31 7.03 7.49 6.54 7.6
Ravenues
Self-Financing 40.37 38.76 42.83 40.14 39.87 35.33 38.17- 39.44 45.72 44.80 14.79
ProjectRevenues
External Aids 1.17 .99 1.18 1.31 .1.26 1.31 1.25 1.22 2.52 1.71' 2.63
Borrowing ih.11 14.35 10.69 15.61 A16 .4 25.71 16.60 20.12 16.03 19.56 16.59
Source: BMC Annual Accounts, 1962-63/1971-72
ler
Table 21: THE FINANCING OF EXPENDITURE INCREASE- BMC - 1962-1971
68-71 71-72 70-71 69-70 68-69 67-68 66-67 65-66 64-65 63-64
Net Expenditure 306,201 140,745 60,642 80,909 23,907 133,455 67,767 119,476 16,126 66,662Increse (Rs,000)
Financing from 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Percentagesfrom:
Tax Revenues 51.19 35.84 71.89 35.82 141.00 1.06 80.08 49.99 56.37 19.51
General non-tax 10.75 14.29 9.82 8.71 -0.82 2.15 10.07 4.96 38.08 0.26revenues
Self -Financing 42.32 10.46 82.74 h3.47 123.42 19.88 25.81 11.12 75.66 h6.88Projectrevenues
External aid - 0.07 - 0.37 - 0.71 1.82 - 3.17 1.65 1.59 - 4.65 28.56 4.55
Revenues from 19.79 39.78 -63.77 10.18 -360.h2 75.26 -17.95 38.58 -98.44 39.90Borrowing
Source: Table 20
- 90_-
2. - Revenues fraa borrowing are significant. In 1965-66
and 1967-68 loans accounted for more than 20 percent of the total
expenditures, primarily because of catital expenditure financing.
3. The share of tax revenues can be regarded as relatively low.
In recent years, tax revenues were financing about 37 percent of total
expenditures,, while revenue from self-financing activities (i.e. user charges, etc.)
account for almost 140 percent. However, the tax revenue share has grown
throughout the period studied.
D. Financing of Capital Expenditures: BMC
Nearly all BC capital expenditures are financed by laans, since
current surplus and capital receipts other than loan proceeds have been
relatively small. Loans are raised from the government, the public, and
fran internal funds. Government borrowing represents a very small proportion
of total borrowing and is usually earmarked for specific programes., As
noted above, these loans are issued in conformity with the requirements of
the Reserve Bank of India and of the Central Government. The State
Government establishes every year a ceiling to the borrowing that the
Corporation can make from the public. This ceiling is based on the
ceiling authorized by the Reserve Bank on the borrowing of all municipal
corporations in the State of Maharashtra and on the estimated requirements
of the BMC. The loans are for the most part made by banks and other
institutions and rarely by individuals. Currently, these loans must be
raised at a prescribed interest rate ard for a life of 12 years. In 1973 the
prescribed rate of 6 percent was well below the free market rate,
-91-
thereby providing a form of subsidy to the BMC. The
Corporation apparently has no problem in raising such loans; the availabilityof subscriptions to these loans is attributable to the fact that bankinginstitutions are required to invest a minimum proportion of their depositsin a narrow range of public securities (Central Government, State Governments,and the Bombay Municipality). A valuable new source of loan money was firsttapped in 1967-66 and then 196 8- 6 9,7iz.- the nationalized Life InsuranceCorporation of India. 7hese loans have carried a 7 percent-interest rateand have been raised either for 12 years (1967-68 issues) or 15 years
(1968-69 and 1969-70 issues).
Internal loans are generated either by the investment of special
funds or the investment of sinking funds. All public loans are repayable
by sinking fund provisions. Every year, a certain proportion of theprincipal of the loan, based on appropriate periods and the interests
due, is paid to a sinking fund. Sinking funds are for the most part
invested in internal loans and not in external securities. For example,about 90 percent of the total sinking funds of Budget A are invested inEBC loans. The internal loans are in turn repayable through sinking
fund provisions which again generate more internal loans. Hence sinkingfunds are reused for new capital purposes instead of being externally
invested. The consequence of this policy is that the total amount ofloans raised externally is reduced. Repayments are in effect financedout of the general stock of loan money including new loans. The repayment
period for internal loans is 25 years; such loans carry interest at the
- 92 -
prescribed current rates for public loans. Details on the book value of
sinking funds are given in Table 22-. There are five separate sinking
funds for the Corporation, excluding the BEST undertaking. Budget B has
three funds corresponding to the three major accounts, Slum Improvement,
Slum Clearance (City), and Slum Clearance (suburbs and extended suburbs).
The aggregated amo=nt of the sinking fund was 453 million Rs. as of March 31,
1972.
In addition to the sinking fund, there are internal special funds
representing an important source for internal financing. Among them,
the Staff Provident Fund and the Pensiors Fund are notably large (see Table 23).
The greater part of*the balance of the serveral funds is either invested in
Bombay Corporation Loans or is applied in making repayable advances, at
interest, for the purchase of short life assets, e.g. plant and machinery.
These advances, which are usually made for 5 years, are repayable by
annual equal payments at the prescribed interest rate. An illustration
of loans made by the provident funds and of advances made out of special
funds is given in Table 24.
Tables 25 and to 31 present an aggregated view of the BMC borrowing
activities and borrowing by budget. As noted above, Government loans
constitute a minor part of total borrowing and are concentrated in budget B.
The major contribution bf the Government was directed to the slum clearance
(city and suburbs) programs .which were started.in the early 60's by the
Corporation. Since this program is being progressively reduced by the
Corporation and replaced by a slum improvement program, no government aid has
Table 22: Book Value of the Sinking Fundsby Budget - BMC
(Rs '000)
1 2 3 h 5 6
Budget B TotalBudget Slum Slum Total Budget E IMCA Improvement Clearance (2 + 3) Fduc. (1+h+5)
1962-63 185,192 70,355 857 71,192 5,801 262,1851963-64 218,129 68,926 1,302 70,228 9,858 298,215196h-65 803,367 68,243 4,128 72,371 11,810 287,5481965-66 223,226 68,656 2,326 70,982 16,279 310,h871966-67 228, 97 71,h21 2,912 74,333 21,824 324,7541967-68 235,246 74,986 3,753 78,739 25,061 339,061968-69 262,850 77,310 h,757 82,067 30,872 375,7891969-70 291,012 73,107 5,879 78,986 33,454 403,3521970-71 316,76h 70,368 7,074 77,462 36,988 431,2141971-72 330,450 75,632 8,333 83,965 38,575 452,990
Source: BMC Annual Accounts
Table 23: Balances of-Special Funds -RC
as of March 31, 1972(Rs)
Advances for Amount Held inPlant and Fixed DepositMachinery and Cash
1. Municipal Fire andAccident Insurance Fund 3,041,537 868,860 2,172,677
2. Net Premia And 4,567,678 2,320,29)z 2,234,886 *
3. Hospital Fund 2,014.,3864 787,919 1,226,165
4. Plant and Machinery I
Depreciation Fund 3,307,092 1,311,908 883,99h *
5. M Hospital and GS4College Fquipment Fund 180,971 32,599 148,372
6. GSM College and KMHospital Research Fund 105,731 13,002 92,729
7. Fidelity GuaranteeInsurance Fund. .476,115 - 476,115
8. Motor Vehicle (ThirdParty) Insurance Fund 1,591,534 228,860 1,362,674
9. Land (Reclamation andAcquisition) Fund 9,528,398 6,695,352 2,833,086
10. Public MonumentMaintenance Fund 131,816 - 131,816
11. Endo-nent Fund 1,337,843 - 1,337,843
Subtotal 26,283,099 12,258,794 12,900,617
12. Provident Fund 236,903,781 LOANS -
13. Gratuity Ftnd 10,905,180 - 10,905,180
14. Pension Fand 116,959,977 - 116,959,977
Subtotal 364,768,938 - 127,865,157
TOTAL 391,052,037 12,258,794 140,765,774
* The difference is accounted for by amount advanced for purchase of plant, machinery
for Municipal Printing Press pending adjustment against the provisions for
depreciation in subsequent years.
4* Difference is accounted for by amount advanced for meeting expenditure on
levelling. metaling, etc. private sheets.
Source: BMC Annual Accounts
Table 2h: Advances Made by Special Funds andSecurities Held in the Provident Fnd
1971 - 1972(Rs)
Advances from Special Funds for Purchase of Plant and Machinery
Net Premia Fund 1,17,878
Municipal Fire and Accident Insurance Fund 210,232
Advance fra K.E.M. Hospital Research Fund 10,017
Land Acquisition and Reclamatim Fund 3,330,259
Hospital Fund 335,689
KEM Hospital Equipment Fund 0
Plant and Machinery Depreciation Fund 0
Motor Vehicle Third Party Insurance Fund 0
TOTAL 5,062,075
Investments of the Provident Fundi-/
Public Securities 19,276,557
EKC Loans 1964 to 1971-71 217,627,200
TOTAL 236,903,757
1/ Actual cost at purchase rate -
Source: BMC Annual Accounts
Table 25: Borrowing Activities,, BMC .
(Rs '000)
Total Sources of Funds
Capital Total
Expenditures Borrowing Government Public Internal Advances
1961-62 63,421 1,543 22,000 38,500 1,378
1962-63 72,552 81,916 782 41,500 37,500 2,134
1963-61 83,961 78,974 1,270 42,500 33,500 1,704
1964-65 83,366 68,359 1,280 42,000 22,500 2,579
1965-66 124,701 117,690 5,492 35,000 75,000 2,198
1966-67 140,763 134,735 1,173 40,000 91,500 2,062
1967-68 180,276 159,200 673 57,095 99,500 1,932
1968-69 137,284 145,312 1,039 90,500 49,500 4,273
1969-70 102,370 145,519 180 143,598 - 1,741
1970-71 10,952 93,565 4o5 88,541 - 4,619
1971-72 124,491 108,562 99,000 4,500 5,062
1/ Budgets A, B and E
Source: BMC Annual Accounts
Table 26: Total Borrowing.Percentage Distribution of the Source of Funds
Sources 'of FundsTotal
Borrowing Government Public Internal Advan-es
1961-62 100.00 2.h3 3h.69 60.71 2.171962-63 100.00 0.95 50.66 45.78 2.611963-6h 100.00 1.61 53.82 42.42 2.16
1964-65 100.00 1.87 61.44 32.91 3.771965-66 100.00 4.67 29.74 63.73 1.871966-67 100.00 0.87 29.69 67.91 1.53
1967-68 100.00 0.h.2 35.86 62.50 1.21
1968-69 100.00 0.72 62.28 34.06 2.94
1969-70 100.00 0.12 98.68 1.20
1970-71 100.00 0.h3 94.63 '4.94
1971-72 100.00 91.19 h.15 4.66
Source: Table 25
Tablp 27. Outstanding Debt - MC
TotalPer Capita
Total Debt Net Debt Debt Net DebtOutstanding Outstanding Outstanding Outstanding
(Rs,000) (Rs,OOO) (Rs) Per Capita
1962-63 827,608 566,644 192.21 131.60
1963-64 879,517 584,171 196.98 130.83
1964-65 878,97 595,165 189.75 128.h
1965-66 952,186 641,699 198.31 133.65
1966-67 1,043,78 718,725 209.57 144.35
1967-68 1,154,89 815,543 187.33 132.32
1968-69 1,272,397 896,108 237.60 167.41
1969-70 1,375,450 971.,998 247z71 175.05
197 -71 1,415,405 984,191 26!.66 170.82
1971-72 1,461,179 1,008,189 244.73 168.86
Source: BMC Annual Accounts
Table 28: Outstandin Debt by Budget - BMC(Rs '000)
1 2 3 _4 5 6 7 8 9 10
Budget BBudget A Slum Improvement Slum Clearance (3 + 5) (4 + 6) Budget E
Total Net Total Net Total Net Total Net Total NetOutstanding Loan Outstanding Loan Outstanding Loan Outstanding Loan Outstandin'g loan
Debt Debt Debt Debt Debt Debt Debt Debt Debt Debt
1960-61 520,493 399,562 152,131 83,875 - - - - -
1961-62 559,064 409,500 153,258 84,055 17,045 - - - 27,350 -
1962-63 6o8,064 424,113 159,368 89,013 22,826 21,969 182,194 110,982 37,350 31,549
1963-6h 645,525 430,265 157,545 88,619 24,097 22,795 181,642 111,414 52,30 42,492
1964-65 635,456 436,205 151,436 83,193 28,684 24,556 180,120 107,749 63,021 51,211 1
1965-66 699,225 475,999 156,319 87,663 28,785 26,459 185,10 114,122 67,857 51,578 \0
1966-67 772,467 5h3,870 158,236 86,816 39,921 37,009 198,157 123,825 72,854 51,030
1967-68 875,521 640,275 160,602 85,616 45,555 11,802 206,17 127,418 72,911 47,850
1968-69 981,563 718,713 163,95 86,645 49,019 44,262 212,974 130,907 77,660 L6,788
1969-70 1,095,189 804,177 154,212 81,105 49,156 43,277 203,368 124,382 76,893 43,439
1970-71 1,143,405 826,640 145,302 74,915 L9,548 42,474 194,850 117,389 77,150 4o,162
1971-72 1,187,869 857,419 144,006 68,374 51,854 43,521 195,860 111,895 77,45o 38,875
Source: BYC Annual Accounts
Table 29: Borrowing Activities - Budget A - EMC(Rs,000)
Sources of Loan FundsTotal Advances
Borrowing Government Public Internal Plant & Machinery
1961-62 45,378 - 16,500 27,500 1,378
1962-63 56,134 - 39,000 15,000 2,134
1963-.64 57,704 - 27,500 28,500 1,7oh
1964-65 51,579 - 29,500 19,500 2,579
1965-66 97,198 - 35,000 60,000 2,198
1966-67 113,562 - 37,500 74,000 2,062
1967-68 146,027 - 57,095 87,000 1,932
1968-69 129,523 - 87,750 37,500 h,273
1969-70 142,589 - 140,848 - 1,741
1970-71 89,860 - 85,241 - h,619
1971-2 100,762 - 95,700 - 5,062
Source: BMC Annual Accounts
Table 30: Borrowing Activities - Budget B - BMC(Rs,000)
Source of FundsTotal
Borrowing Government Public Internal Advances
1961-62 11,543 1,543 - 10,000 -1962-63 15,782 782 - 15,000 -1963-64 6,270 1,270 - 5,000 -1964-65 4,280 1,280 - 3,000 -
1965-66 15,492 5,492 - 10,000
1966-67 16,173 1,173 - 15,000
1967-68 10,673 673 - 10,000
1968-69 11,039 1,039 - 10,000
1969-70 180 180 - -
1970-71 405 405
1971-72 2,500 - 2,500
Source: BMC Annual Accounts
Table 31: Borrowing Activities - Budget E - BMC(Rs,000)
Source of FundsTotal
Borrowing Government Public Internal Advanops
1961-62 6,500 -5,00 1,000
1962-63 10,000 -2,00 7,500
1963-64 15,000 - 15,000 -
1964-65 12,500 - 12,500
1965-66 5,000 - - 5,000 -
1966-67 5,000 - 2,500 2,500 -
01967-68 2,500 - - 2,500 -
1968-69 4,750 - 2,750 2,000 -
1969-70 2,750 - 2,750 -
1970=71 3,300 3,300-
1971-71 5,300 3,300 2,000
Source: BMC Annual Accounts
- 103 -
been received during recent years. The distribution of total borrowing
between internal and external loans indicates that the Corporation is
currently relying on external sources for nearly all of its borrowing.
There was no recourse to internal funds in 1969-70 and 1970-71, and
in 1971-72 internal funds accounted for about 4 percent of total borrowing.
This current position differs sharply from that in previous years when
internal borrowing was sometimes equal to twice the amount-.of external
finance. This change in borrowing policy seems to have resulted fran
increasing availability in external funds more than fran exhaustion in
internal funds available for borrowing.
Tables 27 and 28 give the total debt outstanding for BMC and
by budget. The total outstanding debt includes external and internal
debt. The outstanding debt per capita increased from 192 Rs. in 1962-
1963 to 245 Rs. in 1971-72. If total general revenue of the BMC may be viewed
in some sense as an indicator of the ability to repay debt, the overall 9debt
burdenT has actually declined over the 1960-1971 period. Another measure
of the debt burden was obtained by subtracting the value of the various
sinking funds (based on book value) from the total outstanding debt.
This measure may be taken as a first approximation of the external debt;
however, it overestimates the external debt since the outstanding debt
resiilting fra other internal funds have not been excl),ded from thetotal
debt outstanding. Using this measure per capita debt outstanding increased
from 132 Rs to 169 Rs over the same period.
Finally, a few points concerning the debt poligy of the BID should
be noted. First, the loan repayment policy is conservative. The average
period for both internal and external loans is about 19 years. The greater
part of the properties and assets created by application of loan funds
probably have an average physical life of 40 years or more. Second, the reuse
of sinking funds has resulted in keeping the amount of external debt to a
minimum. Moreover, it avoids the risks of depreciation, the delays and the
expenses of external investment, and the constant adjustment of sinking
funds to reflect the diffe.ence between the rate actually earned and the rate
on which the sinking fund was originally calculated. The reuse of sinking
funds in the United Kingdom has long been held to be perfectly sound and has
been almost universally adopted by municipal authorities for all loans other
than those repayable to the lender by annual installments. Indeed, it has
been taken to its logical conclusion in the form of a loans pool or consolidated
loans fund whereby sinking funds as such are abolished. All loan funds are
taken into a pool and advances made from this to the serveral borrowing
accounts. Annual repayments, based on appropriate periods, are made directly
to the pool. 1(
E. Financing of Capital Expenditures: BEST
The definition of capital expenditures used here is that adopted
by the BEST undertaking: expenditures on land and buildings, rolling stock,
plant, machinery, equipmnt tools, furniture and office equipment.
1/ See also Arthur Collins & Co., "Bombay Water Supply and Sewerage project--
Finances of the Municipal Corporation of Bombay,t Unpublished IBRD paper,
Puolic Utilities.Department, May 1, 1969.
-- 105 -
All capital expenditures are financed by loans. There is no
capital contribution by the Corporation or the State Government. There
was one exception, however. In 1966, the Corporation did make a temporary
advance of 10 million Rs. to the BEST. It is of interest- to note that
this absence of aid is being strongly challenged by the Undertaking. In
the 1973-74 Budget Estimates, the General Manager notes that Tthe Isocial
cost' in maintaining such facilities could be met by the Corporation/State
Government by way of suitable subsidy."1
BEST capital expenditures may be financed by public loans (external
borrowing) and funds generated by the operation of the Undertaking, which
will be called internal borrowing. The amount of external finance available
each year to the BEST is determined concurrently with the BMC, which places
the enterprise in a competitor's position vis-a-vis the rest of the Corporation's
departments. The maturity period of these loans is usually 12 years and they
have been raised since 1964 at 6 percent interest.
The funds available for internal borrowings are internal funds and
surpluses on the current accounts (X) defined as:
X= (Income) - (Operating Expenditures) - (Overhead Charges) -(Statutory Contribations) - (Other Contributinns).
Income is the receipts from current operations and rents and sales of
properties. Statutory contributions , by decreasing order of priority,
are: statutory contributions to the Municipal Fund, and to three special
funds - The Revenue Reserve Fund, the BEST Betterment Fund, and the Welfare
Fund. (The details concerning the disposal of suplus balance to these special
funds were discussed above). It is sufficient to note here that the BEST is
- 1o6 -
required to contribute a fixed annual amount of 4 million Rs. to the Municipal
Fund. Such a contribution has been recently challenged by the BEST and the
Corporation has already agreed to abandon this requirement, subject to the
State Government approval. Other contributions are payment to a financial
reserve (since 1969) and contribution to various special funds created on
a voluntary basis by the BEST under section 460 II1 of the BE Act.
The current surplus can also be expressed in the following way:
X = (Depreciation Allowances) + (ebt Charges) + (Interest on
-Internal Funds) + (Profits)
The two branches of the BEST must contribute each year to a
Depreciation Fund on the basis of their respective assets. Part of this
fund is used to write off depreciated assets and part for internal fund
borrowing. Similarly, each branch is subject to debt charges which include
the annual repayment of the public loan principal and the interest. The use
of debt charges as a source of internal borrowing through the operation
of a sinking fund is similar to that described above for the Corporation.
The BEST operates a sinking fund separate from that of the rest of the Corporation.
In general, all public loans are repayable by sinking funds P ?ovisions. For the
greater part, the monies in the sinking funds are invested in internal loans
and not in external securities. Such internal loans are in turn repayable
through sinking fund provisions, which again generate more internal loans.
About 10 percent of the sinking funds were invested in public securities
as of March 1972. Interest - on funds borrowed from the sinking fund are
recorded in the budget head "Interests on Internal Funds."
Profits are defined as a residual.,
Profit X - (Depreciation Alloaances) - (Debt Charges) -
(Interests on Internal Funds)
- 107 -
"Advances frcm special funds" are composed- of internal funds created and
operated by the BEST. A list of these funds may be found in Table 32.
Their resources consist of contributions from the revenue budget by the
BEST as well as own resources including interests received on funds invested
internally and externally. These funds are earmarked, but the BEST can use
excess balances whenever available.
In practice, the sources of internal borrowing are determined
according to the method described above with one exception, concerning
contributions for various funds. These contributions are made on an ad hoc
basis whenever sufficient current funds are generated, and not necessarily
on the basis of the order of priority set in the'Act. The BEST carries formzd
important arrears regarding the contribution t.d the Municipal Fund, while
payment to other special funds are still currently made.
The importance of public loans in BEST financing has increased
recently. The recourse to internal funds is now more restrictLd since special
funds do not generate sufficient balances annually. The result is that the
BEST relies mainly on internal funds accumulated during the current financial
year (debt charges and depreciation allowances). On the average, the BEST
raises 20 million Rs. internally every year. The level of long term (public)
borrowing since 1965, as shown in the balance sheets of the BEST, shows that
the absolute level increased by about 66 percent from 1965 to 1972. The
accumulated sinking funds increased byahout 56 percent, Rs 71 to 112 million.
This trend is expected to continue in a near future. The budget
Estimates for 1973-74 propose to raise a Public Loan of an unprecedented amount
of 80 million Rs. to meet the capital expenditures of 88.5 million Rs. envisaged
- 108 -
Table 32 . Internal Funds Advances (000s Rs)
Funds 1965-66 1966-67 1967-68
Fire & Riots Insurance 1,500 1,000 -----
Third Party Insurance 1,000 1.,500
Renewals ----- ---- ------
Depreciation 10,06 12,003 3,969
Provisions for Special Provident Fund 3,500 2000Contribution on Termination ofService (Gratuities Accruing Fund)
Provision for Furlough & Leave Pay to 1,400 1,500 ----
Staff and Passage to Officers Accruedand Accruing
Electric Supply Contingencies Reserve 527 1,369
TOTAL 18,433" 19,372 3,969
Source: BMC Annual Accounts
-109-
in the current loans works budget. Loans of this magnitude have never been
raised before. Such a policy may be difficult to implement in the long
run because of the reluctance of the State Government and Reserve Bank to
approve loans of such magnitude for the BEST.
V. REVENUE STRUCTURE AND TRENDS
A. Revenue Authority
The Corporation is entitled to'levy-four kinds of taxes: property
taxes, tax on vehicles and animals, theater tax, and octroi tax. The levy-
of any new tax requires approval by the State Government. Tax rates are
determined by the Standing Comm=ittee (which is the main finance camittee
of the Corporation) subject to the restrictions statutorily determined in the
BMC Act. As a general rule, the Corporation is allowed to fix tax rates within
a range stated in the Act. The Municipal Commissioner initiates changes in
tax rates and in the tax structure.
1. Property Tax Powers
There is no sailing for the water rate levied on rateable value, i.e.
the Standing Committee can determine the rate freely. The Halalkhore (sewerage)
tax cannot exceed 5 percent of the rateable value. The minimum and
maxnum rates of the general property tax are 8 percent and 26 percent
respectively-of the rateable value, these rates excluding a fire tax
rate which can be fixed between one-eigth and three-fourths percent of the
rateable value. An education cess not exceeding 5 percent of the rateable
value may be levied with the approval of the State Government.
2. Tax on Vehicles and Animals
Taxes are levied on animals and vehicles on the basis of weight
according to a complicated rate schedule as shown in Table 32a. There is
also a tax of a maximum of Rs. 5 per annum on dogs of at least 6 months
of age.
1/ Property taxation is dicussed in further detail in the next chapter.
Table 32a: TAx ONVEHICIES An ANIAIB /
m^gixiUM amount oftix per quater.
Seria - Dscaripriän ovehicle or anmml. Fo,r vhicles For vehielofo. with phu. without
latio tyre. pt4muzratie- tyrea.
. Rae. Rs.
1 Vohialnsimpelled bv machieryatnd uedforcommercial purroesot-her:hanu the carringo of p
Weiehiug up Lo 2 tund empty ... ... 45 05Do. 4 du. ... ... 5 30Do. 8 do. ... ... 65 95Do. 12 do. ... ... 75 110
Over 12 do. ... ... 85 125
2 Ea"hvehiclödr.wu or intendeidtobedrawby any vehicem fallingundor berial No. I and uhed for comzmrcial purpose(L..nilers)-.Weiging up to 2 tons empty. ... ... 30 45
Do. 4 do. ... . 40 60Do. 8 do. ... ... ^6 75Do. 12 do. ... ... 60 90
Over 12 da. ... l... 1003 Råch vehicie impelled by machinery aud uced d*.2y for crrying
WCighing up to 13 ewt.c=pty ... . 5 40Do. 30 do. ... .. 35 50Do. 45 lo. ... ... 50 75Over 4J do. ... ... . 5
4 Vehicle dirswn or intenried! to Lodrzwn by anyvchicle fallingunderSeria Xo. 3(i.. tr.aler) ... ... ... 12 20
5 Each three.wiheeledvehicleinpelled.by ma.chinery and umed quoy.for carrying pasangrru ... ... ... 15 25
6 Each two.wheeed vehicle imzpelled by maichinery ... ... 12 20
7 Fach four-whekeled vehico drawn by horsen, ponien, mules,doakeys or bullock.-
(a) Labvurcarts ,.. ... ... 2 8
(6) OthoerTehiclein thila .. ... ... 8 12
B Each two.whceled vehicle drawn by horses, ponics, mulcs,donkeys, or buljechs-(a) Labour carts ... ... ... 8(6) OthCvchiclesin thisass ... ... ... 4
9 Each vohicie drawn or hmpUcd otherwiec than by borsec, ponies,mule, donkwys, bullock" or uachinery
10 E.ah hore, pony orimulof al h<iciht,'f 12 hands or upwarda ... Ra. 811 Each hotc,n ofa al t ha 1ad ... ,, 4 .12 buek er L ... ,, 213 d for d.u-ht or p.k purps:: or to.iing ... ,. 2
Source: Schedule G of BMC Act
-112-.
3. Theater Tax
This tax is levied on cinemas, theaters, circuses, carnivals, and
other performances or shows. The maximum rates are shown below (see Table 33).
Table 33: TEATER TAX
Type of Emtertainment Ma3d.mm Amount- of Tax
Class I Cinema Theater Rs 10 per show
Class II Cinema Theater Rs 7 per show
Drana, concert, variety..entertainment Rs 7 per show
or tamashaCircus, carnival, or fete Rs 10 per da
Any other entertainaent Rs 7 per show orif there are not
separate shows,Rs 7 per day
Class I Cinema Theater means a theater which usually presents first-
r= movies and Class II Cinema. Theater means awy other cinems theater.
Source: BI Act
b. Octroi
There is a tax levied on commodities imported into the corporate area.
The number of articles liable to the payment of this tax and octroi rates
are determined by law. Nevertheless, the Commissioner frames rules
with respect to the levy, assessment and collection of octroi subject
to the approval of the Standing Committee. He may regulate: (a) the
'amination of articles liable to payment of octroi; (b) t'de inspection, -
weighing, or examination of the contents of any package for the purpose of
ascertaining whether it contains any articles in respect of which octroi
is payabl6, (c) the seizure and confiscation of articles liable to cctroi
in case of refusal to pay such tax; (d) measures to prevent tax evasion;
and (e) any other matter which is to b.a, or may be, prescribed for the levy,
assessment, or collection of octroi. All these rules must be first
sanctioned by the State Government.
S-113-
B. Trends in Revenue Growth
The BMC relies heavily on tax revenues and user charge financing
and very little on external assistance. The structure of revenues for
consolidated local governments, i.e. the Municipal Corporation including
the BEST, is shown in Table 34. While the total self-raised revenues
increased by more than three times over the 1960-72 period, the amount of
external aid increased by less than 70 percent. Among self-raised revenues
property taxes (rates) are by far the largest source of income (Table 35),.
but over the period under consideration have decreased by nearly 10 percent
of total tax receipts. The share of tax revenues has risen from 38 to 49
percent even though the water tax on property value has been steadi-ly replaced
by metered charges on water consumption.
The revenue structure of the Municipal Corporation may also be viewed
after excluding the revenues raised by the BEST since this Undertaking is run
independently from the rest of the municipal services. Also, as a result
of its impomtance relative to other accounts, its inclusion drastically
increases the share-of user charges. In other words, it may be of interest
to look at the sources of financing placed under one camon management and
at the relative importance of general revenues. Table 36 shows the revenue
structure of the BMC when the BEST accounts are excluded from 1960 to 1972-73. In
this case tax revenue-s are 0y far the largest source, providing about 73 percent of
all.self-raised. revenues in 1972 as compared ta11 percent for rates and other
sources of revenues which are quite negli'ible. All municipal taxes with
the exception of minor components of the property taxes are general revenues.
Table 34: REVJE STRUCTURE AM TREMDS IN REVENUES -EMC
1960 - 1972 -14-
(In thousand rupees)hf
1960-61 1961-62 1962-63 1963-6h 196h-q 1965-66 1966-67 1967-8 1968-69 1269-g 1970-71 171-72 1972-73
Tax Revenues 116,006 126,992 141,120 154,759 164,039 225,592 281,828 284,289 318,773 309,058 31,802 444,635 539,545Revenues from
Rates 149,L68 155,753 181,387 207,677 219,700 229,086 243,035 268,919 296,59 328,821 376,753 385,050 430,150
Revenues franLicenses 2,566 2,879 3,656 3,885 7,252 9,089 8,365 8,970 8;722 - 9,78 10,32 il,163 11,215
Revenues franFees 9,033 8,207 8,93 9,705 10,149 12,838 13,534 13,737 16,791 15,408 16,897 17,804 26,233
Revenues franRents 9,452 9,644 9,927 10,476 11,371 13,970 14,861 11,2192 10,037 12,974 13,281 28,156 21,977
Pevenues franInterests 5,389 6,261 6,668 8,53 8,132 8,300 12,302 13,817 9,481 13,856 14,889 30,505 22,492
iscellaneous 14,529 22,653 22,445 21,809 18,910 19,640 22,974 28,664 57,71 36,171 37,652 29,582 ' 41,442
TOTALLocal Revenues 306,43 332,389 374,1L6 416,854 439,953 518,515 596,899 629,688 717,73 766,036 861,598 96,895 1,093,05
Grants 7,449 8,272 9,672 8,707 14,313 7,661 9,893 11,632 11,80 12,035 11,486 11,036 12,368
TOTAL REVNUES 313,892 340,661 383,818 425,561 454,266 526,176 606,(92 641,320 729,214 778,071 873,085 957,931 1,105,22
Tota3. Local 306,413 313,574 334,058 350,297 349,169 389,861 417,411 398,537 432,470 442,795 478,666 503,668 552,0 8Revenues atConstant Prices
Total Revenues 313,892 321,378 342,694 357,614 360,529 395,621 424,330 405,899 434,286 449,752 485,047 509,538 558,29at ConstantPrices
Annual average rate of increase 1960 - 1972
Total local revenues at current prices: 11 .2%Total revenues at current prices: -11.1%Total local revenues at constant prices: 5.0%Total revenues at constant prices: 4.9%
1/ Budget estimates. Source: BMD Annual Accounts
Table 35. LOCAL REVENUE STRUCTURE AND TRENOS IN LOCAL REVENUES FERCENTAGE DISTRIBUTION - IWC 1/2(1960 - 1971)
1960-61 1961-62 1962-63 1963-64 1964-65 1965-66 1966-67 1967-68 1968-69 1299-70 1970-71 1971-72 1972-73T:x Revenues 37.86 38.21 37.72 37.13 37.38 43.51 47.22 45.15 44.41 45.57 45.47 66.96 49.36Revenues from Rates 48.78 46.86 48.118 49.82 49.94 44.18 110.72 42.71 41.30 42.73 43.73 40.66 39.35Revenues from Licenses 0.84 0.87 0.98 0.93 1.65 1.75 1.40 1.42 1.22 1.27 1.20 1.18 1.03
Revenues from Fees 2.95 2.47 2.39 2.33 2.31. 2.48 2.27 2.18 2.34 2.01 1.96 1.88 2.40
Revenues from Rents 3.08 2.90 2.65 2.51 2.58 2.69 2.49 1.79 1,140 1.69 1.54 2.97 2.01
Revenues from Interest 1.76 1.88 1.78 2.05 1.85 1.60 2.06 2.19 1.32 1.81 1.73 3.22 2.06
Others 4.74 6.82 6.00 5.23 4.30 . 3.79 3.85 4.55, 8.01 4.72 4.37 3.12 3.79
Total Local Revenues 100.00 100.00 100.00 0 100 0 00 100 100.00 100.00 100.00 100.00
1/ Based or Table V-1.
ot~~~~~~ e
ieur10.0100Fures nmay not add up to 100.%0 due to rourding errärs. Soo'e Table 34
! gie mu no ade up to 100
ico« 1 10oo oo ,0o 100*0 10 looC,0 00'
Table 36: REVEY4UE STRUCTURE AND TRENDS IN REVENUES WHEN BEST ACCOUNTS ARE EXCLUDED
(1960 - 1972)
(In thousand rupees)1/
104 1961-2 192-(,3 19A3-Ah 1964-65 1265-M 1966-67 1967-6 8 1969-7 1970-71 1971-72 1 -3
Tax RevenuesProperty Taxes 92,558 108,818 1114,303 126,977 133,287 140,970 157,030 166,886 196,1143 201,202 215,6514 237,092 299,966
Octroi 12,323 13,39 14,A69 13,710 15,34 66,950 105,761 95,575 100,46 1214,028 150,198 178,610 203,205
Wheel Tax 6,1,56 - 5,57 6,615 7,810 9,061 9,217 9,110 9,719 10,809 10,620 11,808 12,419 20,130
Other Taxes i4,669 4,278 5,733 6,261 6,659 8,654 10,176 10,109 11,375 13,208 13,8h2 16,314 16,244
, TOTAL TAXREVENUES 116,006 126,992 141,120 1514,759 1614,1439 225,592 281,828 2814,289 318,773 349,058 391,802 4 14,63 539,545
Revenue.from 33,747 36,629 46,931 52,370 50,545 5b,484 53,637 55,2214 57,631 60,853 75,207 66,558 79,848
Rjates2/
Revenues from 2,566 2,879- 3,656 3,885 7,252 9,089 8,365 8,970 8,722 9,798 10,324 11,163 11,215
Licenses
Revenues from 9,033 8,207 8,943 9,705 10,149 12,838 13,534 13,737 16,791 15,408 16,897 17,804 26,233
Fees
Revenues fra 8,982 9,096 9,317 9,7142 10,498 13,087 13,727 13,558 15,113 16,678 17,3814 19,532 18,850
Rents
Revenues £'an ,397 5,1166 5,429 7,377 7,187 7,666 8,960 9,823 8,435 11,248 11,495 26,270 19,992
Interests
Miscellaneous 9,827 13,620 16,201 14,011 15,321, 10,789 13,826 1L,318 141,156 214,590 24,375 25,012 33,698
TOTAL
Local Revenues 184,558 202,569 231,593 251,849 265,391 1333,323 393,877 399,919 466,621 1487,584 5147,4814 610,974 729,381.
Grants 7,4149 8,972 9,672 8,707 14,313 7,661 9,893 11,632 11,480 12,035 11,1486 11,036 12,368
TOTAL REVENUES 192,00? 210,8141 2'e1,265 260,556 279,7014 3140,9814 1403,770 1411,511 1478,101 1499,619 5568,970 622,101 741,7149
Total Local 18L,558 191,103 206,780 211,638 210,628 250,619 295,439 253,113 281,097 281,8141 3014,158 32h,986 368,371
Revenues ai,Constant Prices
Total Revenues 192,007 19P,907 215,1415 218,955 221,987 256,379 282,357 260,1475 288,013 288,797 310,539 330,856 376,621
at. ConstantPrices
Average annual rate of growth 1960 - 1972
Total local revenues at curren' prices: 12.1%
Total revenues at current prices: 11.9%
Total local revenues at constant prices: 5.9%Total revenues at constant prices: 5.B%
, /Budget estimates Source: B1O Annual Accounts *
2/ Water rates
, . , hV
Table 37: LOCAL REVENUE STRUCTURE Å.ND TRENDS IN LOCAL REVEUES WHEN BEST'S ACCOUNTS ARE EXOLuDED(Percentage Distribution - IM)
(1960-1973)
1960-61 1961-62 1962-63 1963-64 1964-65 1965-66 1966-67 1967-68 1968-69 1969-70 1970-71 1971-72 1972-73
Tax Revenues
-- Property Taxep 50.15 51.25 149.36, 50.42 50.22 42.29 39.87 41.73 42.03 141.27 39.39 38.81 41.13
-- Octroi 6.68 6.63 6.25 5.44 5.82 20.09 26.85 23.90 21.53 25.44 27.49 29.27 27.86
-- iheel Tax 3.50 2.69 2.86 3.10 3.41 2.77 2.31 2.143 2,,32 2.18 2.16 2.03 2.76
.- Other Taxes 2.53 2.11 2.143 2.49 2.51 2.54 2.58 2.53 2.44 2.71 2.53 2.67 2.23
Total Tax Revenues 62.86 62.69 60.93 61.45 61.96 67.68 71.55 71.09 68.32 71.59 71.56 72.77 73.97
Revenueýs from Rates 18.29 18.08 20.26 20.79' 19.05 16.35 13.62 13.81 12.35 12.48 14.74 10.89 10.95
Revenues from Licenses 1.39 1.142 158 1.54 2.73 2.75 2.12 2.24 1.87 2.00 1.89 3.83 1.54
Revenues from Fees 4.89 4.05 3.86 3.85 3.82 3.85 3.44 3.43 3.60 3.16 3.09 2.91 3.60
Revenues from Rents 4.87 4.49 4.02 3.87 3.96 3.93 3.49 3.39 3.24 3.42 3.18 3.20 2.58
Rever.ues from Interest 2.38 2.54 2.34 2.93 2.71 2.23 2.27 2.46 1.81 2.31 210 4.30 2.74
Others 5.32 6.72 7.00 5.56 5.77 3.24 3.51 3.58 8.82 5.04 4.45 4.01 4.62
Total Local Revenues 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Source: Tablo 36
lr
- 118 -
Tables 38 and 39 give the municipal revenues on a per capita basis,
with and without the inclu.ion of the BEST accounts respectively. Total
municipal revenues increased at an annual compounded rate of 7.1 percent and
tax revenues at 9.6 percent per year from 1960-1973. When adjusted for
price increases, the annual rate of increase of local revenues per capita
is relatively low.
The revenue tables show that the tax system of the Municipal Corporation is
based on two major taxes: the property taxes and octroi duties, which accounted for
between 90 and 93 percent of total tax revenues over the period 1960-1972. Until
1965-66, the property taxes had heavily daninated the tax system with
a relatiIe share of total tax revenues usually above 80 percent (Tables 40 and_hl).
Since then, the relative share held by the receipts from octroi duties has
been increasing from 7 percent in 1960/61 to nearly 30 percent in 1971-72,
while the property tax share has decreased. As a result of these changes,
the present tax system shows a somewhat more balanced picture based on these
two taxes. All other local taxes together account for only about 7 percent of
tax receipts. While per capita tax revenues grew at a rate of 9.7 percent
over the same period, the price level increased by 5.9 percent. Thus real per
capita tax revenues grew at a rate of 3.8 percent over the period (Table 42).
Table 38i MUNICIPAL REVEIS PER CAPITA - BMC(1960 - 1972)
(In rupees)
Est.i/1950-61 961-62 1962-63 163-6h 196h-65 W 66 1966-67 1967-68 1968l6- 1969-70 1970-71 19 71-72 1972-7
Tax Revenues 29.01 30.59 32.78 31.66 35.51 h6.95 56.60 55.06 59. 53 62.86 68.00 74.47 87.114
Revenues fromRates 37.38 37.51 142.13 1#6.51 47.45 47.71 h8.81 52.08 55.37 59.22 65.39 64.49 69.47
Revenues frcmaLicenses 0.64 0.69 0.85 0.87 1.57 1.89 1.68 1.74 1.63 1.76 1.79 1.87 1.81
Revenues fromFees 2.26 1.98 2.07 2.17 2.19 2.67 2.72 2.66 3.14 2.77 2.93 2.98 4.24-
Revenues fromRents - 2.36 2.32 2.31 2.35 2.14 2.91 2.98 2.19 1.87 2.34 2.31 4.72 3.55
Revenues fromInterests 1.35 1.51 1.55 1.91 1.76 1.73 2.47 2.68 1.77 2.50 2.58 5.11 3.63
Others 3.63 5.146 5.21 4.88 4.08 h.09 4.61 5.55 10.73 6.51 6.54 4.28 6.69
TOTALLocal Revenues 76.6h 80.05 86.90 93.36 95.02 107.99 119.88 121.95 134.oA 137.96 19.5h 158.59 176.54
Grants 1.86 1.99 2.25 1.95 3.09 ' 1.60 1.99 2.25 2.14 2.17 1.99 1.85 2.00
TOTAL REVEIES 78.50 82.05 89.1h 95.31 98.11 109.59 121.87 121s.21 136.19 140.13 151.54 160.1sh 178.54
Total Local 76.64 75.52 77.59 78.45 75.1 81.21 83.83 77.18 80.75 79.75 83.08 84.36 89.16Revenue perCapita atConstant Prices
Total Revenues 78.50 77.41 79.59 80.18 77.87 82.40 85.2 78.61 82.04 81.00 84.19 85.34 90.17per Capita atConstant Prices
Average annual rates of increase 1960 - 1972
Total local revenues per capita at current prices: 7.2%Total local revenues per capita at constant prices: 1.3%Total revenues per capita at current prices: :7.1%Total revenues per capita At constant prices: 1.2%
1/ Budget Estimates Sources Table 3h
hV
Table 39: MUNICIPAL REVENUES PER CAPITA V'HEN BESTACCOUNTS ARE E(GLUDED
(1960 - 1972)(In rupees)
1960-61 1961-62 1962-63 1963-611 196h-65 1965-66 1966-67 1967-68 196-691 969-70 1970-.71 1971-72 1972-73
Tax RevenuesProperty Taxes 23.15 25.00 2A.55 28.1th 28.79 29.34 31.5h 32.32 36.63 36.24 37.43 39.71 48.44
Octroi 3.08 3.24 3.36 3.07 3.33 13.93 21.214 18.51 18.76 22.34 26.12 29.95 32.82
Wheel Tax 1.61 1.31 1.54 175 1.96 1.92 1.83 1.88 2.02 1.91 2.05 2.08 3.25
outer Taxes 1.17 1.03 1.33 1.40 1."6 1.76 2.04 1.96 2.12 2.38 2.40 2.73 2.62
[TOTAL TAI I
REVENUES 29.01 30.59 32.78 34.66 35.51 h6.95 56.60 55.C6 -9.53 62.86 68.00 74.47 87.14
Revenues from 8.44 8.82 10.90 11.73 10.92 11.3h 10.77 10.70 10.76 10.96 13.05 11.15 12.89
Rites
Revenues fran 0.64 0.69 0.85 0.87 1.57 1.89 1.68 1.74 1.63 1.76 1.79 1.87 1.81
Licenses
Revenues from 2.26 1.98 2,08 2.17 2.,19 2.67 2.72 2.66 3.14 2.77 2.93 2.98 4.2
Fees
Revenues fran 2.25 2.19 2.16 2.18 2.27 2.72 2.76 2.63 2.82 3.00 3.02 3.27 3.01
1Rents
Revenues from 1.10 1.24 1.26 1.65 1.55 1. 1.55 1.80 1.90 1.58 2.03 2.00 4.40 3.23
Inturests
-Others 2.46 3.28 3.76 3.11 3.31 2.25 2.78 2.77 7.69 4.43 4.23 4.19 5.44
TOTALLOCAL REVEUES L6.16 h8.79 53.79 56.41 57.32 69.38 79.10 77.5 87.15 87.81 95.02 102.33 117.80
Grants 1.86 1.99 2.25 1.95 3.09 1.60 1.93 2.25 2.114 2.17. 1.99 1.85 1.99
TOTAL REVENUES h8.02 50.78 56.03 58.36 60.41 71.02 81.09 79.71 89.29 89.98 97.02 104.18 119.80
Local Revenues at
Constant Prices 16.16 46.03 18.03 47.140 h5.49 52.17 55.31 49.02 52.50 50.76 52.79 54.43 59-49
Total Revenues atConstant Prices 18.02 47.91 50.03 9.04 47.94 53.40 56.71 50.45 53.79 52.01 53.90 55.141 60.5
Average annual rate of increase 1960 - 1972 0
Local revenues at current prices: 8.1%Total revenues at current prices: 7.9% Source: Table 36
Loca3 revenues at constant prices: 2.2%
Total revenues at constant prices: 2.0%
#C
Table ho: Tax Bevenues - B4C - 1960-1972CRa '00)
9 60-61 1961-62 1962-63 193-64 1964-65 195-66 1966-67 197-68 1968-69 1969-70 1970-71 1971-72 1972-7
Property Taxes 92,558 103,818 114,303 126,977 133,287 140,970 157,030 166,886 196,143 201,202 215,654 237,092 299,966General tax . 66,656 68,490 72,850 90,532 97,374 104,039 117,992 126,048 118,918 151,267 164,435 180,854,, 224,262Fire Tax 2,498 2,658 2,775 2,970 3,173 3,1438 3,863 11,075 4,907 4,907 5,310 5,926 6,600Water Tax 6,886 7,119 7,090 7,052 7,391 7,892 8,148 8,687 8,685 8,929 9,038 ' 9,060 15,000Halalkhore Tax 11,532 11,5514 11,606 12,978 13,813 15,201 16,441 18,087 19,240 20,881 23,531 25,149 35,000EducatIon Cess . 4,672 4,707 5,672 8,537 8,855 9,823 10,337 9,445 14,250 15,128 14,306 16,070 19,030heceipts from Gov't. on accountof Urban Immovable•Property Tax 314 9,290 14,400 4,909 2,680 577 250 497 143 90 34 33 74
Octroi 12,323?j 1 3 , 43 92J 14,469j 13,71 0 15,434! 66,950 1p5,761 97,575 100,446 124,028 150,498 178,810 203,205Theater Tax 867 934 940 964 971 1,014 1,041k 1,038 1,073 1,154 1,274 1,310 1,355
Tax on Dogs 55 58 55 57 67. 71 72 70 73 75 76 79 114wheel Tax 6,456 5,457 6,615 7,810 9,061 9,217 9,110 9,719 10,809 10,620 11,808 12 4 19 20,130
3/Others- 3,747 3,286 4,738 5,2o40 5,621 7,369 9,060 9,001 10,229 11,979 12,492 14,925 1,775
TOTAL 116,006 126,992 141,120 154,759 164439 225,592 281,828 284,289 318,773 349,058 391,802 4U4,635 539,5145
1/ Eu:dget estimates.2/ Tow,n duties.3/ Water tax capourded rate and halalkhore special service.
Source: BIE Annual Accounts
be
Table hl: TAX REVENUES AND TREND IN TAX REVMWES - PERGE1TA0E DISTRIBUTION -B
1960 - 1972
1960-61 1961-62 1962-63 1963-64 1964-65 1965-66 1966-67 1967-68 1968-69 1969-70 1970-71 1971-72 1972-73
Property taxes 79.79 81.75 81.00 82.05 81.06 62.49 55.72 58.70 61.53 57.64 55.04 53.32 55.59
General tax 57.46 53.93 51.62 58.50 59.22 46.12 41.87 44.34 46.71 43.33 41.96 40.67 41.56
ire tax 2.15 2.09 1.97 1.32 1.93 1.52 1.37 1.43 1.53 1.40 1.35 1.33 1.22
Water tax (rateable value) 5.94 5.61 4.96 4.46 14.49 3.50 2.89 3.06 2.72 2.55 2.30 2.03 1.78
fltaikhore tax 9.94 9.10 8.22 8.39 8.40 6.74 5.83 6.36 6.03 5.98 6.00 5.65 6.48
Education Cess 4.03 3.71 4.02 5.52 5.38 4.35 3.67 3.32 4.47 4.33 3.65 3.61 3.52
Receipts from Gov't. on account
of urban immoveable property tax 0.27 7.32 10.20 3.17 1.63 0.26 0.09 0.17 0.04 0.02 0.0 0.00 0.01
Octroi 10.62 10.58 10.25 8.86 9.39 29.68 37.53 34.32 31.51 35.53 38.41 . 40.21 37.66
Theater tax 0.75 0.74 0.67 0.62 0.59 0.45 0.37 0.37 0.33 0.33 0.32 0.29 0.25
T22 ou dogs 0.05 0.05 0.04 0.04 0.03 0.03 0.02 0.02 0.02 0.01 0.01 0.02
lqh.eel tax 5.57 4.30 4.69 5.05 5.51 4.09 3.23 3.42 3.39 3.04 3.01 2.79 3.73
IÖrhers 3.23 2.59 3.35 3.39 3.42 3.27 3.21 3.17 3.20 3.43 3.18 3.35 2.72
Total Tax Revenues 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
1/ Based on Table V-7.
2 0.00 = less than 0.01.
Source: Table hO
1~1
Table 42: TAX REVENUS PEIR APITA - *10(1960 - 1972)
(In rupees)
1960-6i 1:,61-62 1962-63 1963-64 1964-65 1965-66 1966-6' 1967-68 l968-69 i969-7o 1970-71 171-72 972-73
Propercy Taxes 23.15 25.00 26.54 28.43 28.79 29.36 31.54 32.32 36.63 36.24 37.43 39.71 48.44
General tax 16.67 16.50 16.92 20.28 21.03 21.67 23.70 214.41 27.81 27.24 "28.37 30.29 36.22
Fire tax 0.62 0.64 0.64 0.67 0.69 0.72 0.78 0.79 0.92 0.88 0.92 0.99 1.07
Water tax (on rateab1e value) 1.72 1.71 1.63 1.58 1.60 1.64 1.64 1.68 1.62 1.61 1.57 1.52 2.42
ianhdmore tax 2.88 2.78 2.70 2.91 2.98 3.17 3.30 3.50 3.59 3.70 4.M8 4.21 5.65
du,caticn cesa 1.17 1.13 1.32 1.91 1.91 2.05 2.08 1.83 2.66 2.72 2.48 2.69 3.07
Receipts from Gov' t. on accountof urban imoveable property tax 0.08 2.24 3.34 1.10 0.58 0.12 0.05 0.10 0.03 0.02 0.01 0.01 0.01
Octroi 3,08 3.24 3.36 3.07 3.33 13.94 21.24 18.90 18.75 22.33 26.12 29.94 32.82
heater tax 0.22 0.22 0.22 0.22 0.22 0.21 0.21 0.21 0.20 0.21 0.22 0.22 0.22
Tax or. dog. 0.01 ,0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 0.01 M02
Wheel tax 1.61 1.31 1.54 1.75 1.96 1.92 1.83 1.88 2.02 1.91 2.05 2.08 3.25
Cthers 0.94 0.79 1.10 1.17 1.21 1.53 1.82 1.714 1.91 2.16 2.17 2.50 2.39
Total tax revenues 29.01 30.59 32.78 34.66 35.51 46.98 56.60 55.06 59.62 63.02 68.47 74.81 87.63
Tax revenues per capita at 29.01 28.86 29.27 29.13 28.18 35.32 39.58 34.e5 35.92 36.43 38.04 39.79 44.26constant prices
Average annual rate of increase 1960 - 1972
Tax revenue per capita at current pricing: 9.7% Source: Table 34Tax revenues per capita at constant pricing: 3.6%
1/ Budget estimates.
et
-124-
VI.. PROPERTY TAXES
A. Introduction
Property taxes in Greater Bombay are of three kinds: (1) a tax
on improved properties and on lands which are vacant but capable- of being
built upn; (2) taxes on unearned increment in connection with town
improvement (betterment) schemes, and (3) a stamp duty on transfer of
property. The first two categories are of concern here since they
are levied by the Municipal Corporation, while the stamp duty is a State
Government tax. The .tax levied in connection with town planning schemes
is dealt with separately below.
Property taxes include both general taxes and service taxes. There
is one general rate with a minor cemponeinA of service tax (fire tax) and three
service taxes: Halalkhore tax, water charge, arnd education cess. The Goverment
has introduced in this past decade a number of surcharges to the municipal
rates for education and housing purposes. There are, in chronological order,
the State Education Cess (1962), the Building Repair Cess (1969), and the
Additional State Education Cess (1971). These taxes are collected along with,
and assessed on the same basis,as the general tax.
B. Property Tax Base
The base of the property tax in Bombay is the "net rateable value",
which is defined as the annual rent (gross rental value) for which a
property might be reasoTa Y_ expected to let from year to year less a
1/ The first category of taxes is levied by all municipal councils, municipal
corporations and Village Panchayats in the State of Maharashtra. The
second category is levied only by those local authorities which undertake
improvement schemes. A fourth category is a cess on lands which-is
usually assessed on land revenue and is levied by Zilla Paris1rads and
Village Panchayats.
125
10% statutory deduction and all "tenants" property taxes.I Gross rents to
be adopted for assesmnent purposes should be an hypothetical rent which
hypothetical tenant would be willing to pa and a rent which is pa7able fran
year to year. More specifically, net rateable value is canputed in the
following manmer:
NRV .9RV- T
where NRV = net rateable value
RV = annual gross rental value
T = tenant's taxes
Property as defined here includes land and buildings. The term
"building" refers to any.type of structure--house, outhouse, stable, shed,
and hut-built of any material--whether of masonry, bricks, wood, mud, metal,
or others. In practice, however, temporary structures with a life
of less than six months, such as sheds and shelters
constructed while building work is in progress, are not assessed.
The term "land" includes land which is being built upon or covered with
water, benefits to arise out of land, things attached to the earth and rights
vested by legislative enactment over any street. Land which is vacant or
stored up with material dr is.being built upon is treated as land for
assessnent purposes.
1/ Section 154 of the BD Act.
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The .concept of "gross rental value" which is adopted for
assessment purposes requires explanation when applied to buildings.
The part of rentals which.is. concerned .ith- buildings refers .
to the value of the bare building and to the value contributed to the
building by the presence of facilities conon to all tenants. For exanple,
gross rents here include the part of the rentals accounted for -by lights
in the passage, staircases, privies and washing places. Deductions are
made from actual gross rentals when the rents charged by the landlords
include charges for facilities which are provided to the tenants on an
individual basis. When a property is let with furniture, a deduction to
the extent of 10% of the cost of furniture is allowed from the total rent,
When rents include charges cfor electric lights and deduction
is claimed on that account, a deduction on the basis of the average for
the whole year is allowed if bills for the whole year are produced; otherwise,
the deduction is allowed at the rate of Rs 1.4 per light. The value of
machinery is excluded fra the rateable value of industrial properties
according to section 154(2) of the BM Act. However, this section has been
interpreted to mean that the value of machinery cannot be included in the
gross rental value when the premises are assessed on a capital value basis;
but, in estimating the rent an hypothetical tenant would pay, the effect
of the presence of machinery in enhancing the letting value of the premises
is to be taktwi into account provided they are in the premises with the
purpose of achieving the use intended for the premises.
- 127
Tenants' taxes include balalkhore and water taxes (which are
services rendered by the Municipal Corporation to tenants) and the State
Education Cess and a portion of the Building RepaIrs Cess, both of which
are surcharges to the municipal property taxes levied by the Government.
Under the BMC Act, these taxes are paid by the landlords, which corresponds
to the practice in Bombay of including service taxes in rents. No
deduction for property tax liability is authorized when the tenant pays
water charges.
The statutory deduction of 10% is intended to represent the
probable annual average cost of repairs,'insurance and other expenses
necessary to maintain ' a property in a state which commands this rent.
The term "other expenses" usually refers to a sinking fund that might be
annually contributed to with a view of replacing the property at the end
of its lifespan. The deduction is always allowed even when repairs are
not realized and it is usually granted to all types of properties with few
exceptions (Central Government projects and vacant lands).
In practice, the concept of "hypothetcal" rent -as defined above
is not applied as a result of a Rent Control Act in existence in Bambay.-
This Act defines a "standard rent" as the rent which was paid as of
September 1, 1940, or--in the case of properties built after 1940--the first
letting rate thereafter. This "standard" rent is taken as the annual rateable
value for assessment purposes. The standard rent is determined in relation
to premises and not in relation to persons. The adoption of the standard
1/ Banbay Rent and Lodging House Rates (Control) Act of 1947.
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rent as opposed to the hypothetical rent as the rateable value to be
used for assessment purposes results from recent court decisions. Until 1962,
it was held,by the Courts that the Rent Restriction Act may not be1/
considered in arriving at the annual value of a property. This position2/
was reversed in a Supreme Court decision in 1962 which held that there cannot
be any increase in Municipal tax unless the Municipality increases the rate of
the tax. On this basis, it has become a common argument that, while determining
the annual letting value of any property, the restrictions placed by the
Rent Control Act cannot be disregarded on the gounds that a Court has to
determine the value of a property to the landlord and not to the tenant.
It is further argued that if a landlord cannot recover anything in excess
of a standard rent, then there is a limitation which acts on section 154 of
the BMC Act. -This means that the benefits of the interpretation of the words
reasonable and fair incorporated in this section should be considered
3/in favor of the landlord.
The Rent Control Act applies to all residential premises let for
residence, education, business, trade or storage. Exemptions from the
Control Act concern all Goverxment and Corporation owned premises. The Act,
1/ In angharam Jiwandas vs. Bombay Municipal Corporation (1951) Ban. 713;
1953 Ban. IR 145-55.
2/ In Corporation of Calcutta vs. Smt. Padma Devi and others AIR 1962
Sc. 151-155.
3/ From "A Study of the Adverse Effects of Rent Control Act on the
Assessment of Properties in Bombay", the All Indian Institute of
Local Self-Goverment.
- 129 -
- - **
however, applies to premises let to the Goverrment or the Corporation. It
also applies to hotels and lodging houses. In these cases, a "fair rate"
which is determined by a Controller appointed by the Government is to be
charged for board, lodging or other service provided in a hotel or a lodging
house. In 1973, the Act was extended to encompass
premises given on a license basis. A specific clause was introduced in
the Act in order to close a major loophole existing in the legislation.
which allowed private developers to get around the problem of rent control
by letting properties on a "leave and license basis". Under this system,
the property is licensed to an individual, usually on a yearly basis,
thereby allowing the landlord to raise the rent fra year to year.
Finally, the implementation of the Rent Control Act rests with the
Courts since no rent control board has ever been established. The tenant
has the burden of the proof.
C. Exemotions
The system of exemptions frcm property taxes, including service
* charges, has evolved progressively into a rather complex system. A summary
on property tax liabilities by major types of property ownership is given in
Table 43.
1. Exemption from the General Rate:
The general principle governing exemptions is as follows:
Table 43: Property Taxes Liabilities by Major Types of Ownership
MunicipalProperties State Government Central Government
Budget A Other Non- Non- Bmbay
Prop- Prop- Resi- Resi- Resi- Resi- Port
Private erties erties dential dential dential dential Trust
Property Taxes
-- General Tax and Fire Tax x 0 x x k 2 2 2
1/-- Water taxes on property values (x)- x x - - - -
-- Halalkhore Tax x x x x - - -
-- Halalkhore Special Rate - - x x x x
-- Municipal Education Cess x 0 x x 2 x x 2
-- State Education Cess x 0 x x 0 0 0 x
-- Building Cess X2/ 0 0 0 0 0 0 0
x - Subject to- - Not subject to
0 - Exemptf- Exempt with qualifications
1/ When no meter is installed
2/ Limited to City Limits
Source: BMC Staff
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There is a blanket exemption for buildings and lands, or parts
thereof, exclusively occupied for public workshops or for-.dharitablP_---
purposes. Charitable purposes are defined as"relief to the poor, education,
medical relief and the ad7ancement of any other object of geieral public
utility." The exemption is not, however, extended to those in which any
trade or business is carried on or in which rent is derived--reZardless
of whether such rent is or is not applied to religious or charitable
purposes. The portion of a building or land exempted from general tax is
regarded as a separate property for purposes of taxation.
There is an exemption for buildings and land used by the Goverment
for public purposes or by the Corporation. Also exempt are buildings and
lands belonging to diplomats or to a foreign state. Effectively, though
not legally, buildings and lands valued Rs 5/- and under are not taxed
because of collection difficulties.
In addition to these exemptions, the BMC Act allows some concessions
on the general rate charged to newly constructed small tenements. Under
section 114A of the Act, concession of three tenths of the General Tax is
admissable for a period of 10 years inthe case of buildings owned by the
Cooperative Housing Society and used for residetial purposes. Similar
doncessions are granted to the extent of two tenths of the General Tax in
all other cases. This concession is granted providing that the building was
completed, first let out, or occupied on or after April 1, 1956, and that it
consists exclusively of tenements,
132 -
Privately owned vacant land is subject to the general rate but
2/3 of this is rebated on grounds that no current annual rent receipts are
accrue to the owner. Government owned vacant lands are exempt from the tax...
The exemption of State Government properties is more
nominal than real, since the Government pays the Corporation a
contribution in lieu of the General Tax. The State Government pays
a sum equivalent to 8/10th of the mount which would be payable by an
ordinary owner on account of general tax. This principle is not applicable
to the properties belonging to the Central Government. Due to the provision
contained in section 15 of the Gover=ment of India Act of 1935 and the
analogous provisions obtaining in Act 285 of the_Indian Constitution the
Central Government properties, both residential and noh-residential, are
divided 'nto 2 categories: (a) those built prior to April 1, 1937 and
(b) those built after that date. In the first case, the Central Government
pays a sum in lieu of general tax at 80% of the general tax payable by an
ordinary taxpayer. In the second case, the properties are totally exempted
but after several representations, the Central Government agreed in 1967 to
pay service taxes in lieu of the general tax. . Tese '-s rvi
tax rates depend upon the situation of Government properties,
the extent of availability of civic services within the areas and self-
sufficiency in all respects. The rates which have been determined by the
Central Government are as follows:
(1) For isolated properties where all services are
available in the same manner as for private properties, the
Government pays service charges equivalent to 75% of the property tax
realized from private individuals.
- 133 -
(2) In the case of large and campact colonies which are self-
sufficient with regard to services or where some of the senvices are
being provided by the Government Departments themselves, the service charges
are calculated as follows:
(a) For colonies which do not (receive civic
services within the areas and are self-sufficient
on all respects, the payment is restricted to
33-1/3% of the normal rate of property tax applicable
to private properties.
(b) For colonies where only_a partial use of the service
is made, serviccharges will be paid at 50% of the
normal property tax rate.
(c) For properties entirely serviced by the Municipality,
service charges are 75% of the normal property tax
..... _ ,rate.- .
Properties belonging to the Port of Bombay are liable to pay every
year a sun in lieu of General Tax and equivalent to 95 percent of the amount
which ordinarily would be payable. . . .- . . -- ---
The exemptions applicable to municipal properties do not include
the properties vested in the Corporation because separate provision have been
made in the Municipal Act for taxation of the Bombay Imprqvement Trust and
BEST properties.
Specific arrangements are made in the matter of levy and adjustment
of taxes for different classes of properties.
Unlet goveregit- lands are assessed in the same way as other
lands belonging to private individuals and let-out lands are assessed
on the basis of rents realized. The rateable value is fixed once
a year.
Tenants of structures rented on Trust Lands of the BMC are directly
liable for the payment of municipal taxes on the structures erected by them
on Corporation land. BEST properties are required to pay municipal
property taxes and are treated as privately-owned premises.
Table 4h gives the number of properties totally exempted from
the general rate. This table does not include municipal properties,
goverxment-owned properties or properties owned by quasi-public institutions,
since those properties are in practice subject to the payment of an amount
in lieu of the property tax. Estimates of rateable value exempted from -
the general rate were computed on the basis of the amount of tax exempted
as reported in BMC documents. About 3% of the total number of properties
registered on the Assessment Books are exempt and there is no significant
difference in this percentage as between the City and the Suburbs nor has
it changed significantly over time. However, the Core City has a markedly
higher percentage of rateable value exempted than does the rest of Greater
Bombay.
Table L4: NMBER OF PROPERTIES EXEMPrED FROM GENERAL TAX, AMOUNT OF GENERAL TAX EXEMPTED
AND ESTIMATES OF RATEABLE VALUE EEMPTED(1962 - 1971)
1962-63 1963-64 1964-65 1965-66 1966-67 1967-68 1968-69 1969-70 1970-71 1971-72
City0
Number of Properties whero General Tax is Exempted 2,150 2,145 2,188 1,598 1,864 3,537 3,544 3,497 3,223 3,354
Exempted Properties as a % of All Properties 3.73 3.72 3.17 2.23 2.41 4.50 4.40 4.16 3.72 3.86
Amount of Tax Exempted (Rs '000) 5,249 6,958 7,167 8,119 8,461 8,880 9,088 9,601 11,435 12,917
Estimates of-Rateable Value Exempted (Rs '000) 21,208 28,113 28,958 32,804 34,186 35,879 36,719 38,792 46,202. 52,190
Exemptions as a . of Total Rateable Value (%) 6.47 8.22 8.06 8.85 8.79 8.68 8.51 . 8,39 9.39 9.95
Suburbs
Number of Properties where General Tax is Exempted 1,202 1,427 2,285 2,274 2,390 2,423 2,205 1,861 1,910 1,962
Exempted Properties as a % of All Properties 2.29 2.55 3.65 3.44 3.41 3.26 3.04 2.47 2.45 2.44
Amount of Tax Exempted (Rs '000) 1,025 1,577 2,746 2,894 3,658 3,352 4,186 2,019 2,229 2,320
Estimates of Rateable Value Exempted (Rs '000) 4 141 6,372 11,095 11,693 14,780 13,543 16,913 8,158 9,006 9,374
Exemptions as a % of Total Rateable Value (5) ,.i 6.18 9.16 8.74 9.78 8.09 9.96 4.37 4.39 4.08
Extended Suburbs
Number of Properties where General Tax is Exempted 344, 420 895 916 951 964 991 764 1,009 1,094
Exempted Properties as a % of All Properties 1.40 ' 1..9 3.12 3.05, 3.02 2.94 2.54 1.89 2.43 2.54
Amount of Tax Exempted (Rs '000) 103 181 233 522 550 559 561 1,610 1,794 2,053
Estimates of Rateable Value Exempted (Re '000) L16 73 941 2,109 2,222 2,259 2,267 6,505 7,248 8,295
Exemptions as a % of Total Rateable Value (%) 1.52 2.37 2.48 4.99 4.58 4.13 3.11 8.15 7.98 8.50
Greater Bombay
Number of Properties where General Tax is Exempted 3,696 3,992 5,368 4,788 5,205 6,924 6,740 6,122 6,142 6,410
Exempted Properties as a % of All Properties 2.75 2.85 3.35 2.85 2.91 3.73 3.51 3.06 2.98 3.05
Amount of Tax Exempted (Rs '000) 6,377 8,716 10,146 11,535 12,699 12,791 13,835 13,230 15,458 17,290
Estimates of Rateable Value Exempted (Rs '000) 25,766 35,216 40,994 46 606 51 188 51 681 55 899 53 455 62 456 698 9
Exemptions as a % of Total Rateable Value (%) 5.77 7.40 7.91 .53 .70 .13 6.29 1.33 1.92
Source: Administration Reports of the Municipal Commisaioner for Greater Bombay.
'%ji
1l36-
2. Exemptions from Municipal Service Taxes
a. Water and -alalkhore Taxes are levied expressely to finance water
and sewerage services. Where meters are provided, water charges are
based on consumption. Properties without meters are charged a water
tax based on property value--with the exception of suburban properties
where a water tax on property values is not levied at all. On the
other hand, some properties are charged twice. Hutments that,
typically receive water service through standpipes are charged both
the water reate and a standpipe charge. The criteria for water rate
liability is not that every property should have a water connection
or a privy, but whether water supply is available, whether sewerage
services can be rendered by the municipality.
Municipal properties are charged water and halalhore taxes; this
rule is based on the argument that the Municipal Commissioner has no power to
exempt Corporation properties from "service" taxes. These taxes are levied
on property value even though the properties are metered and even on those
properties located in the suburban areas. Properties which belong to the
BEST and the former Bombay Improvement Trust are treated as private
properties' by special provisions made in the Act.
All Central Government properties, incldding residential buildings,
most State Government properties and properties belonging to the Bombay
-137-
Port Trust are charged Halahkhore tax at a special rate approved by the
Standing Co=mittee. The rate is fixed by the agency with reference to
the cost or estimated cost of collection, removal and disposal of
excrementations and polluted matter from the premises. It is based on
the quantity, according to basket loads with the unit being five ba&ket
loads per day. One half of the monthly pay of the Halahkhore is taken as
the cost of collection and the other half as the cost of removal. -The
cost of disposal varies with the expense for "traction". The present rate of
Halahkhore tax is Rs 81.00 per month for the collection, removal and
disposal including supervision charges of 5 basket loads (i.e., 21-5 lbs.)
per day, based on a charge.per month of approximately p75 for an adult and
p38 for a child. Residential buildings owned Jy the State Government are
-treated on the same basis as properties owned by private individuals.
3. Exemptions from the Municial Education Cess Y
Properties valued less than Rs 75 are not subject to the Cess.
In addition, all lands and buildings vested in Central Government and all
other buildings and lands which axe exempted from the General Tax, are
exempted from this tax. State Gvernment properties used for administrative
purposes are liable to pay a sium 1.r. lieu of the Education Cess equivalent
to 80 percent of the Cess paid by private parties.
4. Exemptians from Government Servioe Taxes
As a general rule, the exemptions from the State Education Cess are
the same as those from the General Property tate. Only privately owned
properties located in the City are liable to the payment of this Cess. Among
them, newly constructed buildings are exempted under certain conditions.
1/ See Section 195 (E)(1)(a) of the BC Act.
- 138 -
D. Percentage Rate Structure
The rates at which property taxes are levied are dete,mined every
year by the Corporation at the time of preparing the annual budget. The BM4C
Act, however, stipulates minimum and/or maximum rates and the Corporation
may fix any rate within the prescribed limits. The Act does not determine
any range for the water tax and the rate is the one which is deemed "reasonable".
Table 45 indicates the statutory limits of rates for each component of
the property tax, as well as the current rate of these taxes. The rate
of the general propert,y tax varies to sane degree between the geographical
subdivisions of Greater Bombay. Lower rates are appliedin sane villages
which were merged into the Corporation during the last territorial extensions
of the BM (see Table 46).
Property tax rates have not changed frequently over the last decade
The last increase in the General Rate, from 19.75 percent to. the current 24
percent, was in 1963. The water tax was increased from the 1963 rate of 4-1/2
percent to 7 percent as of April 1, 1973; the Halalkhore rate was raised from
3 percent to 3-1/2 percent in 1959, and has since remained at the same level.
Water and halkhore tax rates were expected to be raised between 197j
and 1975.
1/ Rates of taxation fran 1936-37 onwards for Babay City:
(1) General Tax including fire tax
1936-1945 11-1/2% of rateable value
1945-1946 12-1/2%
1947-1952 14-3/4%1952-1958 17-3/41959-1963 19-3/4%1963 onward 24-3/4%
(2) Water Tax1936-1963 3-3/4%1963-1973 4-1/2%
(3) Halalkhore Rate1936-1959 3 %1959 onward 3-1/2%
- 139 -
Table 45$ Property Tax Rates as a Percentageon Rateable Value
Taxes Statutory CurrentLimits Rate
General Taxl/ min. 8%; max 26 24%
Fire Tax min. 1/8%; max 3/4 3/14
Halahkhore max 5% 4.5%min 72 annas/year
Water Tax 7%
Education Cess-
-- properties valued. Rs75 - Rs299 ) max 5 2%-- properties valued Rs300 and above ) 2
2/State Education Cess2
-- properties valued Rs7 - Rs299 2%
-- properties valued Rs300 and above
Additional State Education Cess2/
-- properties valued i7-Rs299/ 1%--properties valued Rs300/ and above -I1
. Building Repair Cessl/ 2%, 20%, 15%
1/ The rates above refer to the most common rate applied in Greater Bombay.
However some areas located in the Extended Suburbs are still subjectto lower rates due to necessary adjustments after their integrationinto the Corporation in 1957
2/ Levied on the aggregate value of properties belonging to the sane ownerand falling in the same locality.
3/ By category of property based on their date of construction.
Source: BM Staff
- 140 -
Table 6 GEAIL PROPERTY TAX RATES
City & Suburbs remained constant throughout the periods 24 3/4%.
Extended Suburbs changed in the following instances:
Former Municipalities: 71-72 67-68 66-67 64-65 63-64
Malad 24 3/4% 24 3/4% 24 3/4% 24 1/4% 22 1/4%Kandiv1i 24 3/4% 24 3/4% 24 3/4% 24 1/4% 22 1/4%
Boriv1i 24 3/4% 24 3/4% 24 3/4% 24 3/4% 22 3/4%
Mulund 24 3/4a 24 3/4% 24 3/4% 24 3/4% 24 3/4%
Villages of:
Valnai 24 3/4% 23 1/4% 21 1/4% 19 1/4% 17 1/4%
Dahanukar Wadi 24 3/4% 23 1/4% 21 1/4%.* -19 1/4% 17 1/4%
Panchayat of 22 3/4% 20 3/4% 18 3/4% 16 3/4% 14 3/4%
GoregaonDahisar 20 3/4% 18 3/4% 16 3/4% 14 3/4% 12 5/4%
Villages in respect of 18 3/4%non-Industrialproperties
Villages in respect of 24 3/4% 24 3/4% 22 3/4% 20 3/4% 18 3/4%
properties occupied forindustrial purposes
Villages in respect of - 16 3/4% 14 3/4% 12 3/4 10 3/4%
other properties in thevillages which had nolocal bodies prior totheir merger with BMC
Source: BM Staff
- 111 -
The data in Tables 47 and 14 indicate that the total municipal
nominal rate varies with rateable values from 35.25 percent to 41.5 percent.
The Building Repair Cess levied on most private residential properties in
Bombay City should also be added to these rates. Since this cess is levied
on permanent structures whose rateable values can be reasonably assumed
to be over Rs 75, it can be seen that certain properties are taxed at a
rate of between 55.25 percent and-66.25 percent of their rateable value.
E. Growth in Assessed Value
Rateable value increased at an average annual rate of 7.3 percent
during the 1960-1972 period; but when measured in terms of constant prices,
the rate of increase has been at the low rate of 1.3 percent. As a result, real
rateable value has not kept pace with population growth. In real terms,
it declined from Rs 101 per capita in 1960-1961 to Rs. 77 in 1972-1973
(Table 49). There are, moreover, intraregional disparities in the
rate growth. For example, rateable value(in current prices) of properties
located in the city increased by 5.2 percent against 10.9 percent and 14.1
percent for suburbs and extended suburbs, respectively. (Table 49).
The City's percentage of total assessed properties has declined
over this period while its proportion of exempted properties has risen to
a current level of over 52 percent. The number of newly assessed properties
in Greater Bombay has declined , but the suburban areas' percentage exceeds
z-by far--the city's share with 70.5t percent as compared to 29.5 percent
Table 47: Effective Rates of the Property Taxes
Rateable All Water TaxValue Property General (Rateable Halalkhore Educ atior
Rs '000 Taxesl/ Tax2/ Value Tax Cess
1962-63 46,190 25,62 16.95 1.57 2.60 1.27
1963-64 475,841 26.68 19.65 1.48 2.73 1.79
1964-65 517,933 25.73 19.41 1.42 2.67 1.71
1965-66 546,158 25.81 19.68 1.44 2.78 1.80
1966-67 588,065 26.70 20.72 1.39 2.80 1.76
1967-68 635,092 26.28 20.49 1.37 2.85 1.49
1968-69 673,773 29.11 22.83 1.29 2.86 2.11
1969-70 728,290 27.63 21.45 1.23 2.87 2.08
1970-71 787,598 27.38 21.43 1.1h 2.99 1.81
1971-72 851,246 27.85 21.94 1.06 2.95 1.89
1972-73 937,602 31.99 2h.62 1.60 3.73 2.03
1/ Include also Urban Immovable Property Tax.
2/ Includes Fire Tax.
3/ Based on Budget Estimates.
Source: Tables 34 and 49
_ 143 -
Table h81: PROPERTY RATES BY VALUATION VALUE
Type of Levy Rateable Value(in Rupees).
Under 75 75-299 Over 299
General Rate (includes Fire tax) 24-75 24-75 24-75
Water Taxi/ 7.00 7.00 7.00
Halalkhore 3.50 3.50 3.50
Municipal Education Cess 2.00 2.50
Total BMC Rate. 3.25 37.25 37.75
State Education Cess - 2.00 2.50
Additional State Education Cess - 1.00 1.25
Municipal Rate and State 35.25 40.2 41.50Education Cesses
Building Repair CesS2/ 10.00 10.00 10.00
Municipal and State Rates 45.25 50.25 51-50
1/ Wter tax on rateable value,
2/ On residential, let out and privately-owned properties located in the City.
Source: BMD Staff
Table 49 RATEABLE VALUE FOR GREATER BOMBAY
1960 - 1972
(In thousand'rupees) Rate able
Value
Rateable Rateable per
Value Value Capitaat per at
Extended Greater Constant Capita Constant
City Suburbs Suburbs Bombay Prices (Rs) Prices(Rs)
1960-61 306,100 15,300 23,000 404,400 404,400 101.14 101.14
1961-62 316,300 81,800 24,700 422,800 398,868 101.83 96.06
1962-63 327,800 912,001 27,200 446,200 398,393 103.63 92.52
1963-64 341,965 103,093 30,783 475,841 399,866 106.7 89.55
1964-65 358,981 121,089 37,863 517,933 411,058 111.86 88.77
1965-66 370,275 133,618 42,235 546,158 410,645 113.75 85.52
1966-67 388,593 151,011 48,461 588,065 411,234 118.11 82.59
1967-68 413,228 167,254 54,610 635,092 401,957 123.00 77.84
1968-69 431 169,641 72,667 673,773 405,887 125.83 76.80
1969-70 462,012 186,545 79,733 728,290 420,977 131.16 75.81
1970-71 491,868 204,947 90,783 787,598 437,554 136.70 75.94
1971-72 524,139 229,535 979572 851,245 462,790 142.57 75.83
1972-73 565,918 260,798 111,604 938,320 473,899 151.55 76564
Average annual
rate of growth 5.2% 10.9% 14.1% 7.3% 1.3% 3.4% - 2.4%
:Sources: IBRD Report on Bombay "Public Finance and the Efficiency
of Urban Development" 1971 for the years 1960 to 1962.
Administration Reports of the Municipal Ccmmissioner for Greater Bombay.
145h -
,fCor the City. The number of properties enlarged has fluctuated over this
period and the share of enlargements in the City area has increased--although.
of all properties enlarged, less than 25 percent are in the City area.
Finally, of all properties demolished -nearly one half have been in the city
area, though this proportion is declining. Due to varying rates of increase
in rateable value,.,# ratio between the per property value in the extended
suburbs and the City has increased from 19.5 percent im 1960-61 to about
39 percent in 1971-72.
Rateable value per property assessed, is approxi.mately Rs 4,00
as compared to Rs 3,1400 in 1960 (Table 50). When adjustment for price
increase is made, this value actually declined over this period for Greater
Bombay. However., suburban properties have remained approximately constant,
while properties located in the far out suburbs have appreciated. Here again,
the data show a markedl.y greater per unit rateable value in the city area than
in either suburban area.
Little information is available on the components of the rateable
value by category or by property use-.In 1971-72, properties used for residential'
purposes represented abou'76 percent of all properties in Greater Bombay and
59.5 percent of all rateable value (Table 5l). Again, geographical location
is important. The suburban areas tend to have a higher proportion of
residential properties than the city area and, in terms of assessed value,
residential properties represent about 75 percent and 72 percent in the
suburbs and extended suburbs respectively of all rateable valu,e versus
approximately 52 percent in the city area.
- i146 -
Table 50: Rateble Value Per Property Assessed - BMC(R '000)
Ratio
Assumed ValueExtended Greater Extended Suburbs
City Suburbs Suburbs- Bambay City
1963-64 5,934 1,840 1,162 3,395 19.81965-66 9,1 97 1,932 1,318 3,228 25.36
1965 66 5,168 2,023 1,407 3,256 27.22
1966-67 5,106 2,155 1,54o 3,285 30.16
1967-68 5,255 2,248 1,667 3-1418 31.72
1968-69 5,356 2,341 1,861 3,508 34.714
1969-70 5,494 2,476 1,971 3,64 35.87
1970-71 5,683 2,626 2,182 3,820 38.39
1971-72 6,038 - 2,859 2,266 4,051 37.52
1972-73 - 6 ,h60 3,161 2,S21 4,377 39.02
Average annualrate of growth 1.0% 6.2% 9.0% 2.9%
Average annual rateof growth of rateablevalue at constant - 4.3% 0.4% 3.0% - 2.9%prices (Base=1960=100)
3Souc: Tables 44 and 49
Table 51: Number of Properties and Rateable Value
City Suburbs Extended Suburbs Greater Banbay
1966-671/ 1971-72 1966-671/ 1971- 7 2 1966-671/ 1971-72/ 1966-671/ 1971- 72 /Number of Properties
-- Residential 57,697 68,327 57,500 62,804 25,965 33,865 141,162'. 158,996
-- Non-Residential 19,772 24,474 12,565 17,470 5,494 9,186 37,831 51,130
% Residential 74.47 71.80 82.06 78.23 82.53 78.66 78.86 75.66
Rateable Value (Rs 'OO)
Residential 190,791 275,161 107,363 170,80 26,266 60,782 324,420 506,423
-- Non Residential 197,802 248,978 43,668 59,05 22,195 36,790 263,6 45 344,823
% Residential 49.09 52.49 71.09 74.27 54.20 62.29 5.16 59.49
Rateable Value per Property (Rs)
-- Residential 3,307 4,415 1,867 2,716 1,011 1,795 2,298 3,189
-- Non-Residential 10,004 10,173 3,474 3,380 4,040 4,005 6,969 6,74
% of Residential ofNon-Residential 33.05 43.39 53.74 80.29 25.02 4.81 32.97 h7.22
Sources: All India Self Government Report.
Assessor and Collector.
h*ra
-2148-
Table 52: VARIATION AMONG WARDS IN SELECTEDPROPERTY TAX STATISTICS
Lomest - .11ighest Ratio of Highest
Value to Lowest Value
Total number of properties 3,007 26,940 8.96
Rateable value 24,224 122,600 5.06
Rateable value per capita 87.18 621.92 7.16
Residential value 9,322 77,242 8.24
Residential value per capita 35.27 226.75 6 .42
Rateable value per property 2,098 39,5488 18.85
Rateable value per 19.88residential property 1,124 22,300 .o.30
Rateable value per non- 28.63residential property 1,)409- 70,818
Rateable value perowner-oCCpied properties 7.78 222.78
Source: Same as Table 51
-l9-
Table 53.: Percentage Distribution of Ntnber of Propertiesby Valuation Range
1971-72 1963-6h
tended tendedCi Suburbs Suburbs Total city Suburbs Suburbs Total
Below Rs 200 34.83 25.65 31.42 30.62 29.01 25.32 31.96 22.68
Between Rs 201-300 4.59 11.52 9.98 8.3h 3.68 12.10 12.69 9.59
301-400 4.38 8.35 8.00 6.64 4.29 9.61 11.39 8.20
401-500 4.40 7.85 6.26 6.10 3.75 8.05 6.80 6.40
501-750 6.08 8.15 8.63 7.ho 6.00 9.73 9.25 8.61
" 751-1000 .38 6.65 6.52 5.68 4.87 7.93 6.35 6.78
1,001-1,500 5.32 6.92 8.11 6.50 7.65 7.84 6.71 8.08
1,501-2,000 4.48 5.85 5.72 5.26 6.48 6.23 5.44 6.62
2,001-5,000 12.35 5.73 9.1h 9.16 15.03 8.h0 5.82 11.52
5,001-10,000 8.53 5.92 2.85 6.37 9.68 2.88 2.22 6.07
10,001-20,000 6.03 h.12 1.50 4.37 5.31 1.18 0.65 3.05
20,001-30,000 1.64 1.45 0.74 1.38 1.57 0.38 0.26 0.93
30,001-40.,000 0.90 0.88 0.43 0.80 0.74 0.13 0.13 -o.42
40,001-80,000 o.64 0.48 0.27 0.50 0.56 0.08 0.12 0.31
80,001-100,000 0.88 0.33 0.02 0.05 0.79 0.05 0.17 0.42
100,001 150,000 0.37 -0.07 o.c6 0.20 0.26 0.02 0.01 0.13
150,001-200,000 0.21 0.01 0.00 0.10 0.11 0.04 0.01 0.07
200,001-250,000 0.14 0.01 0.00 0.06 0.08 - - 0.03
250,001-300,000 0.12 0.01 0.00 0.05 Oh 0.00 - 0.02
300,001-350,000 0.09 0.00 0.00 o.Oh 0.02 0.00 - 0.01
350,001-Above 0.11 0.02 0.00 0.05 0.06 0.01 - 0.03
Source: Same as Table 51
- lo -
The differential in rateable valae per property between residential
and non-residential properties is much less pronounced in the suburbs than
in the city area. In the suburbs, rateable value per residential property
is about 80 percent of the rateable value of non-residential property, compared
to only 43 percent in the city (Table 52).
Ratetble value per residential property in all geographical areas
has increased faster than the rateable value per parcel on-non-3,esidential
property. The rateable value per non-residential property actually decreased
between 1967 and 1971 for suburban properties, and has been nearly constant
for urban properties. The increase in the base is therefore attributable
to an increase in the rate able value of residential properties.
Finally, the components of the city and suburban property tax base
growth may be analyzed by examining time series dita on the number of properties
located in different rateable value brackets (Table 53 and 54). Between
1963 and 1971, the City area showed the largest increase in the number of
properties in th& lowest rateable value class (below Rs 500); large increases
also occurred in the highest rateable value classes in the three geographic'1
divisions. However, on average, suburban areas record larger increases in
- 191 -
Table 5)4: SUMEARY TABLE. PERCENTAGE DIST4IBUTION OFPROPERTIES ASSESSED
City Suburbs Hx-tended--- ---Suburbs
T63-64 1977-72 1963-64 1971-72 1963-6j 1971-72
Below Rs 200 29.01 3h.72 25.32 25.65 31.96 31442
Rs 201-1,000 22.59 23.73 47.42 42.52 W-48 39.39
Rs 1,001-10,000 38.84 30.58 25.35 24.42 20.19 25.85
Above Rs 10,000 9.54 11.03 1.89 7.39 1.36 3.02
Source: Table 53
classes above Rs 750. In the middle range of rateable values, the city
area is characterized by relatively low percentage increases, and in same
cases, even by declines. As a result, the percentage distribution of the
property assessed by valuation range shows for the city an increasing
concentration of properties in the low valuation brackets over this period.
In contrast, the ratios for the suburban properties have remained
approximately constant. An interesting characteristic is the relatively
light concentration ratio of suburban properties in higher valuation ranges,
as compared to the city area properties.
In 1971-72, 41.6 percent of city properties are in the Rs. 100 and
ab-ove range as compared to approximately 32 percent and 29 percent for
suburbs and extended sububs respectively.
The growth in the property tax base of the city area appears to be
largely attributable to the extreme rateable value classes. In the case of
the suburbs, the source of increase in the property tax base is more evenly
distributed among properties with differing' rateable values, in particular
in the middle and high ranges. The description of the composition and growth
of the base of the property tax indicates that the growth in rateable value
is quite income-inelastic. This inelastic response is underlined by the
Municipal Authorities' estimate that no more than 10 percent of the annual
increase in rateable value is due to new construction. The number,of
properties newly assessed or enlarged is about 5 percent of all properties
assessed each year (Table 55). This inelasticity is rooted in the effects
of rent control. Indeed, the slow rate of growth and the uneven distribution
of the city rateable value can be largely explained by the fact that a larger
number of properties have been in existence and therefore have been let for
a longer period. In addition, few new buildings can be built due to an
acute shortage of building sites in the central area and the sururban areas
are characterized by a considerably higher rate of population growth.
The effects of rent control on the assessem6nt of properties are
the object of a recent study by the Indian Institute of Local Government. 1/
The results for the years 1940-41 and 1970-71,2/ show that the rental values of
1/ The All India Institute of Local Self-Government - Regional
Center for Research and Training in Municipal Administration -
"A Study of the Adverse Effects of Rent Control Act on the
Assessment of Properties in Bombay."
2/ Properties occupied for four different purposes such as resi-
dences, shops, offices and factories, situated in all nine wards
of the city prcper and two wards from the suburbs were randomly
selected. The properties were surveyed for the year 1940-41 which
is the base year under the Rent Act for the purpose of determination
of standard rents of properties exdsting since prior to that year
and for the year 1970-71. So far as the suburbs are concerned, as
the Inspection Registers for the year 1940-41 were not at hand, the
base year for comparison is taken as the year 1960-61.
s153- 163 --
Table 55: Total Number-of Properties, PropertiesNewly Assessed and Property Enlarged
Total Properties PropertyProperties Newly Assessed Enlarged
Number % Number $
1963-64 140,19 6,573 4.68 3,592 2.56
1964-65 160,457 9,270 5.77 4,232 2.63
1965-66 167,720 8,213 4.89 5,897 3.51
1966-67 178,993 7,479 4.17 6,0P5 3.38
1967-68 185,824 7,629 4.10. 4,973 2.67
1968-69 192,080 7,974 4.15 3,859 2.00
1969-70 199,859 6,411 3.20 2,98L 1.49
1970-71 206,195 5,011 2.43 4,073 1.97
1971-72 210,126 5,360 2.55 4,481 2.13
Source: Administration Report of the Municipal Commissioner forGreater Bombay
residential properties in the City proper have increased by four times.
Rents in 1940 variad between Rs 6 and Rs 12 per 10 square meters of area
while they varied from Rs 27 to Rs 48 per 10 square meters in 1970., The.
rental value of residential properties in the suburbs have increased fran
Rs 11 to Rs 26 per 10 square meters, i.e. by about 136 percent. For
cmmercial properties located in the city, the average rate is respectively
Bs 85 per 10 square meters in 1970-71 against Rs 19 per.10 square meters
in 1940-41, i.e., an increase of 350 percent. Similarly, a very sharp
rise in rates can be noted in respect of properties used for office purposes
where the current average rate is 11 times as high as the rate in existence
in 190-41. The rental values of commercial properties and particularly
of offices apparently reached very high values in the central area. There
as instances of small spaces called table spaces (measuring about 3 to 4
square meters) ~with charges as high as Rs 200 ad above per month.
There are also instances recordedin the Municipal Registers
whereby office premises fetch Rs 200 and more for 10 square meters
per month. These values are expectedly much lower for the suburban properties
but the average rate of increase is very high. The increases for suburban
commercial properties and offices are 213 percent and 260 percent respectively.
Finally, industrial properties have increased in the city fran
Rs 6 to Rs 34 per 10 square meters. Factories located in the suburbs have
peculiar aspects as most of them are self-occupied and are let only in rare
cases. Wherever, they are let, the considerations are not the rents pure
and simply but they include charges for hire of machinery, furniture, know-how
and other items extraneous to assessment and are of the nature of license
fees. Furthermore, on account of enforcement of Development Rules, new
industries are not allowed to locate in the city but are allowed in the
suburbs. The average letting rate of Rs 6.00 (in the suburbs a in the
city) has spiralled up to Rs 53 per 10 square meters in 1970 or 775 percent.
The study also attempts to assess the additional rateable value
which would be generated if the properties were assessed at market rentals..,
The rates of increase which is adopted in the computation are.. regarded as
being reasonable rates after making allowances for the irregularities
in the observations. On the basis of these computations, the rateable
value thus determined would be increased by 610 million Rs or by 277
percent.
A further reason for the underassessment of properties is the
fact that the capitalization rates which are used to assess State Govern-
ment owned properties amount only 4 percent of the cost of land and 6
percent of the cost of construction. These rates have been in existence for a
long time and are now out of line with recent interest rates. The Municipal
Authorities are attempting to raise these rates to a level of 9 percent
of the cost of lands and buildings taken jointly but no decision has yet
been taken on that matter.
F. Assessment Method
1. Residtntial Properties
Residential properties can be grouped into four classes for
purposes of describing assessment procedures: rent controlled, rented on a
lease and license basis, hutments, and owner occupied.
156 -
As previously stated, the Rent Control Act of 1947 established as
a standard rent that which prevailed before 1940, or the first letting rate
thereafter. The standard rent less a 10 percent statutory deduction and
a deduction for tenant's taxes forms the basis of rateable value for
rent-controlled properties. Of the 165,968 residential units in Bambay,
approximately 30 percent are under the rent control (Table 56). The standard
rent may be increased in a few cases, mainly when tenants' taxes are
increased and when improvements or structural alterations ,other than'
normal repairs are made.
In addition, for -those'properties let before 1940, the rate of
increase authorized is as follows:
Rate of Increase
Category of Properties As a of Standard Rent
1) Residential premises: rent does not Not exceeding 5'exceed Rs 20/month
2) Residential premises: rent between Not exceeding 7Rs 20 and Rs 80/month
3) Residential premises: rent over Not exceeding 10%Rs 80/month
4) Non-residential premises:a. Rent does not exceed Rs 50/month Not exceeding 74
b. Rent is over Rs 50/month Not exceeding 12
5) Premises used for the purposes of a Not exceeding 50%movie theater
Table 56: NUMBER OF PROPERTIES UNDER RENT CONTROL AND OTHER;,PROFERTIES BY WARD - GREATER BOMBAY
Residential Property Non-Residential Properties Total %Total Rent
Number of % % Rent % Owner % Rent % ControlledWard Properties Total Hutnents Control Occupied Others Total Control Other Properties
A 3,100 2,000 42.25 51.0 1.15 5.10 1,100 72.73 27.27 59.03B 3,007 1,483 - 94.81 1.08 h.11 1,524 - -6.76C 5,727 5,3 - 62.90 0.79 36.31 288 69.79 30.21 63.2kD 8,123 4,312 3.83 64.59 10.64 20.94 3,811 h6.13 53.87 5.93E 7,497 6,181 4.01 33.21 0.95 61.82 1,316 9-.83 v.17 kk03F/S 11,ho 10,207 63.68 9.37 0.76 26.19 1,233 - - 8.35F/N 9,372 8,326 51.3 11.76 12.17 24.65 1,06 2.49 97.51 10.72G/S 12,128 9,107 60.93 22.22 10.50 6.35 3,021 18.kh 81.56 21.28G/N 15,892 14,h60 2$.40 43.20 1.33 30.16 1,432 26.89 73.11 W-73H 17,730 15,841 17.83 27.35 17.5 37,28 1,889 25.20 74.80 27.12K 26,9h0 23,025 36.62 25.38 10.02 27.99 3,915 54.00 46.00 29.9hP 17,200 11,412 19.39 32.77 33.10 14.74 5,758 17.80 82.20 27.76R 13,350 12,455 21.13 NA 23.99 NA 895 - - NAL 10,668 8,640 21.9k 44.80 1.91 31.34 2,028 41.03 58.97 4.09M 1I,105 13,58 2. NA 3.36 NA $I7 - - NAN 11,547 9,312 9.66 NA 10.95 NA 2,235 - - NAT 12,65 10,180 63.63 8.21 9.70 18.46 2,475 16.36 83.64 9.81
City 76,286 61,515 34.5 33.97 4.61 26.86 14,771 33.68 66.32 33.91Suburbs 75,220 62,763 25.66 22.18 1/ 18.89 33.27 1/ 12,47 29.01 :70.99 23.31 1/Extended 48,975 41,690 39.32 25.01 2/ 8.53 27.14 2/ 7,286 16.98 83.02 25.48 2/Suburbs
Total 200,181 165,968 32.39 30.26 3/ 11.00 26.35 2/ 34,513 28.47 71.53 30.56 3/
1/ On the basis of 3 suburban wards.
2/ On the basis of 2 wards in the Extended Suburbs.
3/ Based on 14 wards.
Source: Office of Assessor and Collector
Residential properties which are given on license are assessed on
the basis of the actual terms of the license. These licenses are cononly
renewable every year and thus the assessment of these properties should
occur every year. However, where the terms of the license are not deemed
to reflect market rents, a comparative rent analysis is used to determine
rateable value. In Ward A, for example, average rent on a license basis
is presently about 40 Rs per 10m2 per month for the ground floor of a property
with a reinforced concrete structure and a slab roof. The present levels df
rateable value of these properties used for residential as well a4 non-
residential purposes account for about .7% of total rateable valle and
4.6% of all properties assessed in Greater Bombay.
Owner-occupied properties, in general, are assessed on a canparative
basis. However, there is an arbitrary preferential assessment of 80 to 85
percent of rateable value. These properties are periodically reassessed.
About 11 percent of the residential properties in the municipal are owner-
occupied, representing about 26 percent of the rateable value of residential
properties.
Hutments are assessed between Rs 2.5 and Rs 7 per month per square meter.,
The physical condition of the hut explains this range_to a larger degree than the
location itself. In Ward A, which is located in the City, hutments are usually
assessed at Rs 5/10square meters/month or Rs 60/year/10 square meters.
Hut-
ments represent about 32 percent of all residential properties assessed.
159
A circular prepared by the Assessor and Collector in Novnber 1971
gave same benchmarks for the assessment of unauthorized structures put up
by persons other than the owner of the land on private, municipal ad
government lands.
(1) Structures of heights of 6.5 ft. or less and in
unsanitary condition should be assessed only at
Rs. 5 per year (i.e., not taxed).
(2) Structures temporary in nature, of bamboo matting,
leaves, grass, old 0.1. sheets or wood and 6.5 ft.
or less in height should be assessed also at Rs 5.
(3) Structures having height exceeding 6.5 ft. with a
roof and walls of old C.I. sheets or A.C. sheets
may be assessed on the basis of Rs 2 per month
as estimated rent.
(4) Structures having a roof either of tiles, C.I. sheets
or A.C. sheets and brick walls may be assessed on
the basis of Rs 3 per month as estimated rent.
Government properties are not subject to the Rent Control Act.
State Government owned residential properties,with the exception of
Central Government owned properties,are assessed on the basis of the lease
negotiated between the landlord and the tenants. Where rents are subsidized,
as in the case of Maharashtra Housing Board, and "economically weak" and
industrial housing progrens, the amount of the direct subsidy is included
in the computation of standard rent.
60-
2. Non-residential properties
a. Commercial properties may be subject to rent controls and in this
case, the assessment is based on standard rents, as in the residential
case above. If canmercial establishments are let on a leave and license
basis, rateable value is established on the basis of the license provisions.
A third possibility is for the assessment of camercial properties on a
reconstruction cost basis, i.e. to estimate the current value of the land
and structure. Such a process has been used for the newer hotels in the
City. The land values are estimated on the basis of comparative sales
and building values on a cost basis. To convert the capital. value estimates
to annual value a rate of 614 and 9% for the building and land respectively was
camnonly used until recently. Due to higher interest rates, the Corporation
is currently attempting to increase these rates to 9% of the aggregate value
of lands and buildings. Under this method, a rateable value of Rs 130/10m2 /
month roan and Rs 12Q/10m 2 /month for the nonroan area has been established
for the Taj Mahal Hotel, with estimates of land value not below Rs 3000.
A final assessment method which could be used is a profits' test--
i.e. the rateable value of a camercial enterprise is the amount it may earn.
This method has been used only for the race course.
b. Industrial properties can be divided roughly into two categories: (1)
small and more traditionally oriented factoriesland (2) large firms such as textile
mills, Bombay Port Trust properties, oil refineries and railways. In the
first case, the properties are usually assessed on the rental value by a
comparative method--old factory types like blacksmith and foundry shops are
currently assessed at Rs 5 per 10i2 per month. The assessment rate used
for other industrial properties in this category are shown in Table 57.
-161-
Table 57: Rates Adopted to Property Used as Factories andWorkshops in Suburbs and ,Etended Suburbs L
1972-7(Rs per 10 m rer month)
Semi- ShedsFactory Permanent & Kutcha
Ward Office Factory Godowns Structures Structures
1. Suburbs
21 21 18 15 11
K West 18 16 14 11 9
K East 17 17 14 11 9
L Saki Naka and 23 19 16 11 8Saki Vihar Rd
L Chandivali 19 17 1h 11 7
L Agra Road 23 21 16 11 10
M Ghatkopas Mahol Rd 20 18 16 11 9
M Sion Trombay Rd 19 17 ( 1 11 9( 15
N Bombay Agra Rd 19 19 16 11 9
N Kanjur East 17 17 16 9 7
2. Extended Suburbs
T Bombay Agra Rd 19 19 14 12 8
P Ward 20 17 14 13 9
R Kandivli Industrial Estate 15 1 - - -
R Kandivli (East) 17 15 12 9
R Borivii (East) 15 15 12 9
1/ There are few properties of this type in the city. The rates are fromRs 2 to Rs 5 higher than those for properties located in the suburbs.
2/ No distinction is made on the basis of processing and non-processing areas.
3/ Old factor types like blacksmith and foundry shops are assessed at
5 Rs/ 10 mn/ month.
Source, Office of Assessor and Collector
- 162 - -
The rates vary fran Rs 7 to Rs 23 per 10 m2 per month for those properties located
in the Suburbs and Extended Suburbs respectively. Properties located in the
City are assessed at rates of Rs 2 to Rs 5 higher than those for properties
located in the Suburbs. Industrial Estates are currently assessed at
Rs 35/10m 2 for the ground floor of estates located in the City and
Rs 30/10m2 for estates located in the Suburbs. Rates go down for higher
floors.
Other industrial properties are usually assessed on a negotiated
basis. The textile mills, of which there are presently 70 in Bombay, are
assessed every 5 years by mutual agreement between the Corporation and
Millowners' Association on a capital value basis. The main criterion used
for assessment purposes is the distinction between processing and non-
processing areas. The assessment rates are shown below. In order to
arrive at the net rateable value, the statutory deduction of 10% is allowed
but tenants' taxes may not be subtracted. Also, the statutory deduction is not
allowed on vacant land. Such textile mills account for 1.8 percent of total rateable
value in Greater Bombay.
The rates for textile mills during 1968-73 were as follows:
(1) Processing areas: Rs 7.37 per 10m2
(2) Non-Processing areas: Rs 6.19 per 10m2
(3) Old Canteens (single shift): Rs 150/month
(4) Old Canteens (double shift): Rs 225/month
(5) New Constructed Canteens: Rs 6.19 per 10m 2
(6) Lands within mill ccmpounds: 3% of capitalized valueat Rs 30/m2
(7) Lands situated outside mill compounds: '5% of capitalizedvalue at prevailing marketrates in the locality
163-
The rates for the period 1973-78:
(1) Processing Areas: Rs 7.5/10 square meters
(2) Non-Processing Areas: Rs.6.25/10 square meters
Railway assessment is fixed by an arbitrat,or who is appointed
by the Central Government. Details as to how the sums, in lieu of general
and Halalkhore taxes, were determined are not available. In the past, the
method,adopted by the arbitrators was based on the profits method. However'
bhecause of the declining profitability of the railroads, the assessment
is now based on a cost of construction method similar to that used for Central Govern-
ment properties, i.e. with a 9 percent factor as the aggregate value of
lands and buildings.
c. Bombay Port Trust Properties (BPT)
The rateable value is worked out every year by the Municipality on
the basis of information furnished by the Port Trust Authority. Thereafter,
the figures are submitted to the Central Government for sanction.
These properties include land held on long building leases and lands
and buildings held directly by the Trustees of the Port. The former are assessed
in the names of leasees on the basis of rents at which they might reasonably
be expected to let from year to year. The latter include docks, wharves,
and railways are assessed on a profits basis; and buildings outside dock
limits. Properties let out for residential or bffice purposes are assessed
on the basis of rents in the same way as similar properties owned by private
individuals. With regard to warehouses, the amount actually received by the
Port Trust by way of rent is taken into account.
-164
. Lighthouses are -assessed at.6 pericent of their .estimated cost.___
In the case of lands let out on a monthly tenancy basis fcr erecting temporary
structures, the structures are assessed in the nane of the Port Trust on
the basis of rents at which they might reasonably be expected to let from
year to year.
Vacant lands are assessed at 1/3 of their rateable value which is
arrived at on the basis of a Contractor's Test; allowance of 2/3 of General
Tax is being made on account of vacancy.
The lands and buildings belonging tfo the BEST are assessed in
the same way as similar properties owned by private individuals. Offices, workshops,
and other buildings are assessed on a floor area basis, bus depots on a rental
basis and electric substations an the Contractors, Test, i.e. by taking a
percentage of the cost of land in its improved state. Bus shelters intended
for the use of the public are not, however, assessed-
Oil and petrol installations are assessed as follows: the structures
are assessed on floor area basis, the tanks on licensed capacity basis and
land on comparative basis. Petrol service stations are assessed by taking
50 of capital value for land and 6% for buildings. However, a rate of 9%
on the aggregate value on lands and buildings is applied to pumps constructed
after March 31, 1972.
Private docks and shipwa7s are assessed ona floor area basis for
structures; and dry docks on rental basis, i.e. on the basis of the average
rents charged by the Port Trust.
- 165 -
d. Central Government Properties
Central Goverment properties ; whether used for residential or
non-residential purposes are assessed on a capital value basis. Until
recently, a rate of L% on land and 6% on buildings was adopted; but the
Government has now agreed to a rate of 9% on the aggregate value of lands
and buildings. State Government properties used for administrative purposes
are assessed at a 4% rate on the land and a 6% rate on the buildings. Comparative
sales analysis is used to assess the capital value of the land and the
architects certificate is used to assess the capital value on the buildings.
The State Government has been under pressure to change this method to the one
now agreed upon by the Central Government. Both State and Central Government
properties are valued by an arbitrator appointed by the Government.
The property values fixed by him are embodied in an "Award" and his decision
holds good for a term of 5 years, subject only to proportionate variation
in the number or extent of the buildings and lands. Rateable value assessed
under these circumstances represent 5% of all rateable value (Table 58).
e. Vacant LAnd
Vacant lands are assessed at 1/3 of their rateable value according
to a capital value basis, the latter being derived on a basis of comparative
sales. The rate currently adopted is 9% but there have recently been legal
disputes because the corporation has been assessing vacant properties which
are bailding sites and on which building activity is going.
G. Administration of the Property Taxes
The Assessnent and Collection Department is responsible for the
assessment and collection of all municipal taxes: property taxes, tax on
- 166 -
Table 58: RATEABLE VALUE OF GOVERNENT PROPERTIESFOR THE QUINQUENNITIM 196)4 - 1969
(In thousand :ruoees)
Extended Greater
Cit:c Suburbs Suburbs Bambay
State Government 1/ 10,047 728 2,025 12,800
Central Government 14,412 9,4.32 1.,.478 25,321
Projects built after 9,390 9,213 1,470 20,073
April 1 , 1937
Total Government 24,458 10,160 3,503 38,121
Source: Rateable Valzie of the Lands and Bui2dings in the City of Bombay., in
Suburbs and Extended Suburbs of Greater Bombay, vesting in Government
it accordance with Section 144, Chapter VIII of the Municipal Act of
1888, 1964-1969.
- 167 -
vehicles and-animals, theater tax, and octroi duties. Its responsibilities also
extend to the collection of charges for fixing street number plates on
properties and of two taxes levied by the State Government--the Building Repairs
and State Education Cesses.
The organization of this unit may be seen in Figure 9. The
Assessor and Collector, who is responsible for the overall Department,
is assisted by five Deputy Assessors and Collectors, i.e. one Deputy
Assessor and Collector for the old city limits; one for the Eastern
suburbs, one for the Western suburbs; one for Vigilance; and one flor Octroi.
The duties of the Deputy Assessor and Collector (Vigilance) are t~c
check the under-assessment and to test-check sane properties. Th Deputy,
Assessor and Collector (Octroi) is in overall charge of the Octroi wing
of the Department. He is responsible for the levy and recovery of Octroi
under Schedule "H" of the Act on foods entering the greater Bombay limits
for consumption, use or sale. The Deputy Assessor and Collector in charge
of property taxes in the old City limits sits at the Head Office and ensures
that the provisions of the Act relating to the assessment, collection and
refund are not overlooked, and that the registers are kept in the prescribed
- forms in the wards placed under his responsibility. He is also vested with
duties extending to Greater Bombay in such matters concerning establishment,
record, printing and stationery. He also scrutinizes the Budget Estimates and
Annual Report of the Assessor and Collector Department and investigates general
complaints against the rateable values of properties. The Deputy Assessors
and Collectors for the suburbs are in overall charge of the areas under them.
The Assessors and Collectors are assisted by 22 Assistant Assessors
and Collectors. One of them is exclusively responsible for the inspection
of the work connected with the levy and collection of the tax on vehicles
0
Dy & DyA &C D A DA & C Department)C
*r-or
for Old City for Easter for Wester for for
Limits Suburbs Suburbs Octron Vigilance
4
41 for 9AAsst. A & C 4 Asst. A & C 1 Assistant 3 AssistantMaharashtra 1 for each 1 for each 1 for each A & C A & C coHousing Board Ward Ward Ward Wheel Tax
Ward A Ward B Ward L Ward H WardsCity
0
Ward C Ward D WardM ad K.-- Wards
Eastern. . ----- S.uburbs
'ard E ard F ard N ard L
---- -Ward
WidG W-dHard T Wad R WesternSuburbs
Source:- .BC Staff
-169-
and animals in all Greater Bombay. This branch functions as a separate
unit and exercises general supervision and control over the wheel tax
work in all ward offices and in the staff of the Motor Branch in the Head
Office, where wheel tax registers are maintained. Bills for wheel
taxes are prepared at the headquarters and are issued to the Ward
offices for collection. There are three Assistant Assessors and Collectors
posted in the Octroi Branch.
The work concerning the property taxes is divided among 17
Assistant Assessors and Collectors with each being responsible for the
supervision of a ward. The assessment and collection of the property taxes
are made directly at the ward office. The Assistant Assessor and Collector
exercises a direct control on special classes of properties
where a rise of 25% or more on value is reported so that values may be
estimated as correctly as possible. Each Assistant Assessor and Collector
is assisted by one Superintendent, Warrant Officers, one or two Deputy
Superintendents and one or two Assistant Superintendents. There is one
Assistant Assessor and Collector especially appointed to look after the
assessment and collection of the properties belonging to the Maharashtra
Housing Board which is the biggest landlord in Greater Bombay. The work
done in the ward offices comprises inspection and assessment of properties,
verification of vacancies, issue of bills and collection of all taxes.
The ward is divided into a number of sections which are under the
responsibility of a Ward Inspector. The ward inspector is in charge of
about 550 properties in the City area and between 750 and 980 properties in
the suburban areas of the municipal Corporation (Table .9). The variation
in the number of properties under the control of one Ward Inspector is largely
- 170 -
Table 59: NUMBER OF PROPERTIES AND SECTIONS IN BOMBAY
Rateable Number Number of Properties
Area in Number of Value in of Average in
Sq. Kw. Wards Rs '000 Sections Total. Each Section
city 6,776 9 565,918 160 87,608 548
Suburbs 17,563 ) 260,798 84 82,507 982
Extended Suburbs 19,424 4 111,604 59 44k,275 750
Greater Bombay 43,763 17 938,320 303 214,390 708
Source: Office of Assessor and Collector
-171l-
due to the physical characteristics of the properties in the various
territorial divisions. In the City, properties are vertically developed,
close to one another, and large in size. In contrast, the suburbs are
spread over larger areas. This variation is also
explained by other functions performed by a Ward Inspector which may
vary slightly fran one section to another. The inspection of properties
is made at least once ayear. His findings of inspection are noted in the
Inspection Register which is checked by the Superintendent. It should be
noted here that ward inspectors are not (formally trained) valuers. Only
superintendents and their deputies have received this training, which
means there are usually three to five trained valuers per ward. This limited number
has a significant impact on the quality of the assessment since a large
number of properties placed under the rent Control Act are not subject
to assessment every year. It is claimed that this administrative set up is
satisfactory with regard to assessment of properties and prevents major
cases of underassessnent. The Tax Department, however, recognizes that the
assessment of hutments presents difficulties and estimates that perhaps
half of the total number of hutments in Greater Bombay are not presently
assessed.
The collection of property taxes also proves to be a difficult
problem. The collection rate is quite high, especially in the
City with an average of 83.34% in 1971-72 (Table 60); but it remains quite
low, with rates of 54% and 49% respectively in the suburbs and extended suburbs.
In spite of this, it seems that on an average the Municipal Corporation performs
well when compared with the State of Maharashtra as a whole --where only about
* Table 60; Tax Assessed and Collected in Respect withthe Property Taxes for the City
(Rs 'coo)
Nature of Tax 1965-66 1966-67 1967-68 1968-69 1969-70 1970-71 1971-72
General TaxCollection 67,982 70,201 75,4h8 82,342 87,335 93,977 105,546Net Demand 85,699 87,247 92,953 99,015 105,009 111,968 123,521
% Collected 79.33 80.46 81.17 83.16 83.17 83.93 85.45
Water Tax on ValueCollection 6,325 6,597 6,992 7,327 7,543 7,805 '8,297Net Demand 8,33k 8,605 9,110 9,546 9,7h6 10,23 10,530
% Collected 75.89 76.66 76.75 76.75 77.39 76.26 78.79
Compounded Water TaxCollection 21 20 16 13 ' 15 16 15Nei Demand 27 23 19 19 18 18 18
% Collected 77.77 86.95 84.21 68.42 83.33 88.88 83.33
Halalkhore TaxCollection 9,089 9,416 10,153 10,773 11,668 12,496 13,67Net Demand 11,993 12,184 12,958 13,680 14,6h5 15,743 17,085
% Collected 75.79 73.48 ' 78.35 78.75 79.67 79.37 80.0
Special Halalkhore TaxCollection 694 761 801 81h 663 .646 753Net Demand 792 82k 828 844 945 987 973% Collected 87.63 92.35 1 96.74 96.45 70.16 65.45 77.39
Education CessCollection 6,237 6,2h8 6,839 7,36 8,040 8,516 9,502
. Net Demand 8,13 8,276 8,802 9,263 9,980 10,588 11,563% Collected 76.59 76.82 77.70 79.30 80.56 80.43 82.18
State Education CessCollection 4,793 5,219 6,181 7,604 8238 - 8,817 10,050Net Demand 6,515 6,742 8,079 9,471 10,144 10,823 11,985
% Collected 73.57 77.41 76.51 80.29 81.21 81.47 83.85
Additional State EducationCess
Collection - - 1,066Net Demand - - 2,881
4 Collected - - 37.00
TOTALCollection 95,142 98,572 106,430 116,220 123,503 132,273 148,822Net Demand 121,502 123,899 132,748 141,837 150,86 160,360 178,555
% Collected 78.30 79.55 80.17 81.93 82.06 82.48 83.3k
Source: Office of Assessor and Collector
-173-
56 percent of the net taxes are collected.1/ Methods used to recover
arrears are usually quite time-consuming from an administrative viewpoint
and achieve only limited results. After the service of the demand notice,
if taxes are not paid within 15 days, a "warrant of distress" can be executed.
However, when the goods of the defaulter are not worth the tax liability,
the properties are attached and auctioned. If the property is heavily
encumbered, no bidders come forward and the auction sale has to be post-
poned. In such an event, the last resort is to get a Court Receiver appointed
by the High Court.
Under some circumstances, the owner may bring an injundtion
and delay the process of recovery. An injunction can be even brought just
before the auction sale and some owners are granted repeated injunctions
by the courts. Every year hundreds of properties are attached in Bombay
and a large number of them are auctioned. For example, at the end of 1972, 1,032
properties valued at 15.03 million rupees were attached. 412 properties
were put on sale for an amount of 5.7 million Rs with the following results:
Number of AmountProperties (Rs '000)
Sales fixed for 1971-72 412 5,72LProperty in which full payment 73 627
is receivedProperties actually sold 22 340Properties on which injunctions 86 1,531
are receivedProperties in which installments 15 2,193
are grantedProperties in which there were no 74 1,259
bidders or bids offered were lessthan reserved bid
1/ Committee of Ministers' Report: "Augmentation of Financial Resources ofUrban Local Bodies".
1l74
There is a growing tendency to delay the payment of taxes by
filing appeals in Court against the rateable value, since Appeals can be
made without any prior deposit of tax arrears and because there are no rules
regarding the fixation of the rateable value except for one section in
the BMC Act. There is also no provision in the BMC Act for charging interest
on the arrears unlike the Maharashtra Municipalities Act of 1965. There is,
however, a provision of levying a 20% penalty. However, the penalty can only
be levied once on any given arrears.
The recovery of taxes fran the hutment dwellers is also a major
concern for the Tax Department. These hutments are unauthorized and are
either on Government or Municipal lands. The action of Idistress" is not
possible. Since the land belongs to the Government or to the Municipality,
the action of attachment and sale is also not feasible; there is no suitable law to
deal with this problem. The data in Table 61 indicate the tax arrears for
these holdings are equivalent on average to about three times the yearly
demand fran these properties. It may be of interest to note striking
differences in the ratio between arrears and the yearly denand among wards.
The reasons for this phenomenon are i,_'J clear but apparently, the rate of
collection is higher in the wards with a limited number of unauthorized
structures when they are located in the City. The picture is quite
erratic with respect to suburban wards--the inclusion of properties valued
between Rs200 and Rs500 calls for a cautious interpretation of the results since
our own inquiry concerning the assessment of hutments in the suburbs
clearly did not reveal rateable values of this magnitude. In spite of this,
the statistics presented in this table are of great interest since even when
properties valued up to Rs500 are included, the ratio between the amount of
-175-
Table 61: NET DEMAND OF PROPERTY TAXES AND TAX OUTSTANDING RELATEDTO UNAUTHORIZED HOLDINGS 1/
1 2 3 4 5Yearly Number ofDemand Bills Amount of'of such Outstanding Taxes Amount ofProperties in Respect Involved Taxes out-
Rs of such in Bills standingNumber (Properties Properties Shown in as a % of
of with R.V. up as of 2/ Col. 3 Yearly
Ward Properties to Rs 200/P.A. Oct.1,1971 Rs Demand
A 964 15,.443 651 60,101 389.17
B 106 2,744 49 751 27.36
C 352 10,548 213 3,435 32.56
D 599 20,820 497 8,946 42.96
E 869 26,350 1,186 20,514 77.85
F/S 6,500 138,061 55,184 669,492 484.92
F/N 3,277 170,625 22,132 228,649 134.00
G/S 6,724 138,965 52,357 491,313 353.55
G/N 5,197 131,025 34,594 394,172 300.83
City 24,588 554,579 174,863 1,877,374 338.52
Rateable Valueup to Rs 500
H 7,281 256,587 36,910 1,420,700 553.69
K 13,789 911,574 89,661 2,827,086 310.13
P 8,400 454,720 41,000 1,113,440 244.86
R 7,249 258,300 41,671: 1,160,478 449.27
L 5,060 395,474 24,942 987,214 249.62
M 9,800 577,000 20,000 347,000 60.13
N 3,967 326,343 24,749 878,912 269.32
T 5,417 291,135 34,489 1,379,560 473,85
Suburbs 60,963 3,471,133 313,422 10,114,390 291.38
Greater Bombay 85,551 4,025,712 488,285 11,991,763 297.87
Source: Note prepared by the Assessor and Collector1/ The year of reference is not mentioned in the note but it is most likely
to refer to the year 1969 or 19702/ Include bills up to March 31, 1970
-176-
taxes outstanding, as a percentage of the yearly demand of these properties,
is on average very high, and about only 40 percent lower than the ratio
for hutments located in the City. In sumary, the Municipal Authorities
face substantial problems in the collection of property taxes on holdings
valued under Rs 200 and up to Rs 500. The Tax authorities are rather
reluctant to undertake large tax collection drives among hutment dwellers
because the cost of collection for low valued hutments is estimated to be
very high when compared with the tax proceeds. The cost of-collection is
presently estimated at Rs 8.5 per hutment. Moreover, the rateable value of these
properties is a very small proportion of the total rateable vale--amounting
to less than 2 percent,1/ while net demand represents about 2.25 percent
of the total yearly demand of property taxes.
The Tax Departmnt is also facing difficulties with regard to the National
Government and other public semi- autoiomous agencies (Table 62). Taxes due
from the State Government.are usually paid on,time. A major problem faced
by the Tax Department concerns the collection of taxes fran the Railway
Authorities, since the assessment of these properties has not yet been
completely settled and the railways had been paying, until recently, a very
low proportion of their taxes. This problem, however, is expected to be
solved soon.
As a result of all these factors, important arrears on the propertd-es
have built up. The data in Table 63 indicate the high percentage of outstanding
net tax demand. However, it is estimated that about 30 percent of the tax
1/ On the basis of total rateable valie in the year 1969-70.
- 177 -
Table 62: TAXES ASSESSED AND TAXES COLLECTED IN RESPECT OF GOVERME1T,RALIWAYS, ADD BOMBAY PORT TRUST PROPERTIES
Property tax Property tax Percent
Year - assessed (Rs) collected (Rs) Collected (%)
1964/65 Government 5,413,101 3,940,324 72.8
Railways 2,356,082 1,121,801 47.6
B.P.T. 6,085,927 5,549,851 91.2
13,855,110 10,611,976 76.6
1965/66 Government 4,963,382 4,093,433 82.5
Railways 2,324,926 1,111,220 47.8
B.P.T. 6,4o5,572 5,912,811 92.3
13,693,880 11,117,465 81.2
1966/67 Govemnent 4,839,991 3,059,809 63.2
Railways 2,166,601 967,034 44.6
B.P.T. 6,835,314 6,423,399 94.0
13,841,906 10,450,242 75.5
1967/68 Government 4,978,019 4,196,915 84.3
Railways 2,158,608 1,249,073 57.9
B.P.T. 6,380,878 5,786,219 90.7
13,517,504 11,229,207 83.1
1968/69 Government 5,706,531 5,047,454 88.5Railways 2,860,843 1,627,494 56.9
B.P.T. 5,944,407 5,823,128 98.0
14,511,780 12,498,075 86.1
1969/70 Government 6,573,047 4,593,322 69.9
Railways 2,224,232 745,780 33.5
B.P.T. 6,188,823 5,994,056 96.9
14,986,102 11,333,158 75.6
1970/71 Government 5,176,624 4,327,592 83.6
Railways 1,467,445 1,168,451 79.6B.P.T. 6,350,664 6,252,886 98.5
12,994,734 11,748,930 30.4
1971/72 Government 7,620,796 6,037,002 79.2
Railways 1,506,326 1,156,042 76.8B.P.T. 6,009,300 5,397,951 89.8
15,136,422 12,590995 83.2
SoIrce: Office of Assessor and Collector
-178- -
Table 63: OUTSTANDIN OF MUNICIPAL PRCPERTI.TAXES IN 1971-1972
Rurees -. ,.of- Ne-t-Demand
City 47,031,002 21.65
Suburbs 58,600,815 47,32 -
Extended Suburbs 27,39,070 51.95
Greater Bombay 133,070,887 33.78
Source: AduinistfatFe Repor 1971 -72
outstanding at the end of the fiscal year are recovered by the beginning
of the subsequent period. This is because the property tax bills are
issued in advance and the tendency of the taxpayers is to pay their taxes
after receipt of rents from the properties. .
Taxes remain outstanding for many reasons.. On the basis of
the year 1971-72, the major causes of tax arrears were tax involved suits,
injunctions and appeals against values, disputes in rateable values, tax
properties under attachment, tax on unauthorized structures, and disputed
taxes (See Table 64). This table also indicates that arrears, especially
in the category defined as "rate payersn are significantly higher in the
suburban areas than in Bombay City.
Tabl e 64 BREAK-UP OF ARREARS OF ALL TAXES AS OF AMIL 1, 1972
City Suburbs Extended Suburbs Greater RmbayEffective Provision- Effective Provision- Effective Provision- Effective Provisicn-( amerud Mp- Demmid at Demand Demand a Demand Demand Ll D'Mah.d T otAl
of Evacuee Propertles-, 2,547 - 2,091 - 70h - 5,3112 - 5,342(2) ailwaysl/ - 467 - leo - 1 - 568 568
(3) Bor.bay Port Trust 561 - - - - - 561 - 561(11) EMC (Improvement) and Other
Municipal Departments 4,186 - 1,310 - 329 - 5,825 - 5,e25(5) Court ReDiver, Official
Assignee - 2,509 - 843 - 721 - h,073 4,073(6) Suits Filed, Injunctions and
ApPeals Against Rateable Values5 - 9,500 - 7,207 - 2,1141 - 18,848 13,848(7) Property Under Attachments 14,094 - 9,561 - 3,738 - 17,393 - 17,393(8) CompLaints Aedant
Rateable Valueg - 5,921, - 5,317 - 1,765 - 13,006 13,006(9) Amounts Involved in Respect
of Unauthorized Structures 1,869 - 6,875 - 3,822 - 12,566 - 12,566(10) A:ounts Due from BEST Undertaking 189 - 917 - 11 - 1,117 - 1,117(11) Insallment Allowed 507 - 1,213 . - 313 - 2,063 2,063(12) Disputed Property Taxes 2,007 - 7,398 - 1,907 11,312 11,312(13) Bills Issued at the Tag
End of the Year - 7,088 - 6,272 3,777 17,137 17,137(11) Monthly Tenancy Structures 488 - 2,067 I - 1,738 - 4,273 1,273(15) Other P!te PLyers 17,224 - 27,615 13,105 - 57,974 57,974
Total 31,665 27,495 51,679 27,137 23,770 10,312 107,11; 64,94hb 172,055
Footnotes:If Include municipal property taxes, state education cess, additional state education cess,urban immoveable property taxes and water charges by meter movement.
2/ Payment not received from various government departments; the Dy Custodian of evacueeproperties pays when funds are available.
3/ Assessment of railway properties for the quinquenniums 195h-59, 1959-64 and 1964-69 issLill pending with the Railuay authorities.
3/ Payments are made when funds are available.
5/ Matters pending before the court.
6/ Payments can be demanded only after disposal of complaints against rateable values.
Source; Adminietration Report of the Municipal. Commissioner for Greater Banbayfir the year 1971-72.
- 180 -
- VII. INTERGOVERNMENTAL GRANTS
A. Historical Importance
Grants are a minor source of revenues for the Municipal Corporation.
In 1972-73, they accounted for little more than 1 percent of the total revenues
and time series data in Table 146 show that the historical roleplayed by
aid is equally insignificant. Even at peak importance in the early 1960s,
the relative share of grants in total revenues was only about 2.5 percent.
There are two major exceptions to this overall trend--a large one-time increase
in grants in 1964-65 and again in 1969-70 designed to compensate for increases
in local authority employee emoluments. Allocation was on an ad hoc basis.
For fiscal planning purposes, these periods may be regarded as windfalls and
not part of the established financial assistance program of the Goverment
to the Corporation. Other indicators presented in Table 65 confirm the
negligible role of external aid. On a per capita basis, the financial aid
amounted to only Rs 1.00 in'1972-73 versus Rs 1.86 in 1960; this trend was
exacerbated by the price increases during the period, with grants per capita
in constant prices being about Rs.0.92 in 1972-73.
B. Forms of Intergovernmental Assistance
The grant system is characterized by programs designed to finance
current expenditures. Indeed, current grants account for 88 percent of
total grants received by the Corporation since 1961 and for about 95 percent
in more recent years. This clearly indicates that the financing of capital
expenditures is almost entirely supported by the Corporation through its
own revenues or borrowing. The data in Table 66 show that all capital grants
are allocabed to the Slum Clearance Program. The largest proportion of this
Table 65: TOTAL GRANTS ALLOCATED TO THE BCMBAY MUNICIPAL CORPORATION 1/ AND GRANTS ON A PER CAPITA BASIS
PerPercent Per Total Capita
of Total Capita Current CurrentPercent Percent Revenues Grants Grant Grants GrantsState of Percent Other Per at at at at
Total Gov't. Current of than Capita Constant Constant Constant ConstantGrants Grant Grants Revenues BEST Grant Prices Price Prices Price(Rs '000) % % % %____ (Ra) (Rs Iooo)V (Rs) (Ps o000)- (Rs)-
1960-61 7,9- 81.h4 2.37 3.87 1.86 7,h9 1.86 6,067 1.52
1961-62 8,272 81.95 75.93 2.43 3.92 1.99 7,804 1.87 5,925 1.43
1962-63 9,672 72.94 63.91 2.52 4.00 2.25 8,636 2.00 5,520 1.28
1963-64 8,707 86.17 81.56 2.05 3.3h 1.95 7,317 1.73 5,968 1.34
1964-65 14,313 63.80 90.04 3.15 5.11 3.09 11,360 2.45 10,229 2.21
1965-66 7,661 94.25 91.03 1.46 2.24 1.60 5,76o 1.20 5,244 1.09
1966-67 9,893 87.97 83.95 1.63 2.45 1.99 6,918 1.39 5,806 1.17
1967-68 11,632 93.10 90.86 1.81 2.82 2.25 7,362 1.h2 6,689 1.30
1968-69 11,480 95.95 94.61 1.57 2,0 2.14 6,916 1.28 6,543 1.22
1969-70 12,035 90.12 99.03 1.55 2.40 2.17 6,957 1.25 6,890 1.24
1970-71 11,486 100.00 96.47 1.32 2.05 1.99 6,381 1.10 6,156 1.07
1971-72 11,036 100.00 100.00 1.15 2.05 1.99 6,381 1.10 6,156 1.07
1972-732/ 12,368 91.00 91.00 1.12 1.66 2.00 6,2h6 1.01 5,685 0.92
1/ Based on all 4 budgetary accounts.
2/ Based on CPI for working class.
Source: BMC Budget Estimates
Table 66: GOVERNMENT GRANTS TO BMC(Rs '000) Slum
Clear- Capitalance Grants
Primary Secondary Improve- Total State Central TotalEduca- Educa- ment Current Govern- Govern- Capital Total
tion tion Schemes Others Grants ment ment Grants Grants
1960-61 5,312 - 511 244 6,067 1,382 1,384 7,449
1961-62 4,827 - 513 941 6,281 498 1,493 1,991 8,272
1962-63 5,314 - - 868 6,182 873 2,618 3,491 9,673
1963-64 6,260 - - 842 7,102 401 1,204 1,605 8,707
1964-65 6,8101 - 1,000 5,078 12,888 356 1,069 1,425 14,313
1965-66 6,257 - - 717 6,974 247 440 687 7,661
1966-67 6,300 - 1,000 1,006 8,306 397 1,190 1,587 9,893
1967-68 8,082 802 348 1,337 lO,569 261 802 1,063 11,632
1968-69 7,186 1,890 961 825 10,862 154 464 618 11,480
1969-70 7,361 3,002 39 1,5172 11,919 29 87 116 12,035
1970-71 7,195 2,521 - 1,365 11,081 405 - 4O 11,486
1971-72 7,892 2,105 - 1,039 11,036 - - - 11,036
1972-73 7,890 1,900 - 1,466 11,256 - 1,112 1,112 12,368
86,686 12,220 1 20,523
Including Central Government grant for increase
in emoluments: 1/ Rs 549,000
S/ B,112,121e s e, / 1.1101.,003
Source: BMC Budget Estimates
- 183 -
grant is Central Government funds and allocations have been irregular
in recent years. The bulk of current grants area allocated to the educa-
tion sector, which had an average share of 82 percent of all current
grants over the 1960-1972 period. Among educational grants, aid to primary
schools is of significant importance since it amounted, on the average, to
nearly 72 percent of all current aid dispensed over this period. Other
grants are a grant allocated to Budget B of the Corporation, mainly slum
improvement's activities, and various grants of lesser importance.
These grants all tend to be subject to significant annual varia-
tions which are not always justified by the nature of the grant. With the
exception of the Improvement Schemes' grant, all grants are based "in theory"
on municipal expenditures which are reasonably expected to increase every
year. The Slum Improvement grant is a deficit grant and may therefore be
expected to vary from year to year. On the other hand, Primary and Second-
ary Education grants are supposed to bear a relationship with the needs of
the educational system which has continuously expanded over the period
under consideration. In spite of this, the amount of the grant allocated
to the municipal primary schools, after reaching a peak in 1,967-68, tended
to first decrease and then to level off. A similar pattern characterizes
the grant provided to support secondary schools, which have expanded at a
very fast rate during recent years. Finally, the category of grants called
"Others" is a miscellaneous one and its components are subject to serious
qualifications which do not, however, alter the previous general remarks on
the grant system. The major grants included here are as follows: grant in
aid in respect of fines for offenses against the law, grant in aid for the
administration of Shops and Establishment Act, and grant in aid from
Central Government on account of additional expenditures due to increase
in emoluments for the employees of the Corporation. As explained above,
this last grant is made on an ad hoc basis. The basis of allocation for
the first two categories is, unfortunately, not known. They are usually
paid on a regular basis to the Corporation, but again their absolute amounts
vary greatly from year to year. Two minor items are also included here, grant
in aid of the fees for land conveyance and licenses, and grant in aid in
respect to excise duty for spirits. The basis of allocation of these grants
is not known, but their amount tends to level off every year and is not
significant. The irregularity of the financial assistance system could be
easily remedied in the area of education, which represents the bulk of external
aid.
In addition to these relatively small formal flows from the State
to the BMC, there is a less formal, but fiscally more important, relationship
in the area of financing water supply. The state's program of multi-purpose
river development provides storage capacity for the EMC. While in principle
the BMC is responsible for total construction and operating costs associated
with water supply, this storage provision is nevertheless a form of state
assistance. Another example of this type can be found in the administration
of hospitals and the financing of national highways within Greater Bombay.
In the latter case, expenditures are divided equally between the BKC and the
State Government. Most of the.hospitals are under municipal supervision; however,
some are still administered by the State and most of their expenditures are
supported by this level of government.
185
C. trastae Aie d Dist-ibution
Unfortunately, it is not possible to compare here the grant system
applying t- Bombay Municipal Corporation with that of the three other
municipal corporations of the State of Maharashtra. It is, however, believed
to be quite similar as a result of their legal foundations (see Table 67).
A brief description on the grant system of financial assistance by governent
to municipal councils was provided by State Government authorities. The.223
municipal councils presently in existence in the State represent approximately
15 percent of the state population. Municipal
councils rely more heavily on external aid than the Corporations, while rEmaining
far less dependent on.goverrnment funds than the rest of local authorities.
The grant system applying to the councils is described in Appendix 1 to this
chapter. There are several types of grants. Capital grants are provided for
water supply and road construction schemes and for implementing development
plans. Another category of grants is allocated to the construction of dispensary
buildings and for the purchase of equipment. The current year budget allocates
to the first three categories of grants amounts equaling 22.5 million Rupees,
which are allocated as follows: 19.675 million rupees to water supply schemes;
1.736 million rupees for implementation of devalopment plans, and 1 million
rupees for special road grants (excluding capital grants for normal road
grants scheme).
Current grants are designed largely to finance expenditures required
in public health. These are: 1) a grant in aid to Municipal dispensaries,
2) a pay and allowance grant for the health staff of the Councils, 3) a grant
for control cf epidemics, and 4) a grant for the National Malaria Eradication
Program. Another grant is designed to finance a certain proportion of expenditures
Table 67: .REVENUE STRUCTURE OF THE MUNICIPAL CORPORATIONS.OF THE
STATE OF MAHARASHTRA 1/1967-1968 (Rs'000)
Bombay Poona Nagpur ShalpurMunicipal Municipal Muiicipal Municipal All
Corporation Corporation Corporation Corporation Corporations
IMunicipal Rates and Taxes.
Octroi 97,575 23.1 17,017 42.13 11,859 42.72 6,758 40.73 133,209 26.65
-- Taxes on Houses and Lands 130,123 31.35 9,192 22.76 2,987 10.76 2,789 16.81 145,091 29.03
-- Other Taxes and Duties 120,088 28.93 3,631 8.99 7,617 27.44 1,672 10.08 133,008 26.61
Subtotal 347,786 83.79 29,840 73.88 22,h63 80.91 11,219 67.61 411,308 82.29
II. Other Resources
-- Fees from EducationalInstitutions 2,253 0.54 - - - - - - 2,253 0.45
Receipts from Markets
and Slaughterhouses 8,792 2.12 93 0.23 865 3.12 177 107 9,927 1.99,
-- Miscellaneous 45,744 11.02 7,212 17.86 2,415 8.70 3,755 22.63 59,126 11.83
Subtotal - Total Self-Raised Revenues W04,575 97.47 37,145 91.97 25,743 92.73 15,151 91.30 482,614 96.56
-- Government Grants 10,509 2.53 3,245 8.03 2,019 7.27 1,1443 8.70 17,216 3.44
Total Revenues 415,084 100.00 40,390 100.00 27,762 100.00 16,994 100.00 499,830 100.00
Source: Statistical Abstract of Maharashtra State 1969-70. .
1/ Excludes income from extraordinary receipts and debt.
on the payment of dearness allowances. The last two categories are to
compensate the Councils for a loss in revenue due to abolition of the
Entertaiment Tax and the Bombay Motor Vehicles Tax. The relative importance
of these grants cannot be presented here since no data is directly availablefra the State Government budget. On an aggregate basis, grants amounted toalmost 68 million Rs in 1971-72 and a rough estimabion shows that the grantper capita was between 9 and 10 Rs in 1971-72.1
No information was collected regarding the financial assistance
system applied to other local authorities in the State of Maharashtra. On
the basis of information provided by the Finance Department of the State
2/Government to the Fifth Finance Commission,- six major types of grants are
allocated to the Zilla Parishads. The category of statutory grants include
70 percent of the land revenues collected in the district (the rest being
assigned to the Village Panchayats), water rates levied on behalf of the ZillaParishads, and a stamp duty. The major types of grants allocated to the
Village Panchayats are described in Appendix 2 to this chapter. Both
types of local authorities rely heavily on external aid. The aggregate aid
estimates amounted to 1,071.3 million rupees in 1971-72 and a rough estimate
indicates that the confirmed grant per capita was equal to about Rs 30. Thedata in Table 68 below sunimarizes the major findings of these ccmparaive
sections. The grant per capita allocated to the local authorities variedfrom a minimum of Rs 1.85 in the case of the BMC to about Rs 30 in the case of
1/ The basis of a population estimate of about 7 million.
2/ Government of Maharashtra, Finance Department, "Information on SubsidiaryPoints Submitted to the Fifth Finance Commission."
- 188 -
Zilla Parishads and Village Panchayats, which entail almost the entire
non-municipal population and most of the villages in the State of Maharashtra.
Other municipal corporations receive nearly three times as much government
aid as the BMC. Additional research would, however, be required to understand
snd evaluate the reasons of such differential treatment of the financial
assistance system among local authorities, and more specifically among the
four municipal corporations.
Table 68: GOVERNMENT GRANTS PER CAPITA BY CATEGORYOF LOCAL AUTHORITIES AND PERCENTAGE DIS-
TRIBUTION OF GOVERNMENT GRANTS 1/
Grant Percent of Total GrantPer Capita Accounted for by
( Rs )(1971-72) 1971-72 1967-68
Bombay Municipal Corporation 1.85 .94 1.18
Municipal Corporations (incl. BMC) 2.79 1.94 1.75
Municipal Corporations (excl. BMC) 5.43 .99 .56
Municipal Councils 10 1/ 5.86 h.3
Zilla Parishads and Village Panchayats 30.1/ 92.19 93.80
Total Maharahstra 23.o 100.00 100.00
1/ Based on rough population estimates.
Source: Same as Table 67.
.. .. .. .
- 189
APPEND I
GOVEMET FINANCIAL ASSISTANCE TO MUNICIPAL COUNCILS IN THE STATE OF
MAHARASHTRA
A. Current Grants
1. Dearness Allowance Grant (DA grant):
Municipal Councils Rate rofrnt _
A Class 80 percent of the expenditure incurred inpayment of DA at the revised rate
B Class 85 percent of the expenditure incurred inpayment of DA at the revised rate
C Class 90 percent of the expenditure incurred inpayment of DA at the revised rate
The Municipal Councils, which have adopted the pay scales recommended
by the Badkas Pay Commission, are receiving the DA grants at the above rates.
Other councils, which have not adopted the pay scales recommended by this
Commission, are paid DA grants at the rate of 50 percent of the expenditure
incurred on payment of DA at non-revised rates to their employees.
2. Grant in Aid to Municipal Dispensaries:
Municipal Councils are required to pay a fixed contribution to the
state goverment on account of the services rendered by State Medical Officers
employed in municipal dispensaries. However, these contributions are refunded
in grant-in-adi if the expenditure incurred by the councils on medical relief
is more than 4 percent of their income. Financial assistance is also pro-;
vided to maternity houses attached to municipal hospitals to the extent of
one-fourth of their approved expenditure or actual deficit, whichever is less.
These types of grants are applicable to all the councils of Western Maharashtra.
- 190 -
In addition, sane dispensaries in Vidarbha receive a fixed annual grant of
Rs 500 for medicines. This is due to the fac,t that in the old ME State
they were getting free medicine from the Government Medical Stores Depot in
Nagpur, which was closed after the Reorganization of States.
3. Pay and Allowance Grant for the Health Staff of the Councils:
A grant equal to one-third of the expenditure incurred by the
Councils in the pay and allowance of their health staff is being paid by the
Government.
4. Grants for Center of Epidemics:
A grant equal to 50 percent of the expenditures which are above
the normal expenditures on health, and are incurred by the councils, is being
paid to the Councils. In addition, 50 percent of the expenditure incurred
by the councils in excess of the 1957-58 expenditure level are goverment
supported with regard to the National Malaria Eradication Program.
5. Land Revenue and Non-Agricultural Assessment Grant:
A grant equal to 75 percent of non-agricultural assessment and
15 percent of land revenue, excluding non-agricultural assessment realized
within the area of the Councils, is being paid to the Councils. Actual
grant amounts are based on revenue collection in the previous year.
6. Compensation in Lieu of Entertainment Tax:
Some of the municipal councils in the Marathwada Region were levying
Entertainment Tax prior to the enforcement of the Bombay Entertainment Duty
(Extension and Amendment) Act of 1958. Subsequently, the government passed
legislation stating that these councils were not allowed to recover this tax.
- 191 -
However, in order to compensate this loss in revenue, the government pays
compensation in lieu of the tax. It.,is paid on the basis of net average
annual income frm the tax during the three-year period ending March 31, 1958.
7. Compensation in Lieu of Boundary Motor Vehicles Tax:
Some of the councils were levying a toll tax on motor vehicles
prior to the enforcement of the Bombay Motor Vehlacefs Tax Act of 1935, which
abolished this tax. The govement now pays compensation in lieu of this tax
on the basis of annual income of the Council. from the toll tax minus the cost
of collection plus 10 percent for the three-year period ending March 31, 1936.
B. Capital Grants
1. Water Supply Scheme:
Municipal Government Loan fromMunicipal Council Grant- CICCouncils Contribution in-Aid of India
A Class 10% 23-1/3% 66-2/3%
B Class 10% 40% 50%
C Class Nil 50% 50%
When a water supply scheme is taken over by the Goverment as Government
Scheme, the entire expen~diture on construction of that scheme is borne by the
Government.
2. Grant for IDplementing Development Plans of Municipal Councils:
Municipal Councils Loan Grant-in-Aid
A Class 66-2/3% 33-1/3%
B Class 50% 50%
C Class 50% 50%
- 192 -
Note: Financial assistance under this scheme is available for
approved development plans of municipal councils. However, plans still to
be approved are also considered if the plans are published in accordance with
the Maharashtra Regional and Town Planning Act of 1966.
3. Special Road Grant Schemes:
Under this scheme, financial assistance is given in the fo=n of
grants only to councils which undertake the construction of new roads or
extensive repairs (other than normal routine repairs) to existing roads. The
grant is generally equal to 50 percent of the estimated cost of the works,
subject to a municipal tontribution to the rest of the works. In addition to
these grants, financial assistance is also provided to the municipal councils
for routine types of works under the "normal road grant schemely. Under this
scheme, the gra.nt is restricted to 50 percent of the expenditure incurred by
the councils during a year.
4. Grants for Dispensaries:
Non-recurring grants are also paid to the councils of Western
Maharashtra for construction of dispensary buildings and 2or purchase of
equipment. Building grants are equal to one-third of the estimated cost of the
construction as certified by the Executive Engineer of the District. Grants
for equipment are given on merits of each case. Generally, the allocation of
these grants is subject to availability of funds.
-193 -
APPENDIX 2
GOVERNMENT FINANCIAL ASSISTANCE TO THE ZILLA PARISHADS AND THE VILLAGE PANCIYATS
Zilla Parishads
1. Land Revenue Equalization Grant: This grant is allocated so that,
together with the revenue from land assigned to the Zilla Parishads, the total
revenue per capita based on the latest available census figures from these
two sources amount to Rs 2.00. Land revenue and the land equalization grant
together constitute the-basis revenues of the Zilla Parishads. Seventy
percent of the land revenue collected in the district is assigned to the
Zilla Parishads.
2. A Purponsive Grant: Some of the schemes which are considered
important from the pont of view of State policy, entail large outlay,
or require particular watching are classified as "purponsive schemes."
The expenditure on these schemes is met by the Government to the extent of
90 percent at the present time, with a minimum of 75 percent being prescribed
under the Act.
3. Establishment Grant: At present, the Zilla Parishads are paid
grants equal to 75 percent of the expenditure incurred by them on establishment
which is not attached to any scheme. Under the recent amendment of the Act,
the Zilla Parishads are entitled to establishment grants equaling 8 percent
of their total expenditures.
4. Deficit Adjustment Grants: The gap in the overall expenditure of
the zilla Parishads resulting from the functions transferred to them, after
taking into account the payment of land revenue, land Revenue Equalization,
Pruponsive and Establishment grants, and certain liabilities arising out
of the obligation accepted under the Act, is covered by a deficit grant which
is provided for a specific period. This grant is to be reduced after the
194 -
first five fiscal year so that by the ned of the tenth year, this
souce of grants to the Zilla Parishads will be eliminated. As a point
of interest, no reduction of this grant is yet envisaged because of insufficiently
elastic tax revenues for these local authorities or growing expenditures on
plan schemes.
5. Local Cess Matcbing Grant: This grant is not related to any scheme
transferred to the Zilla Farishads, but is provided as an incentive to these
local authorities to raise local cess on land revenue above the legal minimum
of 20 paise per rupee of the land revenue. This grant is equal to about
90 percent of the additional cess collected in the district. In addition,
a small amount of grants is disbursed to the Zilla Parishads according to
the extent of development activities undertaken by the Zilla Parishads,
and to encourage speedier execution of the schemes. Both types of grants
are outside the financial arrangement contemplated in the case of
transferred schemes. These local bodies are utilizing the grants for
maintenance of specific earmarked shcemes taken up by the Zilla Parishads
outside the State Plan. The revenues from additional cess above 20 paise
and these grants, as well as the corresponding expenditures, are not taken
into account while determining the deficit adjustment grants. The forecast
of local cess matching grant is made on the basis of anticipated increases
in the local cess by the Zilla Parishads.
6. Plan Grants: In regard to the expenditure on schemes included in
the State Plan, the Government is giving 100 percent grants to the Zilla
Parishads for meeting tthe Plan Expenditure. At the end of the plan period,
the canmitted expenditure arising out of these development activities devolves
on the Zilla Parishads for which purponsive and deficit adjustment grants,
as the case may be, are given as stated above. Some of the activities
- 195 -
undertaken out-of the Plan grant, such as minor irrigation, road works, and
buildings, are classifiable as capital expenditures on the Zilla Parishads.
However, no grants are given to the Zilla Parishads for meeting expenditure
of this nature outside the State Plan.
Grants to the Village Panchayats:
Grants specifically allocated to the Village Panchayats consist
mainly of a land revenue equalization grant so that given the basic land
revenue (also allocated by the Government) the total revenue of any Village
Panchayat from these sources amounts to Rs 1.00 per capita. Village Panchayat
in backward areas are given additional grants.
- 196 -
VIII. EDUCATION FINANCE
A. Introduction
The Corporation is involved in primary, secondary and medical
education, with primary education a statutory duty and representing by
far the most important responsibility. Secondary and medical education
are primarily State and Central government functions but the Corporation
entered these fields in response to what it considered to be increasingly
unfulfilled needs. The BMC contribution to education finance above the
primary level is limited, particularly with respect to medical education.
Its involvement in the area of secondary education is recent and is'increasing
rapidly. Total expenditures on secondary and medical education in 1971-72
accounted for only about 11 percent of total expenditures on education.
B. Primary Education
1. Services Provided
Under the provisions of the City of Bombay Primary Education Act
of 1920, education is free and compulsory for children of the 6-11 age
group. Free education services were first provided in 1925 in wards F and
G of the City and were extended to the rest of the City by 1940. At present,
free and compulsory education is in force in all areas of Greater Bombay.
It is estimated that about 96 percent of the children in the 6-11 age group
are enrolled in schools, in spite of the fact that no coercive measures are
taken to enforce school attendance. About 66 percent of the children attending
school are enrolled in the schools operated by the Corporation. Despite a
- 197 -
declining enrollment trend, the role of the private primary system remains
substantial. Private schools are usually run by charitable institutions
though most are supervised by the BMD Education Department and some even
receive financial assistance from the City.
In mare recent years, the municipal system of free education has
been extended to children in the 11-14 age group. It is referred to usually
as nupper primary" education and corresponds to standards V to VII in the
level of education. The student enrollment in these classes represents about 28
percent of the total student attendance in Bombay primary schools (see Table69).
The "upper primary" classes are usually attached to the primary school
system. Since 1970, however, an increasing number of classes have been
attached to the secondary schools operated by the .Corporation. This change,
which was encouraged by the State Government, is designed to have these
classes benefit from the State Governmeht grant-in-aid system which applies
to secondary schools.
The student population has increased at an average rate of 4.3 percent
per year over the 1960-61/1971-72 period, an average annual increase of about
18,000 students. Such an increase requires continual adjustments in the number
of cl&sses and staff. The number of school building/class facilities over
the 1956-71 period has not increased proportionally to the nurber of children.
Thus, the limited number of classes has led to the introduction of double
sessions. The buildings are used in two sessions from 7:30 a.m. to 1:00 p.m.
and from 1:00 p.m. to 5:45 p.m. with different teachers teaching the two
sessions. The number of students per classroom is set by the BE at
Table 69c PRimARY EDUCATION - BOMBAY MUNICIPAL CORPORAION
1956-57 1957-58 1958-59 1959-60 1960-61 1961-62 1962-63 1963-64 1964-65 1965-66 1966-67 1967-68 1968-69 1969-70 1970-71 1971-72
1. Municipal System of Education
Number of Municipal Schools 714 759 829 872 901 909 934 934 956
Nu:.ber of Classes 147 133 117 118 111 110 119 114 105
Total 605 618 649 679 696 741 819 861 892 946 990 1,012 1,038 1,03 1,048 1,051
Number of Students 243,522 275,984 294,632 316,105 333.066 349,454 376,109 409,460 434,535 450,114 474,468 481,211 491,332 495,286 503,047 528,802
-- Grades I to IV 187,442 211,836 224,780 237,873 251,130 261,686 280,454 302,452 315,905 326,066 341,037 340,183 343,154 344,972 357,527 379,517
-- Grades V, Vi, VII 56,080 64,148 69,852 78,232 81,9,36 87,768 95,655 107,008 118,630 124,048 133,431 141,028 148,178 150,314 145,520 149,285
iuaber of Trained Teachers 10,193 11,032 11,765 13,045 13,492 13.599 13,865 '14,305 14,817
Nu-er of Untrained Teachers . 697 655 503 446 401 401 281 217 172
Total Number of Teachers 6,603 7,316 8,001 8,503 8,403 9,127 10,204 10,890 11,687 12,268 13,491 13,893 13,900 14,146 14,525 1,S9
I1. Frivate System of Education
Nulber of Recojnized Schools 1, 293 331 387 371 372 381 -91
Th:rber of Students in R.S. 88,083 103,629 120,536 120,376 124,513 126,957 127,337
(Grades I to IV)
WN=ber of Aided Schools 215 254 223 170 181 291 207 218
mber of Students in A.S. 55,112 65,411 55,787 43.518 52,998 59,146 61,633 67,893
(Grades I to IV)
Nucher of Teachers in A.S. 1,846 2,158 1,885 1,421 , 1,664 1,761 1,856 1, 0
-- Trained 1,076 1,293 1,087 89B 1,186 1,324 1,350
-- Untrained Teachers 770 865 798 523 478 437 506
Total Number of Private Schools 391 390 410 412 450 470 484 809 522 547 554 557 562 573 588 609
Total Number of Students in 94,205 99,142 107,799 112,675 121,023 128,503 140,972 141,927 156,244 153,434 159,416 164,054 173,374 183,659 188,590 '195,233
Private Schools (Grades I to IV)
Total Nur.ber of Schools 996 1,028 1,059 1,091 1,146 1,211 1,303 1.370 1,414 1,494 1,544 . 1,570 1,577 1,611 1,636 1,670
Total Number of Students 337,727 375,126 402,431 428,780 454,089 477,957 817,081 551,387 580,779 603,608 633,884 645,265 664, 706 678,945 691,637 724,032
S:-rce: AdMinistration Reports of BMClnfor-mation Provided by BMC
- 199 -
a maximum of 50. Almost 25 percent of the municipal schools are located in
rented premises which were built for residential purposes and which are
without adequate light, ventilation,and sanitary facilities. The number of
municipal owned buildings (permanent construction) is now 218 as compared to
100 in 1956-57. The average size of a classroom in municipal owned school
buildings is about 400 square fee. Approximately 6 to 8 feet space is allot-
ted to each child. In rented buildings, this formula cannot be implemented.
However, the Corporation is making vigorous efforts to overcome the shortage
of adequate accommodation as can be seen in the increase in debt charges from
425,180 Rs. in 1956 to nearly 8.6 million Rs. in 1970-71.
The quality of education offerred is always difficult to assess. A
number of general observations may be made, Increasing efforts have been
directed toward teachers' training; and the student/trained teachers ratio
dropped from about h0 in 1964 to 36 in 1971. Furthermore, public schools
compare favorably with private schools as regards student/teachers and stu-
dent/trained teach ratios (see Table 70).
Nearly 99 percent of the municipal school teachers are trained
teachers. Two training institutes run by the BMC conduct courses for
untrained teachers. With a view to attracting competent teachers, the
Table 70: SELECTED STATISTICS ON PRIMARY EDUCATION - BMN 1
Teacher/Student Teacher/Student
Percent % Grade up to IV Teacher/Student Ratio in Muni- Ratio in Teacher/Student
Students in to Total Students Ratio cipal Schools Private Schools Ratio in Aided
Municipal Schools (Municipal in Municipal based on (Aided Schools) Schools
Grades I to IV Schools) Schools Trained Teachers (Total Schools) (Trained Teachers)
1956-57 55.5o 75.97 36.88
1957-58 56.47 76.76 37.72
1956-59 55.86 76.29 36.82
1959-6o 55.48 75.25 37.18
1960-61 55.30 75.40 39.64
1961-61 . 74.88 38.29
1962-63 5h.24 74.57 36.86
1963-64 5h.85 73.87 37.60 40.17
1964-65 54.39 72.70 37.18 39.39 29.8 51.22
1965-66 54.02 72.44 36.69 38.26 30.31 50.59
1966-67 53.80 71.88 35.17 36.37 29.59 51.32
1967-68 52.75 70.69 34.6h 35.67 30.62 48.46
1968-69 51.62 69.84 35.35 36.13 31.85 44.69
1969-70 50.81 69.65 35.01 35.72 33.59 44.67
1970-71 51.69 71.07 34.63 34.99 33.21 45.65
1971-72 52.42 71.77 35.28 35.69 36.11
1/ Based Dn Table 69
201 -
Corporation has a fixed pay scale which compares favorably with teacherssalaries in other states or with comparable private sector occupations.
In order to keep the teachers abreast of the new trends in education, in-service training departments have been set up since 1961. A special
feature of in-service training facilities is the Teaching Aid Center whereteachers are trained to prepare aids necessary for the instructional program.The Teaching Aid Center is now functioning as a nucleus around which aScience Summer Institute is developing. This Institute, subsidized withRs 325,000 from the National Council for Science Education organizes work-shops in leadership training in new mathematics and science for primary andsecondary teachers. On completion of training, some of the teachers willsupervise mathematics and science education in an few selected schools whichwill be used as demonstration centers in the follow-up of the swmmerinstitute. Finally, the Corporation operates three libraries which lend booksto teachers on educational techniques.
Finally, the Department of Education operates a research unit tostudy ways and means for improving the quality and effectiveness of instructionin arithmetic and composition and to publish pamphlets for the guidance ofteachers. In 1955, the (brporation became the first statutory body in Indiato set up a research unit. It has recently carried out a reassessment ofselected test papers from sample schools in different areas in order tostudy the learning gaps and suggest remedial measures to improve teachingin municipal schools. An interesting experiment conducted by the researchunit is the "Ungraded Primary Unit", which has been introduced and extended
-- 2j202
up to standard IV with the goal of reducing the number of failures. An
Educational Guidance Centre,attached to the Research Unit, was opened
in 1966.
Similar developments have taken place at the student level.
Schools teach up to ten languages to cater to the needs of children with
different mother toungues, with Marathi, Gujurati, Urdu and Hindi being the
four major language groups. Special summer sessions are organized for
children scheduled to repeat classes. Free milk, free shacks and free
medical treatment facilities are provided to students in municipal schools
irrespective Lof the economic status of their parents. Playgrounds are
also provided and 29 after-school play centers have been started in various
parts of the city. Provision has also been made to teach art, craft, and
other skills at the hobby centers and the Corporation has the largest single
scout/guide unit in India with 20,000 scouts and guides.
Children's magazines have been published since 1965 in the four
major languages, in order to promote literary and artistic activities among
children. A separate audio-visual section has been started to supplement
the teaching program with audio-visual aids. The object of the Departmnt
of Education is to show at least three educational films every year to every
child in municipal schools. The corporation also provides vocational training
in 22 vocational schools --33 vocational classes offering training in 6 crafts.
Carpentry is taught in 16 classes, tailoring in 12 classes, clock repairing
in 2 classes and there is one class for each of signboard painting, book-
binding and printing.
- 203 -
Two very important steps in the field of primary education in Bcmbay
were the opening of a new municipal school for physically handicapped
children and a primary school for mentally retarded children. There are
at present five schools for handicapped and mentally retarded children.
The children in the municipal schools are medically examined
twice--once in the first grade, and again in the third grade.
Children requiring further care are referred to different school clini:s
conducted in the municipal general hospitals. There has been increasing
emphasis on health promotion. The Assistant Medical Officer (schools)
as well as 'school nurses give guidance in forming health habits to children
individually.
2. Expenditures
Expenditures on primary education account for a relatively high
share of BYC expenditures, around 10 percent over the past decade (see Table 71).
Table 71: PRIMARY EDUCATION
As a Percent Of: 1962-63 1969-70 1971-72
- CorporationTotal Expenditures 9.10 9.59 9.39
- Corporation's totalcurrent expenditures 9.26 10.61 10.36
- Social ServicesVtotal expenditures 43.69 44.42 38.95
- Social Services-annual expenditures 49.45 45.97 43-71
1/ Include Health, Education, Housing, Slum Improvement and Clearance.
Source: Table 12.
- 20 -
The distribution of spending among components of the education
function sugg.ests that greater efforts were directed toward the operation
of the existing educational system than toward the expansion of schools over
the last decade (see Table 72 and 73 ). The relative share of capital
expenditures in total expenditures has been declining over this period from
around 20 percent in the early 60s to 3 and 8 percent respectively in 1970-71
and 1971-72. Current expenditures for education increased at an annual rate
of 12.4 percent as compared to 10.9 percent for all expenditures including
capital expenditures. This pattern reflects the expenditure consequences of
using double shifts rather than constructing new buildings, as well as the
increased reliance on (and subsidizing of) the private school system.
There are presently 609 private primary schools in Greater Bombay
of which 218 are "aided schools", i.e. receive a grant-in-aid, and 391
are "recognized", i.e. receive no financial assistance but are supervised
by education officers paid by the Corporation. Aided schools may charge
tuition fees up to Rs 8 per student per month and remain eligible to receive
a grant. A new limit of Rs 12 which has been proposed by the BMC, was
being considered by the State Government in 1973. Grants to private
schools still represent a minor proportion of total current education
expenditures of the BME. This is partly attributable to the absence of
revisions in the grant formula over the years. Nevertheless, on a per student
basis, this grant is generally still higher than that allocated by the State
Government to the Corporation (Table 72).
Table 72: EDUCATION - BMC PRIMARY EDUCATION CURRENT EXPENDITURES('000 Ra)
62-63 63-64 64-65- 65-66 66-67 67-68 63-69 69-70 70-71 71-72 72-73
General Supervision & 617 807 782 971 1,276 1,500 1,677 1,798 1,949 2,238 2,416
Administration
Municipal Primary 25,107 29,050 33,256 38,810 44,335 57,190 61,610 62,075 66,630 . 76,406 82,768
Schools
Private Primary 671 671 687 701 763 1,520 1,200 1,408 1,646 2,046 2,738
Schools
Medical inspection of 333 51 413 451 589 659 '676 818 1,115 1,010 1,159
School children
Educational activities 174 291 397 614 648 761 989 879 905 1,010 1,235
Training facilities for 13 16 28 17 22 25 9 21 21 18 47
Municipal Teachers
Pensions, Provident Fund / 2,882 -3,560 3,911 4,214 6,618 8,141 6,436 7,133 7,479 8,235
charges
Debt charges 4,090 5,664 5,938 7,346 8,187 8,093 '8,089 8,246 8,544 8,644 8,820
Total Current 33,385 39,732 45,061 52,821 60,034 76,366 82,391 81,681 87,943 97,051 107,418
Expenditures
New Works 27 66 130 210 242 311 206 274 251 590 300
1/ Municipal primary schools and enforcement of compulsion
2/ Educational activity and extra curricular activities.
Sources BMC Annual Accounts0
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Table 73: GRANT PER STUDENT
Grant per Studentto BMC from State
Grant per Student Governmentto Private Schools Primary
from BMC Education Total-/(Rs) (Rs)
1960-61 NA 15.95
1961-62 NA 13.81
1962-63 NA 14.09 1.13
1963-64 NA 15.26 15.29
1964-65 11.03 14.38 14.41
1965-66 9.45 13.89 13.90
1966-67 12.11 13.17 13.28
1967-68 32.61 16.73 16.80
1968-69 20.67 14.5 14.63
1969-70 21.79 14,73 14.86
1970-71 24.69 14.21 14.30
1.71 14.84 14.92
1971-72
1/ Includes grants for teachers' training colleges.
Source: BMC Annual Accounts
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The relative share of the various educational activities in total education
expenditures are presented in Table 74. No drastic change took place over
the period as expenditures on primary municipal schools continued to be
about three-fourths of the budget. Activities other than the operation
of public schools, e.g. medical inspection of school children, have nearly
doubled in their relative share over the decade, but remain minor components
of the education budget.
Excluding expenditures on these educational dctivities, expenditures
on municipal primary schools increased at an annual rate of nearly 13 percent
over the 1962-72 period; a more important statistic is that expenditures
per student more than doubled, increasing from Rs 72 to Rs 1873, which
corresponds to an average annual rate of growth of about 9 percent :(see
Table 75). Per student expenditures as measured in real terms also increased
since the price index shows an annual increase of 6 percent in Greater
Bombay .
The other components of current education costs remained approximately
constant as a share of totateducation expenditures,with one notable exceprion being
the : differential growth rate between the components of wages and salaries--
pay and allowances. Average monthly allowances increased nearly twice
as fast as pay rates, i.e. 10 percent as against 5.4 percent. Average
monthly salary, including both pay and allowances, improved substantially
in real terms. (See Table 76).
*Table 7h: PRIMARY EDUCATION-BMC. CURRENT 4XPENDITURES PERCENTAGE DISTRIBUTION
62-63 63-64 64-65 65-66 66-67 67-68 68-69 69-70 70-71 71-72 72-73
Total Current Expenditures (Rs 1000) 33,385 39,732 45,061 52,821 60,03L 76,366 82,391 81,391 87,943 97,051 107,418
Accounted for by:
General Supervision Administration 1.85 2.03 - 1.74 1.84 2.13 1.96 2.04 2.20 2.22 2.31 2.25
Municipal Primary Schools 75.20 73.11 73.80 73.47 73.85 74.89 74.78 76.00 75.76 78.73 77.05
Private Primary Schools 2.01 1.69 1.52 1.33 1.27 1.99 1.46 1.72 1.87 0.25 2.55
Medical Inspection of School Children 1.00 0.88 0.92 0.85 0.98 0.86 0.82 1.00 1.27 1.oh .1.08
Educational Activity . 0.52 0.73 0.88 1.16 1.08 1.00 1.20 1.08 1.03 1.04 1.15
Training Facilities for Municipal 0.04 0.04 0.06 0.03 0.04 0.03 0.01 0.03 0.02 0.02 0.0)4Teachers
Pensions, Provident Fund Charges 7.13 7.25 7.9Y. 7.40 7.02 8.67 9.88 7.88 8.11 7.71 7.67
Debt Charges 12.25 14.26 13.18 13.91 13.64 10.60 9.82 10.10 9.72 8.91 8.21
Source: BMC Budget Estimates
. OD
- 209 -
Table 75: COST PER STUDENT ENROLLED IN THEXUNICIPAL PRIMARY SCHOOLS - BMC
(Rs)
Total Total CurrentTotal Cost per Current -Cost per
Expenditures Student Expenditures Student
1960-61 NA 23,872,115 71.67
1961-62 NA 27,677,291 79.20
1962-63 40,716,893 108.26 32,704,223 86.95
1963-64 49,853,613 121.75 39,051,405 95.37
1964-65 53, 0h,169 122.07 h.,372,984 102.12
1965-66 58,270,616 129.L6 52,117,055 115.79
1966-67 62,970,877 132.72 59,267,510 124.91
1967-68 82,335,656 171.10 746,842,068 155.53
1968-69 91,004,576 185.22 81,188,649 165.28
1969-70 86,484.,831 174.62 80,270,587 16207
1970-71 89,077,753 177.08 86,293,824 171.54
1971-72 10,758,426 198.11 96,801,390 183.06
1972-73 NA 104,676,321
Source: BRO Annual Accounts
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Table 76: AVERAGE PAY AND SALARIES FOR PRIMARY SCHOOL
TEACHERS
1972-73 1968-69 1963-64
Pay (Monthly)
--Total pay (Rs)
--Trained Teachers 2,538,911 1,869,526 1,160,860
--Untrained Teachers 31,300 43,249 53,096
--Special Teachers 285,493 254,439 58,181
--All Teachers 2,855,704 2,167,214 1,272,137
--Number of Teachers
--Trained Teachers 13,981 12,593 9,670
--Untrained Teachers 235 423 645
--Special Teachers 1,442 1,070 511
--Total Teachers 15,258 14,086 10,826
--Average Monthly Pay (Rs)
--Trained Teachers 186.95 148.46 120.05
--Untrained Teachers 133.19 102.24 82.32
--Special Teachers 197.98 237.79 113.86
--All Teachers 187.16 153.86 117.51
--Salaries- (Rs)
-- Total Annual Pay 2/ 35,129,188 26,440,011 15,520,072
--Total Annual Alwances- 32,645,949 22,133,411 9,831,904
--Total Annual Salaries 67,775,137 48,573,h22 25,351,976
-,Average Monthly Pay 191.86 156.42 119.47
--Average Monthly Allowance 178.30 130.94 75.68
--Average Monthly Salary 370.16 287.36 19.15
-- Salaries as % of Tot 64Current Expenditures-75 9983 64.92
--Salaries per Student 121.72 98.86 61.92
--Salaries per Student adjustedfor decline in teacher-student ratio 118.13 91.71 61.92
1/ Pay and Allowances.
2/ Include conveyance allowance, dearness allowance and provision for acting arrangement.
3/ Total current expenditures excluding expenditures on private school.
Source: BMC Establishment Schedule
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3. Financing Methods
The main sources of financing primary education expenditures are,
by decreasing order of importance, transfers from the general revenue budget
of the Corporation to Budget E, and tax revenues and grants from the State Govern-
ment (Tables 77 and 78). Based on 1972-1973 budget estiTates, grants account
for about 8 percent of total current expenditures. Education tax (cess) revenues,
a property tax surcharge earmarked for education_1urposes, account for about
18 percent of expenditures. The balance is contributions from the general
revenue budget of the BMC, i.e. transfers from budget A to budget E. These
contributions account .for nearly three-fourths of total ---
current expenditures. They are of two types: (1) general contribution
which is determined by statute and is based on general property tax receipts,
and (2) a "special contribution" which is not compulsory but is given to
cover any deficit incurred during the current financial year. The relative
shares of these contributions are 35 and 36 percent'respectively.
a. Government Grants Education grants usually originate at the State
Government level. In fact, since 1960 only one case of Central Government
financial aid can be reported and it took place under circumstances
reported as "exceptional", involving a need to cover an increase in
emoluments. The grant system operated by the State Government is designed
to cover current expenditures incurred in primary schools and colleges of
education, with the latter representing a minor part of the grant. Actually,
the grant is made on an ad-hoc basis and is related neither to the number of
students-enrolled nor to overall needs of the educational system. In the
Table 77; Education Budget - Revenues(Rs '000)
1960-61 - 1961-62 1962-63 1963-64 1964-65 1965-66 1966-67 1967-68 1968-69 1969-70 1970-71 1971-72 1972-731
Tax Revenue - Education Cess 4,672 4,707 5,672 8,537 8,855 9,823 10,337 9,445 14,250 15,128 14,306 16,070 19,030
Rents and Other Proceedsof Properties 62 149 61 92 134 111 134 144 125 120 143 146 145
2/Interests- 275 267 331 481 80& 981 655 815 342 283 530 1,666 1,009
Miscellaneous Receipts 66 251 95 114 152 157 148 202 146 184 600 17.0 150
TOTAL "OWN" REVENUES 5 5 61 9224 9 17 10 20,374
Tran6fer from Municipal Fund
5/1. Statutory Contribution- 14,692 17,303 17,800 18,829 18,759 20,204 21,057 23,988 24,974 30,446 30,530 33,367 40,268
' 6/2. Special Contribution- 427 5,000 5,500 7,500 10,000 12,500 25,000 35,000 35,000 30,000 36,000 36,000 38,000
TOTAL TRANSFER 15,19 20 2 28 759 32,704 46,057 58,988 59,974 60,446 66530 69367 78,267
Grant from State Government
For Primary Education ) ) 5,300 6,250 6,150 6,250 6,250 8,050 7,150 7,297 7,150 7,850 7,850
3/ ) 5,312 ) 4,827For Colleges of Education- ) ) 14 10 11 7 50 32 36 64 45 42 40
Grant from central Government - - - - 549 - - - - - - - -
TOTAL GRANTS 5 4,827 5 ,7 6 0 0 7 1M 7,892 7890
TOTAL REVENUES 25,506 31,504 34,773 41,813 45,518 50,033 63,631 77,676 82,023 83,522 89,304 95,311 106,531
1/ Budget Estimates.2/ Interest on Endowments and Investmentst interest and profit on investments of surplus, loan and other balances.
3/ R. C. Urdu Teachers' Junior College of Education, Imamwada; Municipal Urdu Teachers' Jr. College of Education,:Mahim.
4/ For additional expenditures due to increase in Emoluments.
5/ Contribution under Section 126C(c) of BNC Act.
6/ Under clause 126C(c-1) of Schedule BBA of BMC.
Source: B11 Annual AccountS
Table 78: EDUCATION REVENUES - PERCENT DISTRIBUTION - BMC
Est.1960-61 1961-62 1962-63 1963-64 1964-65 1965-66 1966-67 1967-68 1968-69 1969-70 1970-71 1971-72 1972-73
I. Tax Revenue:
Education Cess 18.32 14.94 16.31 20.42 19.45 19.63 16.25 12.16 17.37 18.11 16.02 16.86 17.86
Rents and Other Proceeds 0.24 0.47 0.18 0.22 0.24 0.22 0.21 0.19 0.15 0.14 0.16 0.15 0.14of Properties
Interest 1.08 0.85 0.95 1.15 1.78 1.96 1.03 1.05 0.42 0.34 0.59 1.75 0.95
Miscellaneous Receipts 0.26 0.80 0.27 0.27 0.33 0.31 0.23 0.26 0.18 1.22 0.67 0.18 1.18
Total Own Revenue 19.90 17.06 17.71 22.06 21.86 22.13 17.72 13.65 18.12 18.81 17.44 18.94 19.12
II. Transfers from Municipal Fund:
Statutory Contribution * 57.60 54.92 51.19 45.03 41.21 40.38 33.09 30.88 30.45 36.45 34.19 35.01 37.80
Special Contribution 1.67 12.70 15.82 17.94 21.97 24.98 39.29 45.06 42.67 35.92 40.31 37.77 35.67
Total Transfer 59.28 67.62 67.01 62.97 63.18 65.36 72.38 75.94 73.12 72.37 74.50 72.78 73.47
III. Grant from State Government: I
For Primary Education ) 15.24 14.93 13.73 12.49 9.82 10.36 8.72 8.74 8.01 8.24 7.37) 20.83 15.32
For Colleges of Education ) . 0.04 0.02 0.02 0.01 0.08 0.24 0.04 0.08 0.05 0.04 0.04
Grants from Central Government .1.21
Total Grants 20.83 15.32 15.28 14.97 14.96 12.51 9.90 10.40 8.76 8.81 8.06 8.28 7.41
IV. Total Revenues 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Source: BMC Annual Accounts
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early 60's grants contributed to about20 percent of the Corporation expenditures.
The grant per student has remained nearly constant while the cost per student
more than doubled. Whether .6r not this system discriminates against the Corporation
is difficult to assess. It would be of interest to compare the grant per
student allocated to the BM with the average grant per student allocated
to the rest of the local authorities of the State of Maharashtra. Unfortunately,
the number of students covered is not known for the whole
State of Maharashtra. However, on the basis of the total grants allocated
by the Government of Maharashtra to Primary Educaticn, it can be seen that,
other things being equal, the postion of the.BM has deteriorated with a
relative share of State Education Grants currently .1.5 percent as compared with
5.0 percent in 1963-64 (Table 79). It -would appear that relatively more
Government aid flosto~heother local authorities in the State--ab6ut nine
percent of total expenditures on education incurred by the
local authorities are financed with government grants. However, the allocation
of these grants among local authorities is being revised by the Government,
with agreement already reached to eventually finance 20 percent of BWC
expenditures.
b. Tax Revenues The BIC levies an education cess, an earmarked tax
on the net rateable value of real properties, with rates as shown in Table
80. The rate of this cess may not exceed 5 percent by law. The rate of
2-1/2 percent for properties valued Rs. 300 and above is, in fact, the ceiling
for the BMC since the State Government has also levied and education cess (sihce
October 1962. 1/) The rate of this cess was first fixed at 2 percent for all
1/ Maharashtra Education (Cess) Act, 1962.
Table 79: STATE EDUCATION GRANTS TO TH LOCAL AUPHORITIES
(Rs 000)
Primary Education Secondary Education Total Education
BombayFs Bombay's Bambay- s
Relative Relative Relative
Maha- Share Maha- Share Maha- Share
Bombay rashtra % Bombay rashtra % Bombay rashtra,, %
1972-7 1 7,890 530,817 1.49 1,900 50,417 3.77 9,790 581,234 1.68
1971-72 7,892 468,313 1.69 2,105 45,091 4.67 9,997 513,404 1.95
1970-71 7,195 465,448 1.55 2,521 41,938 6.01 9,716 467,969 2.08
1969-70 7,361 344,528 2.14 3,002 10,478 28.65 10,363 347,530 2.98
1968-69 7,186 264,042 2.72 1,890 12,136 15.57 9,076 276,178 3.29
1967-68 8,082 229,249 3.53 802 8,756 9.16 8,884 238,005 3.73
1966-67 6,300 NA - - NA - NA -
1965-66 6,257 168,398 3M72 - 2,856 - 171,254 -
964-65 6,261 170,873 3.66 - 3,142 - 174,015 -
1963-64 6,26o 126,075 4.97 - 2,V461 - 128,536 -
1/ Revised estimates
Source: Same as Table 67
Table 80: EDUCATION CESS RATES
State Education CessNet rateable value Municipal 1967
of property Rates 1962-67 Onward
0 - 74 Rs Exempt Exempt
75 - 299 Rs 2% 2% 2%
Rs 300 and above 241 2%
Source: BM Staff.
-property values and extended to 2-1/2 percent for properties valued at
Rs. 300 and above. The State Cess is levied throughout the State and
like the municipal cess is based on the annual letting value of lands
and buildings in the municipal areas. In rural areas, it is a special assess-
ment on all agricultural lands growing specified commercial crops. The
collection of the state education cess in the Greater Bombay area is
assumed by the Corporation which receives a small fee for collection
costs. The tax proceeds are credited to a separate State Educaton Fund.
The State tax has been used in recent years to equalize education
expenditures between rural and urban areas. It is not returned by the
State on a basis of place of collection. In fact, for Greater Bombay,
the government grant currently represents about 80 percent of the total
amount collected in the State (Table 81).
- 217
Table 81: C0CMPARISON OF STATE EDUCATION PROCEEDSWITHIN GREATER BCHBAY GRANT RECEIPTS
(1) (2)Grant from Grant as a %
State Education State of CessCess Allocation Gover=nent Collection
(Rs '000) (Rs '000) (2) / (1)
1965 4,793 6,250 1.30
1966 5,219 6,300 1.21
1967 6,181 8,082 1.31
1968 7,604 7,186 0.94
1969 8,238 7,361 0.89
1970 8,817 7,195 0.82
1/1971-72- 10,050 7,892 0.79
1/ Include also "Additional State Education Cess"
Source: BMC Annual Accounts
-218 -
In 1971-1972 the State Government introduced an "additional
state education cess" to help the Central Government finance the
Bangladesh -war. This tax has remained in existence and is currently
earmarked to assist drought-plagued areas.
4. Municipal Fund Contributions
There are two types of contributions, the first of which is a
general (or statutory) contribution which is mandatory (section 126C (c)
of the BM Act) and its maximum in any given financial year is equal
to 5 times the amount of the estimated net general property tax demand
(including arrears and payment in advance) divided by the rate fixed
for general tax. The General tax for these purposes include the receipts
of the property tax raised on the net rateable value of lands and property
at a current rate of 24 percent. The BMC has tended to rely progressively
less on this type of contribution, as is shown by a drop in its relative
share in total-revenues from 58 percent in 1960 to 35 percent in 1971
(see Table 78). This is however, of little effect since what is not
supported by this contribution is taken up ty increases in the special
contribution, which is actually a "deficit" grant (transfer) from Budget
A to E. Indeed, the relative share of this contribution increased from
less than 2 percent in 1960 to about 38 percent in 1971-72.
0. Secondary Education
The Corporation entered the filed of secondary education in 1966-67
and administers, at the present time, 27 schools with an enrollment of
approximately 19,000 students. The sec:andary educAtion system, strictly
defined, consists of four years of education covering grades 8 to 11. However,
high schools may also include middle schools grades 5 to 7; and where these
- 219 -
grades are placed under the supervision of a seconda%ry school, they are
regarded as part of the secondary sdhool system. The integration of these
grades to high schools is becoming a more common phenomenon because of
financial reasons. Where these grades are attached to a secondary school,
they can benefit from the financial assistance programs dispensed by the State
Government to secondary schools. Under this system, the m=icipal secondary
school system currently has an enrollment of about 64,000 students.
Table 8 gives statistics on the secondary education system as
strictly defined--no statistics on the enlarged system are available for
earlier years. After a period of rapid enrollment and staffing growth,
a relatively constant level of activity has prevailed since 1969. The
more recent pattern is attributable mainly to financial constraints.
The Municipal Authority clearly intends to develop a secondary
school system, but data problems make it difficult to assess the role
occupied by the municpal government secondary schools. In 1971, there
were 725 institutions with 498,000 students reported enrolled in
secondary schools. 1/ All but a few, of these institutions are run by
private institutions. The Government of India operates 3 high schools
There is no direct state involvement in this area except for the supervision
of 3 technical and commereial high schools
1/G overnment 0 Maharashtra, Hand Book of Basic Statistics of MaharashtraState, 1972.
'Table 82: SELECTED STATISTICS ON THE MUNICIPALSECONZARY SCHOOL SYSTEM
Nunber - Student/Nmnber of Teaching Teacher
of Students Staff RatioSchools Grades 8-11
1965-66 17 4025 141 29
1966-67 22 10,161 348 29
1967-68 27 14,733 489 30
1968-69 27 17,939 608 30
1969-70 27 17,010 602 28
1970-71 27 17,214 6.0 28
1971-72 27 18,870 650 29
Seurce: Government of Maharashtra, op. cit.
- 221 -
1. Grant-In-Aid System
Schools which are elegible for government assistance l:may receive
the following kinds of grants, which are paid at the discretion of the
State government and are subject to availability of funds:
--maintenance grant
-- equipment grant
--buildings grant, and
--such other grants as may be sanctioned by Government from
time to time.
a. Maintenance grant. This grant covers: (1) all anticipated expenditures
incurred on scheduled salaries and allowances, and the contribution
to the State Provident Fund Scheme at the sanctioned rate f o
those non-teaching and teaching staff appointed before April 1, 1966 who
have opted for Contributory Provident Fund Scheme at the-approved scale.
The basis of the grant regajrding salaries and allowances is the schedule of salary
rates fixed by the Government. The salaries actually paid by the Corporation are
usually 50 percent higher than these rates; (2) All expenditures made
during the preceding year on rentj (3) All actual expenditures made during
the preceding year on admissible items other than staff and rent,or 12
percent of the total admissible expenditure of the preceding year, whichever
is less; and (4) a grant of 1 rupee per student enrolled per year. In
addition to these maintenance grants, the Government may sanction additional
discretionary grants, not exceeding 5 percent of the admissible expenditure
-222-
of selected schools in urban and rural areas which deserve
___"secial consideration." Schools maintaining high standards of education
and those undertaking educational experiments may also be considered for
ad hoc discretionary grants. The basis of these grants is "net admissible
expenditures," i.e. all admissible expenditures minus the total amount
of sanctioned revenues. Such revenues are in the form of tuition, fees
recoverable from fee-paying students during the preceding year, and the
contribution payable by the management of the school calculated as 1
percent of the total admissible expenditure of the preceding year.fpr
schools in rural areas and two and one half percent for schools in urban areas.
Grants are paid only for classes with an average daily attendance
of 30 students or more, although this rule may be relaxed under particular
circumstances. Finally, schools charging tuitions at rates higher than
1.5 times the standard rates prescribed for their areas are not eligible
for grants in aid of any kind.
The standard rates of tuition fees as prescribed by the Government
are as follows:
City/Area GradesV VI VII VII IX X XI
Greater Bombay (Rs) 5.oo 5o 6.oo 6.50 7.00 7.50 8.oo
Cities of Poona, Nappurand Sholapur (Rs.) 4.00 4.50 5.00 5.50 6.00 6.50 7.00
Other Areas (Rs.) 3.00 3.50 4.00 4.50 5.oo 5.50 6.00
- 223 -
In the case of schools situated in backward areas or attended.mainly by poor
children, lower than prescribed rates can be charged. Unaided schools are
allowed to charge tuition fees at rates higher than the standard rates
with the prior approval of the State Pirector-, of Education. Schools are
also allowed to charge admission fees equal to an amount which cannot
exceed one monthts tuition fee for the standard to which the student is
admitted. Finally, term fees up to the amount of the monthly tuition
fee prescribed for standard V in the area can be charged to meet
expenditures on medical inspection of students, and other educational
activities. As a. general rule, night schools can charge only half the
rates prescribed for other schools.
b. Building Grant Building grants may be given,subject- to
availability of funds, for erec-.ing, purchasing
extending or reconstructing school buildings. A building grant may be paid
at the rate of 1/3 of the total expenditure in the case of ordinary
secondary schools or 1/2 of the total expenditures in the case of vocational
high schools (including hostels and workshbps attached to them). The
maximum grants are not fixed and each case is considered on merit, with
consideration being given to funds available for that purpose.
c. Equipment Grants Expenditures on equipment such as school
furniture, library, laboratory, workshop, and teaching aids are admissible
for maintenance grants provided that they do not exceed the limit of 12
percent of the total actual expenditure (exclusive of e7-penditure on
-224
equipment). Expenditures on equipment exceeding this limit will be eligible
for ad hoc grants up to 25 percent of such expenditure, with these grants
being paid subject to fund availability,.
d. Grants to Vocational and Technical Schools Recognized non-
government technical high schools (including technical sections of secondary
school and multi-purpose high schools) and vocational high schools which are
under the control of the Directorate of Technical education..are, Fsubject
to availability of funds, eligible for maintenance grants on their total
admissible expenditure on the basis of five factors:
(1) Anticipated expenditure on salaries and allowances at sanctioned.
rates; and, the contribution of the management of the schools to the State
Provident Fund Scheme on account of the non-teaching staff and those on
the teaching staff appointed before April 1, 1966, who opted for the
contributory Provident Fund Scheme at the approved scales.
(2) All rent expenditure of the preceding year..
(3) All expenditures of the preceding year for admissible items
other than staff and rent and covered under Item (4) below; or, 12 percent
of the total admissible expenditure of the preceding year after excluding
expenditures covered by Item (4) below, whichever is less.
(4) A per capita workshop contingent grant at the rate of Rs 20
per student on the roll of the school during the preceding year, or th
actual expenditure in the preceding year, whichever is less.
(5) A per capita grant at the rate of 1 rupee per student per
annum on the roll of the school during the preceding year.
- 225 -
Here again, net admissible expenditures are taken as the basis of these
computations. They are determined by deducting from all admissible
expenditures the total amount of the sanctioned tuition fees recoverable from
the fee paying students during the preceding year and the contributions
payable by the management of the school calculated as 1/2 percent of the
total admissible expenditure of the preceding year.
2. Budgetary Position of Secondary Education
Expenditures and incomes of secondary education are recorded in
Budget A (IV) along with the accounts of the'Municipal libraries.- 'As a
result of this presentaton, it is not possible to trace all expenditures
incurred on secondary education; in particular, the amount of expenditures
on debt service, provident fund, and premium cannot be determined. Expenditures
on debt service are likely to be quite small since the policy of the
Corporation has been to hold high school classes in already existing
buildings. Little can be said on the magnitude of the remaining two
expenditure categories.
Table 83 presents the accounts of secondary schools. Current
expenditures increased at an average compound rate of 45 percent over the
1968-1973 period. In spite of this rapid growth, expenditures on secondary
schools rank quite low when compared with expenditures incurred on the
primary education system. Currently, about 4 percent of the primary
education budget is spent on high schools. There are three main sources of
revenues: income from fees, government grant, and General Revenues. The
latter source of revenue, contrary to the financing pattern of the primary
Table 83: SECONDARY EDUCATION - RBVEUIES AND EXPENDITURES - BMC
1967-68 1968-69 1969-70 1970-71 1971-72 1972-731/
I. REVENUES
1) Fees
a. Tuition fees 624,816 572,115 - 1,704,000
b. Admission fees 597,818 1,230,274 5,899 7,694 679,985 6,000
c. Term fees 107,591 123,466 - 190,000
Total fees 597,818 1,230,274 738,306 703,275 679,985 1,900,000
2) Miscellaneous receipts - - 4,207 5,305 3,026 2,000
Total own revenues 597,818 1,230,274 742,513 708,580 683,011 1,902,000
3) Transfer from general 631,815 - 547,054 1,362,303 632,800
revenue budget
Total BMC revenues 1,229,633 1,230,274 742,513 1,255,634 2,04,314 2,534,800
4) Grant in aid from 802,009 1,890,000 3,002,379 2,521,514 2104,900 1,900,000
State GovT.
TOTAL REVENUES 2,031,642 3,120,274 3,744,892 3,777,148 4,150,214 4,434,800
2/II. Current Expenditures7 2.031,642 2,966,823 3,180,495 3,777,148 4,150,214 4,434,800
SURPLUS - 153,451 564,397 -
1/ Based on budget estimates2/ Exclude debt charges and provident fund charges as no breakdown of Head IV of Budget A is available.
The inclusion of these elements would not modify the direction of the results.
Source: BMC Annual Accounts
- 227 -
education budget, is not statutorily determined; nor is its amount based on
a formula. General revenues of the BN3 are used to finance current deficits.
The reliance on this source of revenues has not been regular and it is not
intended to become a regular source of income. Tuition, fees, and govern=
ment grants are considered as the primary sources of revenues. Since
1969-70, fees have represented between 16 and 20 percent of all revenues,
though there have been declines in recent years (See Table 84). This decline
is not explained by a decrease in the student enrollment or in the level
of current expenditures, nor by a strict implementation of the secondary
school code. It seems more likely that during this period the Corporation
did not exercise:!fully its rights to Government financial assistance.
Indeed, the grant amount budgeted for 1972-73 and 1973-74 shows a sharp
increase up to 5 million ruppes in 1973. Until last year no grant was paid
to the Corporation on behalf of the middle school grades attached to the
secondary school system.
The grant receipts positions of the BI vis a vis the other local
authorities of the State of Maharashtra is not easily determined because of
a lack of information about the development of the public and private secondary
school system in other areas of the state. However, the relative share
of the secondary schools operated by the BDC in the financial assistance
provided by the State was approximately 4 percent in 1972-1973,
showing a decline from about 9 percent in 1967-1968 and 29 percent in
1969-1970.
-228-
-Table 84: REVENUE AND OURENT COST PE STUDENTENROLLED IN SEC 0\DAR SCHOOLS
(Rs)
Revenues Currentfrom Expendi-Fees Grant tures
1965-66 67.17-1/ 78.92
1966-67 54.1 - - 10h.00
1967-68 40.58 54.44 137.90
1968-69 68.58 105.36 165.38
1969-70 43.40 176.51 186.98
1970-71 40.85 146.48 219.42
1971-72 36.o4 111.55 219.94
1/ Based on own revenue
Source: Tables 72 and 78
229
D. Medical Education
The Corporation runs three medical colleges and one dental collegeattached to municipal hospitals. The medical colleges have been under
municipal supervision for a number of years. The State Government alsoadministers some medical colleges. Table 85 provides some information
on the number of students enrolled in each institutions from 1964-1975 to1970-1971. Altogether, about 3,000 students were enrolled in the medicaland dental colleges in 1971-72.
The data in Table 86 show the budgetary account of these
institutions. The sources of revenue are not documented in detail, butall expenditures incurred in these institutions are borne by the BMC and
no financial assistance is received from the State or the Central Government.
Any current deficit is financed from general revenues.
Table 85: MEDICAL EDUCATION - NUNBER OF STUDENTS AND COSTPER STUDENT IN THE MEDICAL COLLEGES - BM0
196h-6 1965-66 1966-67 1967-68 1968-69 1969-70 1970-71 1971-72
LTM Medical College
-- Undergraduates 60 120 204 264 323 347 340 261
-- Postgraduates - - - - - 15 127
Total Number of Students 60 120 2011 264 323 347 355 388
Cost per Student (Rs) 1,367 3,035 2,210 3,107 2,491 3,270 3,57 3,788
G.S. Medical College
-- Undergraduates NA NA 837 837 844 984 883 89
-- Postgraduates - 277 277 323 500 432 478
Total Number of Students NA NA 1,114 1,114 1,167 1,484 1,315 1,337
Cost per Student (Rs) 1,776 2,059 2,048 1,923 2,212 2,323
N.H. Dental College
-- Undergraduates 244 1 2721/ 1721/ 196! 1921 2201V 2281/ 250
-- Graduate - - - - - 24 r>
Total Number of Students 244 272 172 196 192 220 228 274 o
Cost per Student (Rs) 2,603 2,214 3,534 4,595 4,375 4,153 5,916 5,565
TN Medical College
-- Undergraduates 484 583 644 643 639 668 657 638
-- Graduate 161 90 160 192 198 219 300 331
Total Number of Students 645 673 804 835 837 887 957 969
Cost per Student (Rs) 1,554 2,001 1,717 2,201 2,352 2,698 2,706 2,70
Total Number.of Students - 2,294 2,409 :2,519 2,938 2,86 2,968
Average Cost per Student (Rs) - - 1,926 2,430 2,383 2,483 2,840 2,938
1/ Estimates based on number of degrees awarded.
Source: BMC Annual Accounts
Table 86: MEDICAL COLLEGES - STATEMENT OF ING00ME AND EXPENDITURES BY INSTITUTION
(Rs 000)
1962-63 1963-64 1964-65 1965-66 1966-67 1967-68 1968-69 1969-70 1970-71 1971-72 1972-73Income
(a) G.S.Medical College~ 183 248 278 310 1,438 409 389 383 419 430
(b) T.N.Medical College 138 222 228 261 843 292 301 323 334 344 350e/ 300-'
(c) N.H. Dental Collegi 188 176 217 208 182 209 ,320 307 318 288
(d) L.T.M. -Medical College - - - -55 78* 106 119 131 121 175
1 26/;Total 509 646 723 779 2,518 988 1,116 1,132 1,202 1,183 1,260
Current Expenditures
(a) G.S.Medical College 1,008 1,113 1,239 1,580 1,979 2,294 2,390 2,854 2,909 3,105 4,103-
(b) T.N.Medical College 728 890 1,003 1,347 1,380 1,838 1,968 2,393 2,590 2,622 3,573
(c) N.H.Dental College 528 516 635 . 602 608 901 840 914 1,348 1,525 1,732
(d) L.T.M.Medical College - 82 '. 364 451 820 805 1,135 1,259 1,170 1,700-2/
Total 2,264 2,519 2,952 3,893 4,418 5,853 6,003 7,296 8,106 8,722 11,108-
Current Deficit -1,755 -1,873 -.2,229 -3,114 -1,900 -4,865 -4,887 -6,164 -6,904 -7,539 -9,848:
1/ Based on revised budget estimates.2/ Based on budget estimates
a/ Gordhandas Sunderdas edical Collegeb/ Topiwala National Medical Collegec/ Nair Hospital Dental College1/ Lokmanya Tilak Municipal Medical College, Sion
Source: die Annual Accounts
-232
IX* HEALTH AND WELFARE EXPENDITURES
A. Health
1. Scope of,Services
The Corporation is involved in the delivery of three major types
of activities in the field of Health: (1) general sanitation. (-2) prevention
and control of infectious and cnnmunicable diseases, and (3) medical
relief administered in hospitals, dispensaries, maternity houses, and
famTily welfare planning centers.
a. General Sanitation- Food sanitation activities consist of
the control and supervision of the processing', preparing, and serivng
o. food in premises where food products are manufaciared,_stored and
exposed for sale. This control is exercised by requiring license under
sections 394 and 1l2A of the BM Act and under the Maharashtra Prevention
of Food Adulteration Rules of 1962. Food establishments are controlled
and graded under the prevention of Food Adulteration Act of 1954 and
subsequent Rules. In order to improve the standard food sanitation, eating
houses are classfied as grades I, : and III on the basis of
their compliance with the conditions of the license and other measures
required to maintain an adequate state of cleanliness and sanitation.
The grade allotted to an eating house must be exhibited in a conspicuous
place at the entrance. Similar methods of grading for
bakeries were introduced in September 1964. Special arrangements for the
upgrading of bakeries are, inter alia, arrangements for cleansing and
sterilizing all utensils and other appliances, and for improving the
- 233 -
personal hygiene of the staff. A special staff of insepctors is in charge
of checking adulteration of food. Certain other trades, such as hair-dressing
saloons, and laundries, are also regulated by the Health
Department. Finally, the Health Department monitors the adequacy of city
drinking water. While the City continues to receive chlorinated and filtered
water supply, constant check on the quality of water supply and the dosage
of chlorine is exercised through sampling and analysis of water at various
points in the supply and distribution systems.
l. Prevention and:Control of infectious Diseases The.- prnary measures
used for preventing and checking the spread of infectious diseases
are immunization and pest control. Patients with infectious diseases,
with the exception of tuberculosis, veneraldiseases--
and leprosy, are isolated and treated at the Kasturba Hospital for Infectious
Diseases, which has a capacity of 680 beds. Leprosy cases are treated at
the Acworth Leprosy Hospital, which can accommodate 500 patients. The Hospital
also operates nine clinics, of which five are located in the City and four
in the Suburbs. The clinics are maintained under the Qreater Bombay Leprosy
Control Scheme whose aims and objectives are to control leprosy in Greater
B ombay through survey., educati on, and treatment. In addition, the Acworth
Hospital conducts an out-patient clinic with education, case detection, and
treatment facilities, including physiotherapy, chemoprophylaxis, and
reconstructive and plastic surgery. Some idea of the level of activity at
the clinics is shown below:
Table 87: NUMBER OF PATIENTS AT THE ACWORTH LEPROSY CLINICSin 1971-72
AL Hospital GELC SchemeClinic (9 clinics)
New cases 4,-.37 2,e9(
Old Cases 11,036 7,762
Average daily attendance 260.3 374.46
Source: BMC STAFF
The Corporation bears the entire cost of the out-patient clinic attached
to the Acworth Leprosy Hospital, one-third of the recurrent expenditures,
and all of the capital expenditures incurred under the Leprosy Conttol
Scheme.
Cases of tuberculosisare treated at the Municipal Group of
Hospitals of Sewri, which have an accommodation capacity of 830 in-patients,
and at the Sarvodaya Hospital, Ghatkopar, where 500 beds are reserved by
the Municipal Corporation. There is also an isolation center attached to
Ramkunwar Daftary T. B. Clinic. Statistics on T. B. Hospitals, Sewri,
1/are given in Table 88 below.- Finally, various eradication programs
regarding small-pox, venereal diseases, filaria and malaria are administered
on a regular basis.
1/ Includes: (1) Groups of T.B. Hospitals, (a) Medical, (b) Surgical;(2) Isolation Center attached to Ramkunwar Daftary T.B. Clinic;(3) Sarvodaya Hospital, Ghatkopar.
Table 88: SELECTED STATISTICS ON THE MUNICIPAL GROUP OF TUBERCULOSIS HOSPITALS
19'1-72 1970-71 1969-70 1968-69 1967-68 1966-67 1965-66 196h-66 1963-64
No. of Beds 1,h18 1,418 1,318 1,288 1,288 1,288 1,188 1,0h8 1,0h8
No. of Patients 6,801 7,078 7,349 6,879 6,927 6,709 5,93h 5,768 5,999
Treated
Av.Expenditures/ 18.74 15.95 14.59 13.69 13.22 12.33 9.79 9-91 9.11
Patient/Day
Source: BMC Staff
- 236 -
c. Medical Institutions In addition to the institutions mentioned above
the Corporation operates ten general hospitals, two special hospitals, 107
dispensaries, 24 maternity houses, and 52 family welfare planning centers. A
statistical summary of the operation of these institutions is shown in Tables
89 to 91. The use of two sets of statistics on hospitals is .necessitated by
data inconsistencies. This problem arises because responsibilities for the
management: 6f the municipal hospitals are shared between the Health
Department of the BM on one hand and the Municipal Commissioner in charge
of Personnel on the other. In the latter case, the hospitals are placed
directly under the control of Deans since the medical and dental colleges are
administered by the hospitals. Data for only three of four such hospitals
are presented in Table 90 since data on the fourth, which deals with ear, nose,
and throat diseases, werenot 4vailable.
The Corporation has directed considerable efforts toward the.
expansion of hospital accamodations and the treatment of outdoor patients.
Three new general hospitals were opened during the 6 0ts. The number of
patients treated in hbspitals increased from 3,214 in 1963 to 5,323 in
1972 and the number of beds per thousand inhabitants increased from 0.72 to
0.86. Still, it is reported that conditions in the hospitals have improved
very little, particularly with respect to the overcrowding of in-patient
Table 89: PUBLIC HEALTH EXPENDITURES - BMC * PERCENTAGE DISTRIBUTION
1962-63 1963-64 1964-65 1965-66 1966-67 1967-68 1968-69 1969-70 1970-71 1971-72 1972-73Total Expenditures (Rs) 33,088,739 38,723,012 39,851,186 55,753,134 60,214,281 77,h85,620 82,989,610 90,856,567 107,053,380 115,963,966 135,923,136General Supervision 6.08 5.69 5.59 4.78 P1.73 3.56 3.91 4.47 3.54 '3.53 2.90Epidemies . 2.15 1.72 2.14 2.64 2.81 2.22 2.66 3.56 2.87 2.95 2.59
Vaczination .93 .85 .83 .76 .95 .92 1.06 .93 68 .61 .99Malaria and Insecticides 5.03 7.68 5:-64 5.145 5.62 4.71 5.00 5.38 5.18 5.05 4.77Filaria - - - - - - - ogligible .19 .24
Hospitala 49.55 47.75 54.60 52.93 53.65 48.61 50.58 56.69 57.79 58.63 60.11Maternity Homes 3.46 1.08 1.90 3.99 4.61 3.64 3.94 5.17 5.65 6.24 6.61Maternity and Children
Welfare 2ervices . .24 .22 .22 . .30 .20 .14 .15 .15 .13 .13 .18Dispensaries 3.73 3.66 3.82 3.21 3.50 2.95 3.07 3.45 3.78 3.63 4.78Mobile Dispensaries .56 .19 .53 .143 .52 .37 .48 .47 .49 .51 .50
Y=ily Welfare Planning Centers .08 .08 .07 . .03 .05 .04 - - - .01Supply of Milk to School Children 6.04 2.65 1.9 8.79 7.25 16.A2 14.23 6.89 3.15 3.87 5.65Statutory Contributions to
Gov't Med. Instit. 4.57 5.61 5.22 4.58 5.08 3.28 3.47 3.48 6.55 5.70 3.73Miscellaneous .63 .61 .62 .45 .147 .43 .44 .31 .37 .39 .43Provident Fund Charges 1.24 1.23 1.31 1.03 1.01 .89 .93 .68 .48 .51 .54Deot Charges 15.71 17.68 13.6 10.61 9.58 11.81 10.014 8.17 9.34 8.09 7.98
Source. BM Annual Accounta
Table 90: SELECTED INDICATORS OF THE LEVEL OF PUBLIC HEALTH - SERVICES IN BMC
1962 1963 166 1967 168 1970 1971 1972
Current Expenditures per Capita (Rs) by EMC 7.68 8.67 8.61 11.61 12.09 15.00 15.49 19.97 18.58 19.42 21.95
Number of beds in Greater Bombay 10,1042:/ 13,5402/
Number of beds provided by EMC 3,21 3,327 3,490 3,588 3,762 3,921 4,136 4,729 5,019 5,323
Number of beds per '000 people 2.26 2.53
Number of beds par '000 people provided by BIC 0.72 0.72 0.73 0.72 0.73 70.73 0.80 0.82 0.84 0.86
Number of beds per in patientsprovided by W4S 0.0159 0.0108
Patient/Medical Staff *
1. Hospital
rtal 536 1,138
Medical Staff 1,907 3,622
2. Maternity Homes
Tot al 369 311
Medical Staff ** 1,334 1,073
3. Dispensary
Total 16,674 24,433
Medical Staff 64,346 88,520
Source: Greater Bombay Development Plan 19642 Source: Maharashtra Statistica. Abstraut
Excluding medical collegesDoctors and nurses
Solirce: Bit; Staff
-239-
Table 91: PULIC HEALTH DEPARTMENT - SELECTED STATISTICS - BMC
Type of Service 1963 1972
1. Hospitals
A. General HospitalsNumber 4 7Number of Beds 196 88Number of Patients
-- indoor 75,358 294,07-- outdoor 811,100 3,048,294
Total 886,458 3,342,368
B. Special HospitalsNumber 4 4 4Number of Beds 1,202 1,678Number of Patients
-- indoor 25,078 55,937-- outdoor 70,803 201,916
Total 95,881 257;853
C. Staff (General and Special Hospitals)-- Doctors 141- 298-- Nurses 374 696-- Other 1,317 2,170
Total 1,832 3,164
2. Maternity HousesNumber 13 24Number of Patients
-- indoor 32,027 65,935-- outdoor 136,111 216,201
Total . 168,138 282,136
Staff-- Doctors 21 42
Nurses 105 221-- Other 330 643
Total 456 906
3. DispensariesNumber
Number of Patients Treated 621 107New cases 1,486,722 2,908,102Attendance 5,019,011 10,799,402
Staff-- Doctors 73 118-- Nurses 5 4-- Others 223 320
Total 301 442
. 4. Family Planning CentersNumber 32 52Patients Treated 4,001 -
Staff ) Were conducted-- Doctors ) by the staff as at 105-- Nurses ) Item No. 2 above-- Others ) until 1966 123
Total 228
1/ Including 7 mobile dispensaries.2/ Including 15 mobile dispensaries.
Source: BMC Staff
- 240 -
facilities. -The daily average number of in-patients has remained regularly
above the number of scheduled beds (see Table 90.) and the average stay of
in-patients has increased in all three hospitals. Furthermore, the patient/
staff ratio in these hospitals run by the Department of Health more than
doubled between 1963 and 1972 and, based on the medical staff only,
t increased from 1,907 in 1963 and 3,622 in 1972.
The Corporation is not the sole supplier of hospital facilities in
Greater Bombay. Four hospitals are administered directly by-the Government
of Maharashtra. A number of hospitals are operated by other government and
semi-government institutions, e.g. the Railways and the Bombay Port Trust.
The role of the private sector is not negligible, 'toug .i ua] yseres Higher
income groups. The share of in-patient medical care provided by the
Municipal Corporation can be estimated for the years 1963-6 and 1969-70. A
survey made for the Development Plan of Greater Bombay in 1964 on government
and municipal establishments and large private institutions shows a hospital
bed total of 10,104 in Greater Bombay, or 2.26 beds per thousand inhabitants.
Of this total, about 30 percent were accounted for by municipal hospitals.
This position does not seem to have changed. In 1969-1970,2/ medical facilities
available through public and public aided institutions amounted to 125 general
hospitals, ten tuberculosis hospitals, and clinics, with the total number of
beds in all institutions being 13,540.
1/ Some are partially subsidized by the Corporation.2/ Statistical Abstract of Maharashtra State 1969-1970.
- 2b.1 -
d. Dispensaries Dispensaries usually perform activities which differ
from services provided in general hospitals. However, in order to relieve
the general hospitals of heavy patient loads, 14 municipal general
dispensaries were upgraded to provide facilities for screen-routine
laboratory investigations. A standard dispensary consists of several rooms,
is under the supervision of one doctor, and is organized to work either on
a part-time or a full-time basis.
The situation regarding dispensaries is very similar to that of
hospitals. In spite of an increase in the number of dispensaries from 62
to 107 between 1963-1972 (of which 15 are mobile units), and a resulting
decrease in the number of inhabitants per dispensary, the number of patients
per dispensary increased from about 81,000 to 100,000 causing the patient/
staff ratio to deteriorate.
e. Maternity Houses Maternity and child welfare services are rendered
through 24 maternity houses and 34 maternity and child welfare centers.
Hospitals are also equipped with maternity services. The total number of
maternity beds was 895 in 1972. The .situation has since improved in that"
the number of people served per maternity house, as well as the patient staff
ratios, decreased during the period under consideration.
f. Cemeteries In all, there are 177 cemeteries in Greater Bembay. Of
these, 20 are municips; r,7naged and all expenditures related to them are borne.
by the Corporation. The Corporation provides amenities at five other cemeteries,
while the rest are managed by private trusts or bodies...An electric crematorium was
- 2L2 -
constructed in 1954 at Chandanwadi at a cost of Rs 450,000. This is used
for cremation without any distinction of caste and creed.
The charges for cremation are Rs. 25 per adult and Rs. 12.50 per child
below 12 years of age. Current expenditures on cemeteries are shown in
Table 92.. . . . . .
g. Census Function The Department of Health is in charge of registering
bizths and deaths occuring.. in.Greater.B.Rba. Thi. informati on. ia-collected
at the ward level by the Ward Officers of Health.
2.: Budgetary Position of Public Health Services
Expenditures and incomes on these activities are part of the General
Revenue Budget (Budget A) and are shown under 2 budget heads: Head V, called
"Public Health Department", deals with all activities other than those related
to the medical institutions, and head VI, "Medical Relief and Education."
No significant income was directly derived from the provision of these
services since they are rendered free of charge.
Current expenditures on health expenditures have increased at an
annual compound rate of 15.2 percent, which is well above the average rate of
growth of all BM expenditures (Table 93). Expenditures on health S-rvices
represent a substantial proportion bfenditures, approximately 12 percent in
1971-72 when expenditures on transportation and electricity are excluded.
As a result, if measured on a per capita basis, public health expenditures
increased by over 2.5 times, which indicates a substantial increase in real
terms and suggests an increase in services provided.
A ~- 2b.3 -
Table 92: CURRENT EXPENDITURES IN CMETERIES(Rs)
CurrentE=nenditures
188,826
1963-64 204,494
1964-65 287,191
1965-66 360,653
1966-67 417,498
1967-68 527,380
1968-69 586,730
1969-70 64,848
1970-71 778,270
1971-72 885,880
1972-731/ 963,980
1/ Budget estimate
Source: BE Annual Accounts
Table 93: CURRENT EXPENDITURE ON PUBLIC HEALTH SERVICES1962-1972(Rs '000)
1962-63 1963-64 1964-65 1965-66 1966-67 1967-681/ 1968-691 1969-70 1970-71 1971-72 1972-73
General Supervision 2,013 2,203 2,226 2,664 2,848 2,760 3,243 .4,065 3,786 4,090 3,936
Epidemics 712 666 85Z 1,473 1,690 1,717 2,207 3,234 3,077 3,415 3,525
Vaccination 308 328 331 422 571 712 876 845 723 703 1,342
Malaria and Insecticides 1,663 2,974 2,249 3,038 3,385 3,654 4,151 4,892 5,541 5,855 6,485
Filonia Night Clinic - - - - - - - - 000 215 325
Hospitals 16,395 18,489 21,761 29,512 32,307 37,678 41,976 51,504 61,864 67,987 81,699
Maternity Houses 1,145 1,579 1,553 2,224 2,273 2,817 3,267 4,694 6,053 7,240 6,269
Maternity and Childrens'Welfare SeXvices 79 83 89 168 118 109 128 137 141 154 241
Dispensaries 1,236 1,419 1,522 1,792 2,108 2,283 2,545 3,135 4,048 4,204 6,495
Mobile Dispensaries 184 192 211 241 313 284 396 426 529 587 683
Family WelfarePlanning Centers 27 31 27 24 18 36 36 000 000 000 12
Supply of Milk to School
Children 2,000 1,026 759 4,899 1 4,365 12,723 11,810 6,259 3,368 4,482 7,686
Statutory Contribution toGovernment Medical Inst. 1,512 2,174 2,082 2,552 3,057 2,541 2,881 3,164 7,017 6,612 5,069
Miscellaneous 207 236 248 251 281 331 368 462 393 447 587
Provident Fund Charges 410 477 521 576 611 693 775 618 510 589 730
Debt Charges 5,196 6,847 5,420 5,916 5,769 9,150 8,332 7,422 10,003 9,382 10,842
Total 33,087 38,724 39,851 55,752 59,714 77,488 82,991 90,857 107,053 115,962 135,126
1/ Based on Budget Estimates.
2/ Actual was Cr. 242.
3/ 000 means less than 1,000 Rs.
Source: BMC Annual Accounts
Expenditures on hospitals represent by far the single largest
component of the public health budget with a relative sahare of 60 percent
in 1972-73 (Table 93), and with a very rapid annual growth rate of 18 percebt.
A comparison between the municipal,expenditures on public health and
hospitals, and the expenditures incurred by the State Government' on the
same items in Greater Bombay, shows the level of municipal spending to be
five times higher. The relative share held by Government expenditures on
hospitals is substantially higher although it has declined from 43 percent
in 1969-1970 to 34 percent in 1972-73.
B. Welfare
The responsibilities for welfare are vested primarily in the
State Government which runs 40 welfare centers in Greater Bombay. The
involvement of the Corporation is limited in scope as well as in terms of
expenditure. Current expenditures on welfare account in 1971-72 for 0.1
percent of total current expenditures incurred by the Corporation. These
activities are directed toward two specific categories of people: municipal
employees and, to a minor extent, poeple located in the slum areas which
have been taken up for improvement by the Corporation. This latter type
of relief accounts for less than 2 percent of the total relief dispensed
in 1971-1972. The kind of relief provided to the municipal employees includes
the operation of welfare centers, medical help, scholarship schemes for
municipal employeest children attending primary and secondary schools, and
special workers? teacher's course for municipal employees themselves. In
slum areas, it consists exclusively of the operation of welfare centers and
nurseries.
1. Welfare Centers and Nursery Schools
Forty-three welfare centers and two nurseries are operated by the
BM. Of these 43 centers, 41 are part-time while the others are operated on
a full time schedule. The part time centers and the nurseries are conducted
for the benefit of the municipal employees and their family members, and all
but ten are conducted for conservancy staff. Of the remainder, seven are
for water works employees and one for work shop employees. The welfare
centers are scattered all over the city, suburbs, and extended suburbs. The
two full-time welfare centers are conducted for the public of the Kamathipura
and Sewri areas. Their activities consist of indoor and outdoor games, radio
listening, sewing and handicraft work for women and girls, film shows,
fabrication work (petticoats and arm-bands) and various group activities
(excursions, band classes, scouting and guiding, for example).
Forty children attend each nursery schoold Snacks are supplied
free of charge and no fees are charged.
2. Scholarships
There exists a scheme for granting scholarships to children of
municipal employees under which Rs. 120/- and Rs. 00/- are
awarded to the scholars obtaining 50 percent marks in secondary education
and second class in college education respectively. Any nimber of children
of a municipal employee, irrespective of his pay, are eligible for these
scholarships. During the year 1971-72, the Corporation spent Rs. 776,000 on
this scheme. Another program is directed toward the children who are not
covered under the above plan. Under this scheme, only one child of the
mu7icipal employee whose pay is at most Rs 150/- is awarded a scholarship
of Rs. 60/- per annum for secondary education and only one child of the
employee whose grades are at least 50 percent is awarded a scholarship of
Rs. 150 per annum for college education. Under this scheme, 293 scholarships
for secondary education and 186 scholarships for college educatLon were
awarded at a total cost of Rs. 45,480 during the year 1971-72.
3. Health and Housing
Employpes suffering fran tuberculosis, cancer and other major
ailments are given financial assistance for purchasing medicines for
expenses associated with special diets, and for hospitalization costs.
Special counters are opened at various hospitals for municipal employees
for getting quick medical help. Also, 12 dispensaries are kept-open in
the evening exclusively for municipal employees and their family members.
The employees of the essential service departments such as
conservancy and water are provided with free quarter. Nearly 60 percent
of conservancy labour staff are housed in municipal tenements.
4. Budgetary Operations
Expenditures on welfare are difficult to extract from the budget
document. Current expenditures on activities involving benefits to municipal
employees are financed from two special funds which are attached to budget A
and those relating to slum dwellers are met fran budget B (see Table 94).
The special funds are the Welfare Fund and the Fines Fund. The charges to
be met out of Welfare Fund are:
(1) Expenditure to be incurred for municipal departmnts.
(2) Expenditure to be incurred on scholarships for the children
of municipal employees.
Table 9: CURRENT EXPENDITURES ON WELFARE BY BUDGETS AND BY MAJOR ALLOCATIONS - BMG
1961-62 1962-63 1963-64 1964-65 1965-66 1966-67 1967-68 1968-69 1969-70 1970-71 1971-72 1972-7311. Budget A
Charges to be Met out of Welfare Fund
(1) For Municipal Departenta 3,486 5,018 4,008 5,641. 9,268 10,043- 15,245 5,818 6,882 14,105 15,800 24,550
(2) For Scholarships Scheme 17,655 14,087 17,941 11,691 20,037 8,172 16,948 14,360 12,876 15,98? 12,060 40,000(3) For Medical Help 19,830 19,967 19,995 19,990 18,450 19,968 17,890 16,754 9,160 16,160 23,340 40,000
(4) For Special Worker's Teacher's Course - - - - 107 962 4,544 6,476 7,747 1,772 4,512 10,000(5) For Scholarships to Children
in Secondary Schools - - - - - - 311,174 285,376 359,759 403,895 500,000
(6) For Scholarships to Children in College - - - - - - * 270,678 276i,820 346,903 372,601
(7) Others - 15,000 - - - 12,000 - 1,800 - - 50,000 -
Total 40,971 54,072 42,941 37,272 47,862 51,145 54,627 627,060 598,861 754,686 882,208 1,014,550Charges to be Met out of Fines Fund 129,383 122,106 147,370 179,582 192,406 218,057 233,898 248,603 228,769 274,212 298,396 388,71C
IT. Budget B
Community Welfare Centersand Nursery Schools - - . . . . ' 9a89 7.803 7 ?7 11,900
SchemL for Urban Counmunity Development - 474 3,323 11,375 11,432 1.0,915 10,925 12,169 12,801 14,856 12,246 16,000
Grand Total 170,354 176,652 193,634 228,22? 251,700 280,119 867,220 899,,150 849,620 1,051557 1,21,977 1,431,160
1/ Based on Rudget Estimates
Source: BIC Annual Accounts
(3) Expenditures to be incurred for medical help to the municipal
employees.
(4) Special Worker's Teacher's course for municipal employees.
(5) Expenditure to be incurred for scholarships to the children .of
municipal employees in secondary schools.
(6) Expenditure to be incurred on scholarships to the children of
municipal employees studying in colleges.
(7) Ad hoc grant to BM Sports Club.
(8) Grant in aid to BM Staff Cooperative canteen.
Charges to be met out of Fines Fund are mostly maintenance and incidental
charges of the labour staff at various 8ocial welfare centers.
All expenditures regarding slum dwellers, with the exception of
capital expenditures, are recorded in Budget B, General Account of the Slum
Improvement Account and the Slum Clearance (City). In the first account,
this is recorded under budget head "Community Welfare Centers and Nursery
Schools," and in the second one under tSchemes for Urban Community Develop-
ment (Staff and Contingencies)."
The rationale of recording current expenditures in special funds
can only be exp"lained in terms of statutory requirements. The Corporation
is required to maintain special funds whose resources are to be allocated
to welfare activities regarding municipal employees. In addition,to their
own resources, these funds are financed by contributions from the general
revenue budget. The welfare fund receives contributions from the Municipal
and the BEST budgets, while the Fines Fund receives contributions from the
municipal budget. These contributions constitute the main source of revenues
for the special funds (see Table 95).
Capital expenditures are recorded in Budget A on the
basis .of employment of the municipal employees, i.e. capital expenditures
on staff quarters and welfare centers open to municipal employees are
allocated to the departments employing the beneficiaries. For example,
expenditures on staff quarters for conservancy staff will be-recorded under
budget heading VII, IStreet Cleansing, Conservancy and Halakhore Service",
of-the loan works budget attached to budget A. Capital expenditures on welfare
centers located in the slum areas are recorded both in the capital accounts
of the Slum Improvement budget (first of the three accounts constituting
budget B) and in the slum clearance budget (City, Suburbs and Extended
Suburbs). Since the loan works budgets and the capital accounts are presented
on a project basis, these items must be separated from other projects.
Expenditures on welfare centers are small because of the relatively
minor involvement of the Corporation in this field, and thus computation was
not attempted here. On the other hand, expenditures on staff quarters are not
negligible, and are presented below.
5. Welfare BEST
The BEST administers sane programs in its welfare department, but
only for its employees. The major activities are the operation of canteens,
the provision of staff quarters, and various scholarships and monetary
Table 95: WELFARE ACTIVITIES - FINANOING OF CURRENT EXPENDIfURES - BMC
1963-64 196h-65 1965-66 1966-67 1967-68 1968-69 1969-70 1970-71 1971-72 1972-73
Total Current Expenditures
-- Budget A 190,311 216,854 240,268 269,202 288,525 875,663 827,630 1,028,898 1,180,604 1,403,260
-- Budget B 3,323 11,375 11,432 10,915 10,925 12,169 21,?90 22,659 20,373 27,900
TOTAL 193,634 228,229 251,700 280,117 299,450 887,832 819,620 1,01,557 1,200,977 1,431,160
Financed by:
-- Contribution from B 'A' 198,388 207,824 24,j49 262,944 283,889 869,496 816,212 1,021,102 1,176,527 1,403,260
-- Contribution from BEST - - - - - - - - - -
Current Deficit/Surplus +4,754 -20,405 -6,241 -17,173 -15,561 -18,336 -33,408 -30,655 -24,450 -27,900
Source: .BIC Annual Accounts
*1 i
assistance to.the children of the employees. This department supervises 16
canteens and 9 kiosks, most of which are entrusted to private contractors.
The undertaking provides furniture and heavy equipment for all the canteens
run by contractors and bears 50 percent of water and electricity charges.
The BEST awards scholarships to employees' children. The yearly assistance
earmarked for this purpose was Rs 80,000 beginning in 1970-71. The maximuim
amount paid to each student was Rs. 25 per month for post-secondary studies
and Rs 10 per month for secoridary education. Monetary asistance, in
addition to scholarships, is also provided. The maximum amount of monetary
assistance paid to each-student per month is Rs. 12.50 for post-secondary
studies and Rs. 5 for- secondary education. Finally, the BEST provides
houses at subsidized rent to about 2500 employees and 120 dormitory-type
accommodations for bachelors at various places. Altogether the BEST
spent an amount of over Rs. 220 thousand on its various welfare activities
during the year 1971-72.
X* HOUSIM
The Municipal Corporation operates two housing programs. The
first is designed to provide housing quarters to municipal staff employed
in special activities, e.g. medical staff, firemen, street cleaners, and,
to a lesser extent to general staff. The second is a slum dweller and
squatter program consisting of rehousing after slum clearance"and the prcvision of
basic infrastructure in slum areas. There are also two smaller programs
which provide accommodation for persons ovacuated from their houses because of
municipal works or because of maintenance of Bombay Improvement Trust
properties. In the latter case, the program is essentially provision of sites
and services. In addition,the BEST Undertaking provides employee housing
accommodations.
The most important of these activities is the slum clearance
program, and primary attention here is focused on that program.
A. Present Housing Conditions
Prior to World War II, housing shortages in Bombay were not serious
with the exception of a short period following World War I. By the beginning
of World War II there was an oversupply of dwelling units for middle class
residents.
The situation changed after the beginning of World War II,
primarily because of rapid population growth and little increase in the housing
supply. The latter was in large due to scarcity of building materials ad .
restrictions on building activity imposed by the State Government. The overcr'owding
continued to grow even after the exid of the war, and was worsened considerably
by the influx of refugees in 1947-48. Rents were then frozen to pre-war
levels under the Rent Control Act. Rent control, coupled with high prices
of materials made it prohibitive for most landlords to carry out normal
repairs to thbir buildings and maintain them in satisfactory condition.
The situation gradually worsened since many buildings had by then outlived
their useful life and were beyond economical repairs. However, their
continued use was necessitated by the acute housing shortage.
Until recent years, the private sec_t6i remained the major supplier of
housing. However, high prices of land and building materials, shortages
of construction materials, a rising wage spiral, and unattractive eturns on
housing investments have had adverse effects on participation by tte private
sector. The result is that the gap between the demand for, and supply of,
new housing is widening, and private investment is now primarily for high income
housing. Conversely, the public sector and cooperative and employee housing
programs are playing an increasingly important role in the provision of
housing. The State Government operates through a semi-autonomous public
agency, the Maharashtra Housing Board (M), to provide industrial housing
and subsidized low-incame housing. the MEB also administers several other
schemes covering both the high and low-income groups on a tenant-ownership
basis, using surpluses from the high income scheme to finance lower income
programs.
Cooperative housing societies, with the encouragement of the
Government, are growing in importance and may eventually replace the private
sector as the major supplier of housing.
Present residential construction activity is not suf±icient even
to accommodate the natural increase in population. Overcrowding in the
existing buildings, slum areas, and continuing physical deterioration of
the housing stock is a fair description of the present situation. The
BMD Act (section 379A) lays down a standard ;or 11crowding'?--a minimum
occupancy rate of 25 square feet per person. Using this standard, the
Corppration carried out in 1956 a survey of old buildings in the City to
determine the extent of overcrowding in slum areas. The results show
that about 25 percent of one and two roan tenaments in these areas are
"overcrowded" (see Table 96 ). However, the low occupancy rate assumed and
the limited coverage of the survey probably work to vastly understate the
actual extent of overcrowding.
Some BM and State officials felt that an occupancy rate of 45
square feet per person would be more realistic for purposed of determining
over-crowding. Using this standard, the estimated number of existing
tenements, an c:cupancy rate of the number of family units to be provided
for, and sane rough assumptions, an estimate of the housing defeat was
made in conjunction with the preparation of the Development Plan for Greater
Bcmbay in 1964. The results in terms of tenements required to eliminate
over crowding and substandard (hutments) dwellings are summarized in Table 97.
Slum areas are substantial,-are scattered throughout Bombay, and
appear to be growing in number and in population concentration. A general
pre-war survey of the blighted areas in the City was made wherein 85
localities measuring 330 acres were designated as slums. A similar survey
carried out in the year 1956-57 revealed that the City had 144 slums
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Table 96: CONDITIONS OF OVERCROWDIG IN TENEMENTS (CITY)
No. ofTotal No. of No. of over- No. of 2- over-
Ward one-room crowded Percentage room crowded PercentageTenements tenements tenements tenements
A .,.482 1,077 24.03 1,132 77 6.80
B 10,478 1,702 16.24 1,894 '44 2.37
C 26,655 4,301 16.15 7,345 242 3.29
D 21,013 5,559 26.35 6,579 - 343 5.21
E 30,649 9,799 32.04 2,999 322 10.74
F 8,250 3,527 42.75 534 42 - 7.87
G 30,045 12,14 40.58 3,746 469 12.52
Total 131,662 38,149 28.97 24,229 1,539 6.35
Source: BMC Staff
Table 97: REQUIR NTS OF ADDITIONAL TENEMENTS TO ELIMINATE OVERCROWDING
TenementsTenements existingrequired as on Deficitin 1961 31 Mar. 1961
City 553,800 438,491 115,309
Suburbs 207,200 193,013 14,127
Extended Suburbs 68,800 67,646 _1,156
Greater Bombay 829,800 699,148 130,652
Source: BMC Staff
spread over a total area of 877 acres in different wards with a total number
of 83,451 families and a population of 415,875, (see Table 98). At present,
the number of slum areas is estimated to be approximately 200, and estimates
of the slum population range up to one million.
A recent survey on the age and conditions of the city-buildings,
indicated that of the 36,000 residential buildings in the City, nearly
half had been built prior to 1905. The balance of 18,150 buildings were in
comparatively good physical condition. Excluding 2,797*temporary sheds,
it was found that_ 90 percent of the buildings had timber frames, of which
more than one half had external load bearing walls. The survey then listed
43 percent of-the buildings as being-.in "poor condition*-1fnaMrng-
764 recommended for immediate demolition. Of these 12,000 buildings, about
60 percent were estimated as having a future life of less than 25 years.
Under these circumstances, house collapses are not an uncommon phenomenon
in Bombay (see Table 99). In summary, the total housing requirements of
Greater Bombay projected from the 1964 Development Plan estimates amount to
nearly one million tenements by 1981 (see Table 100).
B. BMD Programs
1. Employee Housing
Little information is available on the number of employees who
are provided with housing accommodations by the BIC. It is claimed that all
firemen, (about 600 employees),'43 percent of conservancy staff, and a
smaller proportion of the employees of the Public Health and Water.Supply
Departments are provided with housing quarters. Unfortunately, it is not
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Table 98: THE PRE-WAR AND SLUM AREAS CF THE CITY IN 1956-57
Area of AreaNo. of pre-war No. of of slums
Ward.' pre-war slums of slums in acres
slums in acres 1956-57 1956-67
A 2 5.8 7 20.60
B 10 11.8 20 22.80
C 33 29.0 24 90.50..
D 24 40.6 27 77.00
E 3 32.0 24 125.70
F 9 60.0 18 91.80
G 4 158.3 2 448.60
Total 85 329.5 144 877.00
Source: Development Plan for Greater Bombay, 1964.
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Table 99: HOUSE COLLAPSES IN BOMBAY FOR THE PERIOD 1960-1971
No. ofPersons Accom-modated in
No. of MaharashtraPersons Housing Board
Directed for TenementsNo. of Houses Accommodation Taken
Collapsed No. of No. of in Maharashtra Over or in(Partly or Persons Persons Housing Board Municipal
Year Flly) Injured Killed Colonies Colonies
1960-61 115 69 21 - -
1961-62 131 54 8 - 210
1962-63 99 70 12 - 1,024
1963-64 136 63 26 - 658
1964-65 117 68 6 283 -
1965-66 130 26 18 350 -
1966-67 97 68 11 251 -
1967-68 98 82 37 410 -
1968-69 143 54 11 309 -
1969-70 130 65 18 1h7 -
1970-71 169 86 25
Source: Bombay Building Repairs and Reconstruction Board. Annual Report 1970-71.
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Table'100: REQUIMENTS OF TENMENTS TO MEET THE HOUSINGSHORTAGE .
Additional Tenements Required
Cause 1961 1971 1981
(1) Natural increase 310,200 582,200
(2) Over-crowding 130,652 130,652 130,62
(3) Sim Clearance and House Collapse 75,000 150,000
(4) Development Plan Proposal 1,091 28,182
(5) Zoning and acquisition of set backs 10,000 20,000
Total 130,652 539,943 911,03
Source: Same as Table 99
261-
possible to present an overall picture at the present time. About 470
tenements -ere completed during the year 1971-72, The BEST provides
housing to about 2,500 employees or about 12 percent of its labor force.
It is difficult, if not impossible, to trace'the expenditures
incurred by the BMC for employee housing directly from the budget. There
is no separate record of expenditures on this type of program; rather,
the various departments of the BIC which provide housing quarters_for.their employees are simply billed. Furthermore, the basis of this billing
procedure is not clear, since it seems that land costs are not included
in the allocations of expenses among the departments. Land acquisitions
are made on a centralized basis and are usually recorded under one Budget
Head 'Budget Head 10, "Building Acquisition and Management." On the revenue
side, the same procedure applies with the various beneficiary departments
being credited with the income from rents; but, the budgetary accounts do
not facilita-anianalysis of these revenues. Given all these restrictions,
it was not possible to estimate to al resources allocated-to--mpdyee housing.
Expenditures incurred by the BMD, excluding the BEST, were tentatively
estixated for the year 1971-72 at about Rs 250,000 which represents a small
fraction of the loan works budget of the BIV. This amount certainly under-states the role of the DED in this area, but it is not expected to present
a significantly distorted overall picture of the housing programs carriedout by the BMC in favor of its employees. The BEST reported in 1971-72,
expenditures on training including expenditures on buildings used for
administrative purposes of Rs. 1.8 millions, or 4.8 percent of its total loan
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works budget. Altogether, this program of the BM does not contribute
significantly to an easing of the housing shortage in Greater Bombay, as
recommended by the City Coordination Council in 1964. Specifically, its
recommendations were that every statutory authority in Bombay should
provide, annually, housing for 2 percent of its total employees.
2. Slum Housing
Housing activities in slum areas consist of a rehabilitation program
of already existing slums, a slum eradication program, the provision of
housing accommodations to people displaced by municipal works, and the
maintenance of the properties formerly owned by the BIT, which comprise
mainly sheds. The last program has been in existence since 1933 when the
BIT was taken over by the Manicipal Corporation. The first was devised in
".956 with the assistance of the Governmeit of India. Due to financial
constraints, the implementation of this program did not bring the expected
results and as a consequence, the BMC developed a Slum Improvement Program,in te
late 1960s. At the present time, both programs are carried out by the BM,
with the emphasis being placed on the latter
All programs pertaining to slum areas are recorded in one major
budgetary account. Budget B was established when the BIT was taken over
by the BIC, and was expanded to include the Slum Clearance and the Slum
Improvement programs. This budget is divided into 3 sub-accounts, which in turn
each consist of a current and capital account. This can be represented
as follows-
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Components of Budget "B"
1. - Imppovements Scheme
(a) General Account. Revenue and expenditure related tothe BIT properties and the Slum Improvement Program.
(b) Capital Account. Revenues and expenditures related tothe BIT properties and the housing of squatters anddishoused people.
2. Slum Improvement Scheme. Slum Clearance (City)
(a) General Account
(b) Capital Account
3. Slum Improvements Scheme. Slum Clearance (Suburbs andExtended Suburbs).
(a) General Account
(b) Capital Account
The BIT was originally an autonomous agency operating within the
City for the construction and maintenance of tenements for low and middle
income workers. These tenements are mostly chawls and more than 5,ooo are
currently administered by the BMC. No information on the number of dis-
placed people provided with housing accommodations is available,but it is
claimed to be relatively insignificant.
These inprovement schemes have never been developed as a major
activity of the Corporation. Expenditures account for an insignificant share
of all expenditures incurred by the BI in 1971-72. The largest proportion
of these expenditures is now accounted for by current expenditures and the relative
share of the capital works in all expenditures has declined from about 35 percent
in 1962-3 to 9 percent in 1972-73.
-264~
Current expenditures are financed by rents and other proceeds from
properties, by transfer from the general revenue budget (Budget A), and by
a grant fram the State Government. The grant allocated by the Government
to Budget B is a deficit grant designed to cover ar deficit incurred in this
account, up to a limit of 1 million rupees.1/ This grant was given in
1964-65 and from 1966 to 1969. It has never represented a substantial
source of revenue; 'The largest contribution was in 1964-65 _at ab6ut 6
percent of total revenues. Until 1967-68, the revenues generated by the
program operations were sufficient to cover about half of current expendituree--
the remainder being financed form general revenues. Revenues fram the
properties have not kept pace with the increase in expenditures, however,
and now represent about 38 percent of total revenues. Revenues frm rents
are especially low since the current rents are based on rents which were
paid in the past to the former owners. Also, the properties usually
consist of very old buildings. The rents were established at 6 percent of
the value of the land, which is considerably lower than the current value.
The contribution from the general revenue budget is statutorily 2/ fixed -it- (an
estimate of) three times the amount of the net demand (including arrears
and payments in advance) of the general rate of the property tax in the
current fiscal year divided by the rate of the tax. The amount of this
contribution is thus directly proportional to the property tax base but varies
inversely with the rate of the tax. Whether the amount of this contribution
1/ Up to 1937-3d, the BMX was paid a grant equal to the net proceeds from
the Tobacco duty realized under the Tobacco Duty (Town of Bombay) Amendment
Act, 1932. The Government has since decided to change this batIs and to
pay in lump-sum a fixed amount irrespective of the gross receipts
realized from the tobacco duty and the arrears of the last years.
2/ Section 125(2)(d) of the BITC Act.
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is actually based on this f=rmula is not easily determined since information
on the net demand of the general property tax is not readily available.
However, the contribution increased by 264 percent between 1964-61
and 1971-72 while the rateable value of Greater Bombay increased by only
61. percent--which is an indication that transfers have taken place on a
larger scale than is required in the statute. In fact, reliance on general
revenues has increased since revenues generated by this program have became
insufficient to finance the increase in current expenditures. Another possible
source of revenue is transfers from the Capital Account of this scheme,
but such transfers from the capital account took place during only three
years of the period under study.
Capital expenditures on the Slum Improvement Scheme show a marked
decline from about Rs. -7 million in 1962 to less than Rs. 3 million in
1971, indicating that the Corporation is moving away from this type of program
in favor of slum rehabilitation. Capital expenditures are financed from
proceeds from sale of lands and buildings, transfer from the General Account
maintar-Ined above, and borrowing. Investments are thus in part financed from
current revenues; this is a noticeable exception to the strategy adopted by
the BMC with regard to the financing of its capital projects. As a rule,
all municipal capital works, with the exception of .some of the BEST's works,
are financed from borrowing. However, since this scheme is treated as a
1/ The choice of these years is attributable to the fact that rate of
the general property tax was increased in 1963-64.
- 266 -
separate entity in the Municipal Budget, transfers between the two types
of accounts are used to meet deficit in either account whenever the
necessity arises. Until 1969, the majority of capital expenditures were
met from loans. Since then the policy has been revised so as to increase
the relative share of the general revenue budget. Sale proceeds fran
lands and buildings have never represented an important source of
capital revenues.
3. Slum Clearance Program -- -.
This program was established in 19IM and consists of demolishing
properties in certain slum areas and constructing new tenements at the
same site. For that purpose, the BMD Act was amended in 1954 to incorporate
special provisions relating to slum clearance. Clearance under the amended
provisions is achieved by either one of the following methods:
(1) Declaration of the area as a clearance area: Such areas are
selected where the only effective remedy for improving the conditions is
the demolition of all buildings which--are unfit for human habitation. Clearance
of the area is secured either by: (a) ordering the demolotion of the buildings
in the area by the owners themselves; or (b) the acquisition of the entire
area by the Corporatinn. The latter procedure is preferred by the Corporation
since it usually requires land to rehabilitate the displaced persons.
(2) Declaration of an area as a Redevelopmenb Area: The basic -
conditions laid down for the application of this scheme to an area are
the following: (a) the declared area must presently contain 50 or more dwellings
of poorer class cities of Mhich one=third must be overcrowded or unfit for
hbbn-haitation and notbe aenaffble-to economic renovati6n; (b) the
-267-
redevelopment of the area as a whole is necessary in order to provide housing
accanmodation.for the poorer classes. The clearance and redevelopment of
the area must necessarily follow a redevelopment scheme which is prepared
by the Corporation and then sanctioned by the Government.
By 1972, 572 residential tenements and 142 shops and godowns were
constructed under this program. Of this total, 669 were built under a
Municipal Scheme and the teiinder under various government-aided schemes.
The Municipal scheme came into existence in 1956 and was used until 1963.
From 1959 onward, government aided schemes were used. The construction
activity under this program has leveled off substantially since 1965. The
program is now being abandoned due to various technical difficulties in its
implementation, and to financial constraints. The procedure through which
hethesalearance schemes- are -processed is very lengthy and time-consuming.
Also, the implementation of these schemes requires the availability of open
spaces near the sites which are being cleared in order to provide housing
accommodations to displaced people, and to install transient camps while
the work is under progress. The City has very few if any open spaces left
and there is considerable reluctance of the slum dwellers to shift to the
surburbs even on a temporary basis. Furthermore, any major new program
would necessarily have to be confined to the suburban areas. Experience
has also shown that very often transit arrangements were not coordinated
(or not provided) with the clearance of the slum. Axother major
problem is the inability of slum dwellers to pay -he subsidized rents.
The monthly rent per unit with an average floor area of 240 square feet is
fixed at Rs.26 -27, but the economic rents are much higher.
-268-
.'The cost of this program is quite high. A rough approximation
based on the expenditures incurred and the number of tenements constructed
in the 1962-1971 period, shows a cost of about Rs. 14,500 per tenement--
which is much higher than the expected costs of a tenement designed for very
low-incane people. As a result, the differential between subsidized and
standard rent is wide--well over 40 percent in the majority of cases.
The actual cost is also much higher than the base adopted by the
government for the grant allocated to this scheme. Indeed, the government's
subsidy is based ona cost per tenement of Rs.8,750, including land. The
grant corresponds to 80 percent of this amount, of which 37.5 percent is con-
tributed by the Central and 12-1/2 percent by the State Government, with
the remainder being loan 'inance provided by the Government to the extent
of 37.5 percent of the basic cost. The data in Table 101 show capital works
carried out with various resources, and show about 42 percent of these
capital works to have been carried out from the Municipal Fund over the 1962-
1971 period. The Government aid, as presented in Table 101, includes both
grant and loan finance provided by the Government to the BMD. Unfortunately,
no information is available about the terms of the loans; and, it is
possible that an elennt of subsidy may be introduced by the availability
of government loans. It is interesting to note from Table 101 that the ald
formula has not been rigorously applied--grants account for about 42 percent
of all governmental aid as canpared to 58 percent on the basis of the formula.
Also contributing to the decline of the program is the partial
discontinuation of government financial assistance. No grant has been
allocated for this program by the State or Central Government since 1970.
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Table 101: SLUM CLEARANCE PROGRAM CAPITAL WORKS
(1) (2) (3) (4)Works Works
Carried Carried Ratioout from out with GrantsM:unicipal Government Total
Funds Aid 1/ Grants Govern-(Rs) (Rs) _ _ment Aid
1962-63 1,017,723 7,385,068 3,90,625 47.26
1963-64 967,737 3,925,658 1,605,600 40.90
1964-65 1,772,905 2,058,953 1,425,586 69.23
1965-66 4,O75,550 2,718,845 686,571 25.25
1966-67 4,917,720 2,312,207 1,986,839 68.62
1967-68 3,865,946 1,586,i46 1,062,6h7 66.98
1968-69 1,617,317 7739204 618,719 80.02
1969-70 355,277 990,323 115,808 11.69
1970-71 308,95 620,992 40,023 65.22
1971-72 123,530 3,589,027 - -
Period 1962-1971 19,022,300 25,960,723 10,997,418 42.36
1/ Includes grant and loan finance
Source: Information provided by the Chief .Accountant - BMC
- 270 -
Financial aid from the Central Government was budgeted in 1972-73, but
it is not clear that this grant was actually received by the BMC.
Summarizing the means of financing capital expenditures incurred
under this program, loan money is by far the largest source of revenue.
Two elements in the financing of these programs are of particular interest
(see Tables 102 and 103). First, revenues generated by the program have been
quite large since 1970. Second, general municipal revenues have been used
in the past to finance from 14 percent to 35 percent of,the .capital works.
Tables 104 and 105 describe the means of expenditure financing. An
explanation of Table_10 jay.clear the picture. It_can be seen.that the revenues
from borrowing indicated in this table are greater than those shown in
Table 102,which describes the means of financing capital expenditures. The
implication is that current expenditures are in part financed by loans.
However, this is not strictly so, since transfers are made from the capital
accounts to the general accountsY2/ These transfers were not recorded in
Table 162 since they do not represent exenditures on capital Wnrks. The
difference therefore represents the transfers
between these accounts. Since "Revenues from Borrowing" are computed as
the difference between total expenditures incurred and revenues received
from all other sources, they are recorded in this residual account. In
other words, part of current expenditures are financed from the capital
account. 3/
1/ Table 102 refers to "Revenue Surpluses," i.e. to transfers from theGeneral Account (or Current Account) to the Capital Account. Duringthese years, current expenditures were nearly in their totality financed
by transfers from the General Revenue Budget.
2/' The transfers are made from the Capital Account of Slum Clearance (City)to the General Account of the same program and from Capital Account-Slum
Clcarance (Suburbs and Extended Suburbs) to the General Account of that
Account. There is no transfer between the Accounts of the two areas.
3/ Appropriation from the capital to the general account from 1962 onward:
342,949; 575,385; 349,848; 956,867; 1,314,037; 4,835,982; 1,734,347;1,916,06; 2,383,433; 2,347,278.
Table 102: SLIM CLEARkACÈ PROCRM - EANS OF FINANCING CAPITAL EXPENDITURES -e
1962-63 1963-64 1964-65 1965-66 1966-67 . 1967-68 1968-69 1969-70 1970-71 1971-72
Total MC Expenditures 8,402,791 4,893,395 3,831,858 6,794,395 7,229,927 5,452,392 2,390,521 1,345,600 929,587 3,712,557
own evenue - - - 2,200 61,711 46,595 75,449 176,426 1,008,868 1,037,969
Ravenuc Surplus to 1,174,648 1,325,576 1,345,978 - - - - -
Exterr.i Aid
Cen.ral Goverrment 2,617,969 1,204,200 1069,189 439,928 1,190,129 801,985 464,339 86,856 - -
Sta.e Government 872,656 401,400 346,397' 246,663 396,710 260,662 154,380 28,952 405,023 -
T3tal External 3,490,625 1,605,600 1)425,586 686,571 1,586,839 1,062,647 618,719 115,808 405,023
Revenues fr=m Borrouling 3,737,518 1,962,219 1,06o,29
4 6,107,824 5,6143,088 4,389,745 1,771,802 1,229,792 524,564 3,712,557
Source: BW, Annual Accounts
8\
Table 104; SLUM CLEARANCE PROGRAM HEMS OF FINANCING TOTAL EXPENDITURES BMC
n(,2-63 1963-64 1964-65 2%5-60' 1966-67 1967-68 1968-69 1969-70 1WO-71 1971-72
Tot:,l Expenditures 9,705,517 6,830,312 5,850,026 9,257,718 9,917,914 9,176,295 6,i2o,o62 5,4o8,346 5,786,9% 8,98,355
Rents and other proceeds of propert:ies 844,950 9311,616 1,133,567 1,214,469 1,31&6,og& i,h64,45i 1,621,423 1,717.040 l,o8i,i86 2,370.L94
Sales proceeds of Inaid a id buildirgs - - - 2,200 61,711, 46,595 75,449 176,426 i,oo8,868 1,037,969
Interest and profits on investments 252,643 332,193 291,547 27,932 h23,47o 373o771 429,66o 392,701 428,026
Own revenue 84h,95O 1,18?,259 -1,465,760 1,508,216 1,435,741 1,934,516 2,070.643 2.323,126 2,482,755 3,836,489
Contribution from general revenue budget 1,289,h75 1,499,850 1,548,538
Total T14C revenues 2,134,425 2,687,log 3.01h,298 1,508,216 1,435,7111 1,934.516 2,070,643 2,323,126 '2M2,755 3,836,L89
External aid - grant from government
2,617,969 i,2o4,200 1,069,189 1.1-90,129 h64.339 86,
Central Government 439,928 801,985 856
State C3oveyruaent 8-12;656 401,400 356.397 246,643 396,710 26o,662 154,380 28,952 1105,023
Total External Aid 3,490,625 1,605,600 1,1125,586 686,571 1,586,839 i,o62,647 62.8,719 115,808 h05,023
Revenues from borrowing 4,080,467 2,537,603 i,hio,142 7,o62,94i 6,895,334 6,179,132 3,430,700 2,969,422 2i899,218 5,031,866
Source: B !C Annual Accounts
275
Expenditures on the Slum Clearance Program ave varie quite widely
from year to year, but have never accounted for allarge part of
expenditures urrently less thanone percent of total expenditures).
The largest source of revenue after loan finance., is revenues generated by
the program. Since !964-65, grants provided by the Goverment b-ave represented
a relatively low fraction. In summary, the program substantially benefited
from the government aid and contributions frcm the general reveriue budget
d ring the early stage of its implementation. In more eceit years, however,
the revenues from theprogram itself have played a major role.
4. Slum Improvement Program l/
The Slum improvement Program was initiated In 1969 when it became
clear that the program of slum clearance could not deal either with the
problem of existing slums in Greater Bombay or with the raplid rate of increase
of the slum areas. The Improvement Program was thus designed, in light of these
problems, to improve ;.living conditions of hutment dwellers on municipal lands
by providing basic amenities. A similar program is currently carried out
by the Maharashtra Housing Boatd on behalf of the State Government in the
cities of Bombay, Poona, Nagpur, and Aurangabad. Thus far, municipal goirern-
men,t programs have been restricted to slums located on their own 1 Lnds.
However, the extension of the programs to slums located on private lands is
under serious consideration; legislation passed in 1971 -ives the Government
authorization to improve slums situated on private lands. As preliminary
actions, the BM-0 and the Housing Board have carried out. jointly a survey of
slums and private lands in the city of Bombay; the BMC has also prepared
This part largely dr7w-sfrom a B C paper, "Civic Slum Improvement
Program," May 1973.
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plans for providing civic amenities in.slums on private J.1ands located in
Wards A to K and.cost estimates amounting to Rs. 31.7 million have been
submitted to the Government of India. In addition, the Government is
contemplating the establishment of a Slum Improvement Board.
5. Amenities Provided Under the Slum Improvement Program
Two kinds of activities are carried out in this program:
(1) Improvement of existing slums by providing essential civic
amenities like water, sanitation, electric lights, passages and street
lights.
(2) Creation of new colonies with similar, or better, amenities
by shifting existing hutments to serviced areas. Vnder both schemes, every
hutment dweller who is relocated is allotted a plot of 15, x 10' on which he
may erect his own hut.
The standards which have been adopted regarding the amenities are
the following:
(1) One 10 seated sanitary block per 100 huts.
(2) One covered washing place with 4 taps per 100 huts.
(3) Four electric street-lights per 100 huts.
(4) Asphalting or concreting of passages.
(5) Drains wherever necessary.
In the case of existing colonies, it is generally not possible to
maintain the prescribed standards, especially in the case of sanitary blocks.
Also in some colonies where the passages are very narrow, the electric
companies are unwilling to provide lights because they find it difficult to
maintain them.
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The cost of the various amenities per hut is estimated as follows:
(i) sanitary block Rs. 250.00
(ii) washing place 35.00
(iii) electric lights 30.00
(iv) roads/pathways and drains 375.00
(v) watermain 60.00
The tbtal cost is further increased by about Rs. 50 to 60 per hut
in the case of the colonies with more than 1,000 huts where a welfare center
with a family planning clinic is constructed.
There are currently about 80 slums situated on the municipal lands
(ex&luding those situated in footpaths and roads) accommodating about 38,000
huts, which corresponds approximately to a population of 200,000. Out of
these! 56 colonies each having more than 100 huts have been involved in
this program. During the first three years of the implementation of the
program, 28 colonies comprising about 24,000 huts were upgraded; in 1972-73
the program was ,extended to the remaining settlements as a result of
additional resources "made available by the Government of India. Up to now,
20 million rupees have been spent on this program. In addition, the
Corporation has already established eight new colonies in the suburbs at
cost of Rs 6 millionThese are intended as alternative accommodation for
hutment dwellers displaced by the clearance of sites 'required
for urgent development.
The administration of this program was assumed by a new department
formed in 1969 under the charge of a ward officer. The works are executed
by the Road Construction Department. However in order to expedite the
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execution of-the works, this Department was placed under the responsibility
of an Executive Engineer, who prepares the plans, estimates and supervises
the works.
The major difficulty in a rapid implementation of this program is
that in most of the colonies suitable vacant sites for locating washing
places, sanitary blocks and other amenities are not readily available.
Thus shifting of some of the hutments became imperative; though as far as
possible, these hutment dwellers are given alternative accommodation in the
same colony.
6. Budgetary Account of the Slum Improvement Program
Expenditures and incomes concerning this program are recorded in
the General Account of the Slum Improvement Account in Budget B. There are
no expenditures or receipts recorded in the Capital Account of this budget.
This practice is explained by the fact that these works are regarded as
temporary and the slums are expected to be cleared in some undetermined
future. Expenditures are shown under the budget head "Creating new hutment
colonies,! and income from rents come under the heading of "hutment colonies."
It is not possible, from the budgetary accounts, to determine other sources
of financing expenditures since the account of this program is integrated
into the accounts of the BIT's properties. However, from the revenue
structure of this account it seems that expenditures which are not covered
by rental income are financed by a contribution from the General Revenue
Budget. In 1972, an additional source of revenue, which is not included in
the budget, was made available by the Central Government in the form of
a grant of Rs. 15.7 million. The accounts of the slum improvement program
including the governimnt grant are presented in Table 106.
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Table 106: ACCOUNTS OF THE SLUM IMPROVMENT DEPARTINT
Revenues2/fra
Hutment Deficit/Expenditures- Colonies Surplus
(Rs) (Rs) (Rs)
1969-70 51,063 64,570 13,507
1970-71 847,537 186,886 - 660,851
1971-72 1,647,584 293,600 - 1,353,984
1972-73 17,338,694 1,300,000 -16,038,694
Sources:
* 1/ BM Staff
2/ From Budget B, Slum Improvements Budget, General Account,BW Annual Accounts.
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The-revenues generated by this program consist of reats which
are fixed as follows: For old colonies, a "compensation" is recovered
in the amount of Rs. 5.00 per 9.29 square' meters area of the hut subject to
a minimum of Rs. 8.00 per month for huts used for commercial purposes.
In the case of new colonies, the rentals are fixed at Rs. 15.00 per month
for a plot of 4.57 meters x 3.04 meters used for residential purposes and
Rs. 30.00 for those used for comermial puzrposes. Transfer of properties
is allowed after payment of a transfer fee of Rs 50.00 in the case of old
colonies and Rs 200.00 in the case of new colonies. The compensation is
collected only if at least 50 percent of the amenities are provided. The
standard returns expected of every hut wadld work out to Rs 15.00 per month.
It is well known that the compensation bears no relationship with the
amenities provided; but, the Corporation follows the example set by the
Government, which initiated the policy of collecting rents on its
own programs. .
7. Sumary: 'BMC Slum Programs
The Corporation administers two basic types of programs. The
slum eradication program had not produced the kind of relief expected for
a large number of slum dwellers. This was due to the fact.that, as a result
of high construction costs and limited financial resources, the rate of
construction of new tenements was too low compared to the scope of the problem.
The second type, which is a slum improvement program, received the largest
financial share in the total expenditures,incurred by the Corporation on
slur; programs. However, the majority of the funds within this program
are used for the maintenance of old properties built in the early 1900's.
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Expenditures and revenues from the slum programs are aggregated in
Table 107. Total expendit-ares have increased at an annual compound rate of
3.4 percent over the 1962-1971 period, well below the rate of growth of
the municipal budget; and, they represent, at the present time about 4
percent of all municipal expenditures. At least from a financial viewpoint,
these programs have remained quite low in the priority ordering of the
BMC. The financing of these programs has been shared by incomes generated
by the programs and by transfers from the General Revenue Budget (Table 108).
Grants from higher level governments have not been substantial and even -
negligible in more recent years.
Table 108: SLUM PROGRAM - MEANS OF FINANCING TOTAL EXPENDITURES - PERCENT DISTRIBUTION -BMC
1963-64 196l-65 1965-66 1966-67 1967-68 1968-69 1 1970-71 1971-72
Total Expenditures (YU) * 30,667,856 27,120,901 28,391,592 34,044,369 31,791,049 38,086,723 32,426,383 32,102,330 3,689,833 41,550,639
Financing by (N)
Own Revenues 32.72 4o.12 39.54 37.33 36.68 32,64 40.93 48.59 .51.7 h4.36
Contribution from General Revenue Budget 22.08 26.31 24.77 23.54 23.53 25.19 31.17 37.914 52.80 h8.18
RIC Revenues . 54.81 66.h3 6.31 60.87 60.21 1 57.83 72.10 86.53 101.67 9254
External Aid 11.38 5.92 8.514 2.02 7.44 3.70 1.87 .48 1.16 -
Revenues from Borrowing 33.80 27.64 17.13 37.10 31.8 38.h5 23.02 12.98 5.84 7.45
Source: BW Annual Accounts
Table 107: SLUM PROGRAM 1/ - MEANS OF FINANCING TOTAL EXPENDITURES - BMC
1962-63 1961-61 l964-65 l965-66 1966-67 1967-68 1968-69 1969-70 1970-71 1971-72
Total Expenditures 30,667,856 27,120,901 28,391,592 314,014,369 34,791,049 38,086,723 32,126,383 32,102,330 3,689,833 41,550,639
Own Revenues 10,035,711 10,882,490 11,227,726 12,711,611 12,76h,142 . 12,434,265 13,273,671 15,60i,hh4 17,99,184 18,432,051
Contribution from General Revenue Budget (A) 6,7714,421 7,135,5145 7,033,453 8,014,100 8,185,950 9,595,111 10,108,008 12,178,1420 18,317,964 20,020,172
BMC Revenues 16,810,132 18,018,035 18,261,179 20,725,711; 20,950,092 22,029,376 23,381,679 27,779,86 36,312,148 38,452,223
External Aid 3,490,625 1,605,600 2,1425,586 686,571 2,586,839 1,410,269 1,579,719 154,808 405,023 -
Revenues from Borrowing 10,367, 099 7,497,266 7,701,827 12,632,0811 10,954,118 14,6147,078 7,466,985 14,167,658 - 2,027,338 3,098,116
1/ Slum Improvements and Slum Clearance Programs.
Source: BMC Annual Accounts
co)
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C. Bombay Building Repairs and Reconstruction Board
This Board was formed in November 1969 by the State Government
to facilitate the rehabiliation of core city housing. It is a statutory
unincorporated, state Board where all parties concerned are represented
(BMC, tenants, landlords, and engineers), and which functions under the
supervision of the Deputy Minister for Housing. The Board has been chartered
for a period of ten years, which is renewable, in order to provide for the
repair or reconstruction of dangerous buildings, i.e. buildings which are
7ikely to collpase, and to provide for the relocation of the displaced
occupiers.
The creation of this board is a result of the Corporation's
inability to deal with repair or demolition of dangerous buildings in"tHe
framework of the BM Act. More specifically, this failure was the result -
of a lack of finance for this particular purpose. The fines imposed on land-
lords who do not make the repairs required by law are very low as compared
to the cost or repairs. In 1960, a request was made by the BMC to the State
Government for an increase in the fines, but the matter is still pending
in court. The landlords, therefore, have no incentive to maintain their
buildings. In 1965, a Commaission was set up to study this problem noted
that the combined effects of rent control, which has been in existence since
1947 in Bombay, and soaring land values in BombayLCity made it profitable
to the landlords to allow buildings to collapse. The Development Plan finalized
in 1964, also took note of the deteriorating condition of the old buildings,
in Bombay and stated that 18,000 buildings,containing 161,000 tenements,
would either require expensive repairs or replacement in the next 15 years.
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Since the problem ot house collapses, with resulting displaced-families,
was continuing unabated, the State Government set up the Bedekar Commision
in 1965 to recommend the necessary policy actions which should be taken
in order to minimize such collapses in the future. The Commission recommended
that any solution to the problem-should take into account- the necessity
of providing sufficient funds for carry.ing out repairs or rebuilding work,
and the setting up of transit camps in which occupants of housing being
repaired or demolished can be housed until they are returned to the repaired
residences or relocated.
1. Functims of the Bard
The duties of the Board in order of priority include structural
repairs to dangerous buildings, demolition of irreparable buildings, and
construction of transit camps. For -this--purposeT- the board is empowered
to have the premises forcibly vacated and buildings demolished if necessary.
In the case of repairs or demolition the board is obliged to provide
temporary or permanent accommodation for displaced people. The board
deals primarily with private residential units, however, repairs are also
made on small commercial units as long as there is same residential use.
Any building of the type just described and located in the city are under
the Board!s jurisdiction. The Board also has the right to propose
the reconstruction of a building on which the cess is levied and which is
situated in an area declared as a slum area under the BMC Act. However,
the initial emphasis of the board is on repairs. The redevelopment of the
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slum areas via reconstruction will be undertaken later. Nevertheless,
the board, as a matter of policy, has decided that any slum area which
is quite small and in which most of the buildings are in very bad condition
may be considered for reconstruction. Accordingly, one slum in each ward
has been selected for such reconstruction.
The criterion adopted in the definition of structural repairs is
as follows: if the repair is equal to or less than Rs 75*per square meter
the board undertakes the repair of the building; if this unit cost is over
Rs75 the buildings are vacated and demolished while new buildings are assigned
to the tenants. However, the Rs 75 rule may be waived.
At the discretion of the Board, repairs may be made if the private
party (owner and/or tenant) agrees to pay the excess amount when the repairs
charges are up to Rs 90 per square meter, these cases are inspected by a
Technical Committee, which--after a detailed probe - recomends to the
Board whether they should be takan up for repairs or otherwise. Indeed
this figure of Rs 90 per square meter was arrived at via the notion that a
building, after structural repairs, should have its useful life extended by a
period equal to one-third of the anticipated life of a new building. Thus
it would not be worthwhile to spend more than one-third the cost of a new
building on the structural repairs to an old building. The cost of construction
of a new building at the time of formulation of the Act was estimated to be
Rs 22 per square.feet of plinth area. However, in the course of consideration
of the reconstruction scheme, the Board found that the estimated cost of
construction of a new building in the city would be approximately Rs 35/
square feet of plinth area. It therefore decided to adopt one-third of
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this or Rs 25 square meter as an indicator of irreparability under theAct.
The system of voluntarily contribution for excess, repair cost has worked
out fairly well. During the first year of the Board's operation nearly
70 percent of occupiers have came forth to contribute this
excess so that repairs could be undertaken. The Board is to make the
repairs on the basis of specifications provided by the BM . The owners
and occupiers are allowed to make repairs to their bld buildings with their
expenditures being reimbursed to them by the Board after the Board has
inspected and approved the final results. The Board sets apart about 20
percent of its proposed expenditure on repairs for construction of buildings
under such reimbursement schemes. Permission is given in such cases even if the
buildings are not on the priority list, under the condition that the repairs are
urgent. In other cases, the Board is reponsible for the repairs; however, due to a
limited staff, which amounts at the present time to approximately 12 senior
technical officers, 30 assistat technical officers, and 1 chief technical
officer, the Board subcontracts the work to private contractors. This
procedure has proved to be an important impediment in the Board's work
since private contractors are usually not interested in these types of union
works. The Board has decided to allow the Chief Executive Officer to
negotiate with unregistered contractors or to allow grouping of works that
could be entrusted to particular contractor. In addition, the Board decided
that contracts of works costing less than Rs 5,000 may be fixed by negotiation
with contractors of the Board in consultation with the Chief Excecutive
Officer of the Board. The exception is that cae Contractor cannot be
awarded more than two such works at a time.
. 287
2. Means of-Financing
The Board has three main source of finances: (1) Building
Repair Cess, (2) statutory contribution by the State Government and the
BMC in a yearly amount of Rs 10 millions each, and (3) revenues derived
from rents, interests, and compensation. The State Government may
increase its contribution at its own discretion. In addition to this
regular contribution, both the State Government and the BMC contributed
an intial amount of Rs 25 million each, for meeting the expenditures
of the Board. A detailed presentation of the other two types of revenues
will be presented in the following two sections.
a. The Building Repair Cess The Cess is a surcharge on the property tax
levied by the BMC, which acts as the Board collection agent. All residential
properties in the city area are subject to the Cess, with the main exemptions being
government-owned properties, owner-occupier buildings, and certain newer
properties. For purpose of assessing the tax liabilities, buildings are
classified according to date of construction, with rates higher for older
buildings which have undergone repair under the Act (See Tale 109). In
each case the onwerst share of the tax is 10 percent of rateable value with
the remainder being paid by the tenant in the form of a higher controlled
rent. The tenants rates are doubled after the structural repairs are made.
It may also be seen from Table 109 that the greatest
portion of this Cess is collected from the oldest class of property and that
total collections from the Cess are equivalent in amount to approximately
10 percent of total property tax collections of the BMC (see Tables 110 and 111).
Table 109: REPAIRS AND RECONSTRUCTION BOARD PROPERTY TAX RATES*
Rateable Yearly
Rate of Number value of Demand of,
Class of Date Normal Structurally of buildings cess (1971-
PL erty Coastructed rate repaired buildings (Ra '000) 72) (Ra '000)
A Before 1940 25 o 17,642 91,909 22,879
B 1940-1950 20 30 2,433 16,219 2,853
0 1950-1969 15 20 2,183 35,034 5,244
Total 22,258 141,162 30,976
Sourcel Bombay Building Repairs and Reconstruction Board
- 289 -
Table 110: Bombay Building Repairs and Reconstruction Bo ad
Reconstruction Works(Period ending May 1973)
Number of draft schemesapproved by the Board 138
Number of schemes finallyapproved by the government 14
Number of schemes started 5
Number of works where physical progress is
-- up to 50% 3
-- up to 90% to 95% 2
-- all completed 0
Number of tenements rehoused in thereconstructed buildings 98
Source: Same as Table 109
- 290 -
Table 111: Number of Properties Exempted Category Wisefrom the Building Repair Cess
A B C Other
a. Central Goverment 8- - 48
b. State Government - - 665
c. BMC 1,363 401 322
d. Maharashtra Housing Board - - 400
e. Bombay Port Trust Authorities - - - 806
f. Public Trust Properties/ 649 163 152
g. Cooperative Housing Societies 4h 578 662 -
h. Buildings Exclusively inOccupation of the Owner 713 232 192 -
i. Buildings Exclusively Usedfor Non-residential Purposes 10,770 2,017 2,225 -
j. Residential Buildings Occupiedon Leave and License Basis 597 191 219 -
k. Properties Partly used for (h),(i) and (j) mentioned above 343 18c 61 -procided not used for any otherpurpose
1. Open Lands - - 769
m. Buildings Erected after 1969 -- 78 -
1/ Registered under the Bombay Public Trusts Act 1950
Source: Bombay Building Repairs and Reconstruction Board, Annual Report 1970-71.
- 291 -
b. Revenues from Rents When the buildings are reconstructed at the Boar's
expense, rents are charge to the occupiers. Itis generally though that the rents
for residential tenants should be between 25 to 30 paise per square foot or 50
to 5 rupees per month; and the rent for non-residential tenant-shops or offices
on ground and first floors should be.between 5 to 75 paise per square feet.
-292 -
XI. ROAD TRANSPORT
A. Road Network in Greater Bombay
The road system in Greater Bombay can be divided into two parts:
(a) roads and streets to serve local needs of access and circulation, and
(b) routes used for cross-city traveling. The latter comprises approximately
one-third of the total road mileage and most of the traffic. The arrangements
of arterials on Bombay Island has been guided by several factors. The
geographical features of the island have resulted in a north-south orientaion
of roads with limited road connections with the suburbs. A second major
determinant of the system is 1and use. It accouts for both the convergence
of several routes at the center of commerical and government activity in
the Fort area, and the relatively sparse road development in the vacinity
of the Mahalaxmi area. Some substantial parts of industrial areas, such
as the industrial zones in the heart of F and G wards, are not served
adequately by good arterial roads.
The development of arterial roads over the last decade was
mainly the result of a 1962 Bombay Transportation and Traffic study sponsored
jointly by the Central Government, State Government, and the BMC, and
conducted by the US based consulting firm of Wilbur Smith and Associates.
The objectives of this study were to recommend ways for improving the
efficiency of traffic operations on existing streets and to provide a plan
for new road construction. The traffic study was patterned after the studies
being carried on for US cities at that time. The emphasis was almost
entirely on automobile and truck traffic, although reference was made to the
need for other studies of mass transit services. The final report for this
-293-
study was presented in December 1963 and contained recommendations for
building a system of freeways, expressways, and major streets. The
recommended network would encircle the Island with freeways (the West
Island and East Island freeways, and the Mahim and Cross Island Connectors)
and would bisect the Island longitudinally with a central Island Expressway.
The report pointed out that with the proposed system all portions of the
Island would be within one mile of a freeway or expressway. The plan also
called for upgrading portions of the Eastern and Western Express Highways
in the suburbs to freeway standards, the construction of the Sewri Expressway
leading to the Thana Greek Bridge, and construction of a Tardea Expressway.
In all, 28 miles of freeway, 14 in17s of expressway, and 75 miles of major
route improvements were proposed at a 1963 estimated cost of Rs 960 million.
The West and East Island Freeways account for Rs. 570 million of this total.
Details of constructicrn and improvement of existing roads were not collected
during the mission. However, on the basis of information provided by BMO
officials, actual progress in the implementation o:? these recommendations
has been slow. The merit of this road development plan has been discussed
in great detail in the IBRD Report on Bombay of April 30, 1971 (1) and
will only be summarized here.
"The road system proposals for Bombay were not supported byconvincing evidence that they were the 'best' in terms of overallurban transport and development needs at the time they were pre-sented in 1963. Developnents during the intervening years, in-cluding the proposal of substantially different concepts for futureurban growth, make it highly questionable whether the originallyproposed road system is now a valid basis for a transport investmentsystem..... However, some recommendations made by the consultantsare even more appropriate now than in 1963; nanely those relatingto the need for improved traffic regulations and controls. Par-ticularly given the difficulty in obtaining sufficient funds tofinance large new road construction projects, more attention should
- 294 -
be given to measures which would permit more efficient use of existingstreets. It is unfortunate that the top priority assigned to thesemeasures by the consultants was not adopted.... Compared to possiblemass transit improvements, the justification for costly freeways(which as now being planned, are not even intended to carrycommuter buses and which would mainly benefit the small percentageof car owners) is very doubtful."
Tables 112 and 113 give some indication of the scope and the
quality of the road network. Intensive rains during the..monqoon season place
the road network under heavy stress and the quality of the pavement is, on
average, quite low. Roads are often very narrow and, in same areas of the
City, are generally inadequate to deal with the rapidly increasing number
of vehicles. The number of vehicles was estimated at 136,000 in 1969-70,
which represents nearly a 100 percent increase since 1962. Of this total,
65 percent are cars, 15 percent motorcycles and the rest are mainly trucks.
B. Responsibilities of the Corporation
The Corporation is responsible for the construction and maintenance
of most roads in Greater Bombay. The exception are two freeways, the Western
and Eastern freeways, connecting Greater Bombay to other Darts of the state
of Maharashtra, and 5 small linking roads in the suburbs. In the case of
the exceptions listed above, the BM bears all maintenance costs and 50
percent of the constructions costs, the remainder being supported by the
State Government. The allocation formula of the construction costs of the
two freeways was, in the past, one-third of the cost borne., by the Central
Government, one-third by the State Government, and one-third by the
S29 -
Table 112: TYPES OF ROADS IN GREATER BCMAYAS OF MARCH 31 1972
... . ........ Kilometers...... ..........
Extended GreaterType of Roads 0it Suburbs Suburbs Bambay
Water Boiud Metalled Macadam - 12.87 7.32 20.19
Black Topped 395.99 361.95 166.19 92h.13
Cement Concrete 78.66 48.18 11.05 137.89
Sett Paved 6.92 1.65 21.60 30.17
Total 481.57 424.65 206.16 1,112.38
Source: BMC Staff.
Table 113: RELATION BETWEEN POPULATION AND ROAD LENTH(March 31, 1972)
I II III IV VRoad Km
Popula- Road Mileage perArea tion Mileage per sq. 100,000(So M) (loo) Km Km Inhabitants
city 67.78 3,067 481.57 7.10 15.702
Suburbs 175 2,168 424.65 2.43 19.59
Extended Suburbs 194 733 206.16 1.06 28.13
Greater Bombay 436.78 5,968 1,112.38 2.55 18.64
Source: BMC Staff
- 296 -
Corporation.- .This formula was changed to the present one when the Central
Government deciddd to drop its participation. The Corporation also bears
all costs for the maintenance and construction 'of bridges, except for those
connected with the construction of the freeways. Finally, all traffic
regulations are under the responsibility of the BMD.
C. Budgetary Account
Expenditures and ±ncomes on account of roads and bridges are
recorded in Budget A under head VIII "Roads, Storm Water Drains and Public
Lighting." As a result of this presentation, it is rmt possible to trace
all expenditures which are exclusively incurred on roads. The problem
faced here is especially important with regard to debt charges and
expenditure on capital works. As noted several times before, the loan
works budget is presented by project and not by functional item within
each major head. A number of projects involve joint works on roads as well
as on storm water (SW) drains and it is not feasible to separate expenditures on roads
from expenditures on SW drains. An attempt was made to trace capital
expenditures.from the loan works budget by activity over a period of several
years, i.e. roads only, SW drains, and SW drains and roads. i
The main source of financing expenditures consists of tax revenues.
The wheel tax is imposed on vehicles on a weight basis. However, the tax
receipts represent quite a small proportion of total expenditures.
Documents not available for other years.
-297-
XII. WATER SUPPLY, SEWERAGE AND REFUSE COLLECTION
A. Water Supply
1. Nature of the System
The water supply system operated by the Corporation serves
the whole of Greater Bombay. There are few private suppliers.
Some areas outside the municipal limits are also served by the BMC
system--bulk water supplied to the municipalities of Bhiwandi and
Thana accounted for 4% of the total BMC water supply in 1971-72.
Greater Bombay derives its water mainly from artificial lakes
impounding the rainwater falling in their catchments during the monsoon
each year. The largest of these, located on the mainland, are formed by
dams built across the Vaitarna and Tansa Rivers which rise in the Western
Ghats and flow into the Arabian Sea. The smaller, the Vehar, Tulsi, and
Powai Lakes are located within the limits of Greater Bombay itself, on
the island of Salsette. All these sources are at such elevations that
water can be transported from them by gravity to the various focal points
of distribution in the Greater Bombay area. All water supplies to Bombay
roughly follow a north-south route from the source lying to the north
and northeast of the island to the center of the city. The oldest parts
of the present water supply system were constructed in the mid-19th
century to serve the commercial and residential areas which had been
developed on the southern part of Bombay Island, principally in the
area of the Fort and the Harbour. Vehar Lake was first developed in
1860, followed by the development of the Tulsi Lake in 1878. Then, as
water requirements increased, water had to be brought from the mainland
- 298 -
over longer distances and across the intervening Thana Creek. The
first stage of the Tansa Scheme was completed in 1892 and all works
connected with this scheme were completed by 1927. These developments
provided sufficient water to the area; but with the rapid post war
population growth, shortages developed which led to the implementation
of the Vaitarna-cum-Tansa scheme in 1948. The Powai Lake, which was
developed in 1889, has never been used as part of the system because
of the inferior water quality. In recent years its water has been
used for the stables in the Aarey Colony and for growing paragrass in
the surrounding areas. Since the Vaitarna scheme, no new source has
been explored by the BMC; instead, the Corporation has been buying
bulk water from the Government of Maharashtra (GOM), which draws the
supply from the Ulhas River.
The Ulhas Scheme, commissioned in 1967 by the BMC and GOM,
was conceived as an emergency scheme and makes use of the residual
flows in the Ulhas River after the demands of other users have been
met. The BMC has not been granted a permanent permit to this source
of water and can only extract up to 1.1 m 3/sec. In 1973-74, a new
source of water was made available to BMC by the GOM when the
construction of two dams across the Alwandi and Vaitarna Rivers
forming the Upper Vaitarna Reservoir was completed. Approximately
1.8m3 /sec is currently available and when fully utilized, it is
estimated that 6.2m 3/sec will be available. Finally, the State has
commissioned the construction of the Bhatsai Dam, which will release
-,*
--_299
33some 5.3m I sec f or use by BMC by 1976-77. All sources used at present
by the Corporation provide, in total, about 18.4m /sec. (See Table 114).
Mainland water is conveyed to Bombay by a gravity system of
trunk lines up to 77 km long, and sized from 600 mm to 3,000 mm in
diameter. Water is conveyed from Tansa and Vaitarna by 3 transmission
mains and Ulhas water is pumped to the Tansa mains. Vehar and Tulsi
water is gravity fed to city reservice reservoirs. The total lengths
of mains-recorded in 1971 was 1,896 km., but the
distribution system .i! generally of poor quality and out of date.
The distribution pipes consist mainly of cast iron with lead or rubber
joints. Some of the larger mains. are steel pipes protected with concrete
mortar and have been subject to severe corrosion. Some asbestos
cement mains exist in the suburbs. . -
The water distribution system is complex and does not effect
an equitable distribution of the limited supplies. Some areas are
supplied by direct feeds from the trunk mains, some by service reservoirs,
and others by a combination of the two. Considerable manpower is required
- 300 -
Table 114: WATER SOURCES AT PRESENT USED BY OR UNDER DEVELOPED FOR BMD
m 3 /sec m 3/sec
Sources at present used by BMC
(a) Vehar (EMC) 0.6(b) Tulsi (BMC) 0.2(c) Tansa (BMC) 4.9(d) Vaitarna (BMC) 5.4(e) Ulhas (GOM) 1..1 12.2
Source to be fully used by BMC 1973/74
(f) Upper Vaitarna (GOM) 6.21/ 6.2
Source projected to be used by BMC 1976/77
(g) Bhatsai Stage I (GOM) 5.3 5.3
TOTAL 23.7
Principal Characteristics of MC Sources
Date constructed NominalName (extended) Dam length live storage
Million n-)
Vehar 1856-(1899) (3 dams) - longest 225 in 31
Tulsi 1876-(1894) 559 in 8
Tansa 1892-(1927) 2,750 m 145
Vaitarna 1955 555 m 162
1/ Approximate 1.8 m3/sec currently available, giving a total currentyield of 14 m3/sec.
Source: BEM Staff
- 301 -
to constantly operate the large number of valves necessary to regulate
the intermittent supply to the various zones. Incoming mains to the
reservoirs are connected to the distribution grid, resulting in most
reservoirs not being filled. Low pressures and water shortage allow
only four of five city reservoirs, and one of nine reservoirs in the
suburbs, to be in normal use.
BMC has been carrying out network analyses for some years in
order to convert areas directly supplied from incoming mains to a
system dependent on service reservoirs and to determine network
extensions and reinforcements. Two-thirds of the City and one-third
of the suburban zones have now been analyzed. The number of proposed
zones is 76, with several zones supplied by one service reservoir, and
each zone having a separate feeder main.
As a result of the poor quality of the water distribution
system, the water losses are important. Several sample experiments
were conducted and revealed that leakage under equivalent 24-hours
supply conditions is 40-45% of the inflow and that corrective measures
could reduce this to less than 12%.
Finally, important deficiencies in the water supply system
can be noticed at the treatment stage. All water receives
chlorination, but only 6 percent receives full treatment.
Water distributed through service reservoirs
is rechlorinated, but quality varies and is dependent on previous
treatment, pressures, and distance from reservoirs. Raw water extracted
from Tulsi reservoir and from Ulhas river require rapid
- 302 -
sand filtration. Chlorination is carried out"
at Powai for the City, at the entrance to the east-west tunnel for
the western suburbs, and at Bhandup and Mulund for the eastern suburbs.
Prechlorination takes place at the inlet side of all service reservoirs.
Statistics available on production and consumption of the
water supply by major geographical divisions and user's categories for
the last decade are given in Tablel15.
The supply of water has been relatively constant over the period
1962-71. Annual variation in the quantity of water available are not
-- insignificant since the water supply system is heavilydependent on the monsoon
starting each year in early June. In 1966, for example, monsoon failure
and resultant drought caused many industries to close and population
evacuation in some areas was seriously considered. In 1972, the monsoon
again failed over part of Maharashtra, leaving the BMC with approximately
10-15% less water than forecast for 1972-73. (See Table 116).
The metering system in Bombay is still at a relatively early
stage of development. All industrial supplies with the exception of
some construction works, are metered. About 95% of domestic supplies
(excluding losses) in the suburbs are metered, but the corresponding
figure is only 20% in the city. Altogether, approximately half of all
supplies are not metered (Table 117). The unmetered properties are
mainly the older types of property where metering would be extremely
difficult since in the old, congested part of the city consumer pipes
are frequently laid out in such a manner that there is virtually no
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� s иьитЬ. ю . 18 я 21ь . 22 з :4s г4! ' або z7 ь ' z92 7 ь7 . `
ет;t: вдм . виьи. Ь. ю . з9 а 7 . 47 � 49 s т , 76 � � а0 - 84 1 ав '
� . 9 в в в а п Jt у в г l в г l с п s ( п S а е р l т о f, Ч а� � е г , ' . .
н .:s. и. s � PP1y рвт o.r , ю . � 1, о7й 99s 1, о14 ' � 927 � 92 я 9ео аоь 9s2 1, о7з
' мl.1. � . suPP1y р. г � . у , ю . � ебя 810 8ц п б т4а 7ео аоо ь9ь 757
� . 4j 5 и о л 1 У о 1 Ч а [ а т Ь т tlalor C:eei ю rlas ef Vfae в ал д N в 1or Ceoyrnohfeal А к и в � �
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' Сев вевт ВотЬву ю . 161,791 20 й ,330 21l,067 ТО б ,114 186,774 211.180 202, а96 217,774 267,106 � ��
, С l с 7 NL 116,520 147,742 1 Ы , б 13 142,573 112,244 1.39,6 В 9 . 126,15{; 175,242 160,217 '
lr Ъ и т Ь в�Ю . ] а , о24 д7, оеt
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� t е [ в ад . д S и Ь и д в ю . i,z4a 9,721 9,lto 17,so7 1z, в» 16,se! », г 72 1в , оы 24,641 ' �
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С г в в с е т еаль. у га . 137 д 4 е еs, ь3ь а2, я19 7в ,2 ц го4,9 о 1 7l,7es т9, е1а е2, й1ь s4,2a8 �.
Ctq ю . 106,513 59,057 S6,Z02 50,823 77,594 47,821 47, Оа 9 47, Ь74 54,019 '
S и Ь и т Ь в И L 20,102 22,052 2 Ъ ,892 ' 22,576 , t6,527 S5,O7D Т 5,196 26,766 ]1,813 �
'' Еа еаг.� �ад S и4 итЬв П [. Ь ,537 ' 6,Sri 4,826 й , е22 4;780 6,926 7,3]4 7,97 й 6,_454 �
С . Oehee Ч о n- д о ат в [1 е Pucooees , �
. . , Сг ев еег Dom бay ю . 2, й27 7,544 а 5 а ' 442 ]79 815 916 777 1,297 ,
� � ' С l с у ю . Ы 7 630 116 144 S9 � 60 74 483 467 � ,+'
. ' S и Ь и е Ь в ML ) 2,686 139 290 707 73 Р а 45 267 � 799 �
� ) 2,567 '
, - Е а Се п д ад 8 иЪ и е Ь в NL ) 209 2 В 17 1 В 70 "ь 7 э 5
, D. Laeaes
' А s в и а ед U п в с с а т [ е д Lа и м'
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. Е о г С г е в са г В о т Ь в у К L 49,467 45,223 S3, й 81 50,254 51,474 31,490 50,051 32,976 61,89 э �
- 5. О а {1 у А v е т а д е р с е С а о [[ в bv Ма У n т С е о ет гт hi с в l Acees а п д Ъ v Н а 1 а с Caceeociea о [ О е е г е.
�, А . е п г л 1 г Purnnsnx ,
, � С т г а с е г 8 и и Ь в у L 209 226 � 2t д.i 187 170 169 160 1b6 194 '
, С 1 су L 246 226 276 20 й 167 164 L85 ' 197 22 Ь � �
� � S и Ь и с Ь в L 156 17 Ъ 169 ., 179 , 21 э 168 147 175 167 . ,
, Е х с е п д е д 3 и Ь и т б в � L 96 103 �94 102 125 166 4 В 115 ц 2
� 8. О а .п е 5 с l е Р и г р о е н .
, . С г с в и r poc6ay ' L ` 97 120 125 113 95 105 97 99 121 "�
. с [[ у L 107 137' 149 128 85 104 115 121 142
� S и Ь и т Ь в L 80 101 95 100 126 109 87 80 101 '
- л Е к с е п д е д S и Ь и т Ь а L 49 6] 59 77 77 � 99 58 Ь В 90
� S г�г ге ; 8.w^ 5t з ££ ,
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3o4 -
Table 116: SUMARZ OF WATER SUPPLY STATISTICS
1963-64 1971-72
Quantity of water supply to 346,762 425,956
Greater Bombay (ML)
Average daily supply to 947 164
Greater Bombay (M) 29712,, 362,063
Consumption of water., average daily 209 193
supply for all purposes per head
in GB (R) ',,
Average daily supply for domestic 97 121
purposes per head-in GB (R)
Average daily supply for domestic 107 142
purposes per head in City (e)
Average daily supply for domestic 80 101
purposes per head in suburbs (e)
,Average daily supply for domestic 49 go
purposes per head in extended
suburbs (e)
Source: BMC 5,taff
. ..................................................
- 305 -
TabJe 17: METERED AND UNNETERED SUPPLIES
Metered Unmetered Total % Metered
Domestic Supply to GB (ML)
City 42,915 117,302 160,217 26.8
Suburbs 61,387 20,232 81,619 75.2
Extended suburbs 21,521 3,120 24,641 87.3
TOTAL 125,823 140,654 294,477 42.7
Total Supply to GB (ML)
City 95,330 157,258 252,588 37.7
Suburbs 91,760 h2,632 134,392 68.3
Extended suburbs 29,382 9,595 38,977 75.4
TOTAL 216,472 209,485 425,975 50.8
Source: BMC Staff
- 306 -
position in which a meter can be installed and kept free from theft
or interference. Metering of chawls, where communal taps are provided
to serve groups of tenements, has not been undertaken in the city. As
of March 1972, communal taps and standpipes totaled 3,171 while the
total number of connections was 144,000 (100,000 in the city and 44,000
in the suburbs), of which 82,000 were unmetered. Of these 62,000 meters,
53% were BMC property (Tables 118 and 119).
Daily water availability per.capita is very low and has
gradually declined during the last decade. These numbers refer to
the quantity of water supplied for all purposes, industrial and
commercial uses included. For domestic purposes, however, water avail-
ability per capita, 'though still low in Greater Bombay, has increased
during the same period. The quantity of water made available is also
dependent on the location of the consumers within the area. People
living in the extended suburbs receive about 63% of the quantity of
water made available to city dwellers, which is a significant improvement
when compared to the similar figure of 46% in 1963. The increase in the
supply of water for domestic purposes has been achieved at the expense
of industrial and commercial users. Table 120 concerning the distribution
of water supply by major categories of users, shows that the relative
share of water allocated to industrial and trade uses declined from
about 38% in 1963 to 22% in 1972.
The consumption of water is rationed for all types of
consumers. Hours of supply are limited for consumer purposes with
less than five hours supply per day currently available for 60% of
- 307
Table 118: DETAILS OF STANUPIPES IN CITY, SUBURBS AND EXTENDED SUBURBSAS OF MARCH 31, 1972
City 349
Suburbs 2,276
Extended Suburbs 546
Greater Bombay 3171
Table 119: STATEMENT SHOWI DETAILS OF METERS IN CITY SUBURBSAND EXTENDED SUBURBS, AS CF MARCH 31, 197
city 17,972
Municipal 12,689
Private 5,283
Suburbs 32,200
Municipal 15,282
Private 16,911
Extended Suburbs 12,183
Municipal 5,126
Private 7,057
Greater Bombay 62,355
Municipal 33,097
Frivate 29,258
Source: BMC Staff
- 308 -
Table 120: DISTRIBUTICK OF WATER SUPPLY BY MAJOR TERRITORIAL DIVISION AND MAJOR USES - BM)
1968 - 1972 (%)
Water SupplyAccounted 1963-64 1964-65 1965-66 1966-67 1967-68 1968-69 1969-70 1970-71 1971-72
for by:
City 74.55 70.70 72.16 65.63 61.73 61.91 58.85 58.41 56.88
Suburbs 19.68 22.87 22.57 24.75 29.40 26.63 29.O 28.82 30.25
Extended Suburbs 4.03 4.61 4.37 6.22 5.73 7.76 8.43 8.30 8.77
Outside Bombay limits 1.74 1.82 .90 3.40 3.14 3.70 3.69 4.47 4.10
Greater Bombay - 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Tomestic purposes 46.65 60.34 61.49 61.52 54.31 61.51 60.80 61.42 62.61
Industrial & trade 38.39 25.26 23.27 23.35 30.58 23.26 23.92 23.36 22.10
purposes
Other non-domestic .70 1.06 .2h .13 .11 .23 28 .22 .30
purposes
Unaccounted for 14.26 13.34 15.00 15.00 15.00 15.00 15.00 15.co 14.99
City - 100.00 100.00 100.00 100100 100.00 100.00 100.00 100.00 100.00
Domestic purposes L4.28 60.53 63.06 62.61 51*.32 63.30 61.88 62.67 63.h3
Industrial & trade 40.48 24.19 21.66 22.32 33.64 21.67 23.09 22.09 21.38
purposes
Other ton-domestic .23 .26 .27 .06 .02 .01 .01 .22 .18
purposes
Unaccounted for 15.01 15.02 15.01 15.01 15.02 15.02 15.02 15.02 15.01
Suburbs - 100.00 100.00 100.00 100.00 100 00 100.00 100.00 100.00 100.00
Domestic purposes 54.77 59.62 56.12 58.35 59.22 57.82 59.11 59.60 60.73
Industrial & trade 28.95 27.92 26.97 26.30 25.48 26.37 25.04 25.14 23.67
purposes
Other non-domestic 3.72 3.41 .17 .33 .29 .79 .84 .25 .59
purposes
Unaccounted for 12.56 9.05 16.74 15.02 15.01 15.02 15.01 15.01 15.01
Extended Suburbs - 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00 100.00
Domestic purposes 50.90 61.03 63.00 62.60 61.38 59.91 59.11 58.91 63.21
Industrial & trade 45.89 28.45 30.68 22.35 23.52 25.01 25.78 26.00 21.69
purposes
Other non-domestic 1.33 .01 .03 .08 .06 .10 .08 .08
purposes
Unaccounted for 9.19 6.31 15.02 15.02 15,02 15.01 15.01 15.02
Source: BMC Staff
- 309 -
the population. Such hours are often inconvenient, e.g. between 3
and 6 a.m., in spite of many efforts made to stagger supply hours to
the various areas. A large number of valves are operated daily and
this pattern is continually being amended, taking account of new works
brought into use, meeting seasonal demand fluctuations, allowing for
redistribution or growth of domestic and industrial demands, and meeting
day to day contingencies. The 1971-72 hours of supply is illustrated
in Table 121. Currently, it is estimated that only 71L of the domestic
Table 121: Breakdown of Supply Hours
Hours of Supply 2 or less 2-3 3-5 5-8 8-12 12-8 Total
Population 1.3 0.9 1.4 1.0 0.7 0.6 5.9(millions)
Percentage ofPopulation 21 16 23 17 13 10 100
Source: BMC Staff
demand is being satisfied. Quota restrictions have been imposed on
primary industries with high water consumption such as the post,
dairy, and railroad. But even in these cases, the BMC has been unable
to meet its quotas for the past four years.
2. Expenditure Structure and Growth
Expenditures incurred by the Corporation on water works have
increased at a compounded annual growth rate of 7.4%, and 33%, respectively
for current and capital expenditures (Tablel22). On a per capita basis,
total expenditures have increased from 15.8 Rs. to 24.6 Rs. The budgetary
provisions for waterworks are taking an increasing share of the Corporation's
resources and in particular of its investment program. The BMC is currently
- 310 -
Table 122: EXPENDITURES ON WTER WORKS - BMC
(Rs'000)
II III iv v vi viICapital
Total Expendi-
Capital Expendi- tures as
Ecpendi- Expendi- Total tures % ofCurrent tures on tures on Capital Total per Total BC
Expendi- Iand and Plant and Ecpendi- Expendi- Capita Investnent
tures Buildings Machineryl/ tures tures (Rs) Program
1962-63 53,889 13,353 829 14,182 68,071 15.8 28.8
1963-64. 59,101 27,111 701 27,812 86;913 19.4 43.3
1964-65 53,356 23,461 968 2h,439 77,795 16.8 37.8
1965-66 60,394 60,876 261 61,137 121,531 25.3 58.8
1966-67 63,050 79,557 36 79,593 142,643 28.6 6h.5
1967-68 65,532 90,303 143 90,h46 155,978 30.2 56.8
1968-69 78,103 45,936 169 46,105 124,208 23.1 41.6
1969-70 93,294 h1,829 394 42,223 135,517 24.h 6.9
1970-71 102,280 50,264 547 52,811 155,091 26.9 53.9
1971-72 95,318 50,961 790 51,751 1h7,069 24.6 48.2
1/ As given by the Corporation, i.e., including rolling stock and other
expenditures which would be classified under current but insignificant.
Source: BMC Annual Accounts
- 311 -
allocating 48% of its investment funds to waterworks as compared to
29% in 1962. This situation can be. attributed to two major factors:
lack of water, and low quality in the existing water supply system,
i.e. an out of date distribution system resulting in high leakage and
encouraging wastage. BMC's strategy has been to look for new sources
of water and to add sources of water supply without corresponding
improvements and extensions to the old distribution system. A programme
of leak detection and waste prevention could significantly improve the
quantity and quality of water made available to the consumers. Also,
the water supply system operated by BMC is heavily dependent on water
sources located on the mainland, which are placed under the jurisdiction
of the Government of Maharashtra (GOM), and state-owned agencies.
3. Planning and Administrative Organization
The inter-relation of Bombay with the mainland areas was never
really seriously considered in watei supply planning until the mid 1960's,
when major industrial development accelerated on the mainland. Various
public and local authorities have developed, or are seeking, water
resources in the region. There are at present four major water supply
systems contributing to capacity and the GOM has no overriding body to
coordinate their activities. In 1962 the Maharashtra Industrial Develop-
ment Corporation (MIDC), a state-owned agency, was created. The MIDC was
set up basically to be a tool for the industrial dispersal policy of the
State Government. It manages various industrial areas where it creates
the infrastructure in the form of roads, water distribution system,
sewerage, and drainage, and leases plots and/or buildings to various
industries. The MIDC operates three of the four large systems of water
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supply in the metropolitan region: the Kalyan-Ulhasnagar complex,
which is- the largest zone in the region outside Greater Bombay, is
served from the Badlapur waterworks and also by the Shadad system
operated by MIDC. The source in both cases is the Ulhas River and the
capacities of the two systems are 7.8 IMgd and 10 IMgd, respectively.
There is also the HOC/Trans-Thana system, which is based on.extraction
from the Patalganga river in the south of the region, and which serves
(besides the Hindustan Organic Chemicals plant on the river) the
industrial areas in Trans-Thana. The capacity of this system is about
12 IMgd. The MIDC's plans for industrial development in the Bombay
Metropolitan area have resulted in forecasted demands far higher than
the yield of local water extraction schemes. Therefore, it was obliged
to construct the Ransai and Barve dams. Additional pressures are likely
to build up with the development of the Bombay twin city undertaken by
CIDCO, a state-owned agency. CIDCO forecasts a population of 2 million
in the Trans-Thana region across the harbour from Bombay by 1991, and
is undertaking water source studies in addition to considering
taking supplies from the MIDC sources. Overall, it has been estimated,
on the basis of population and demand projections for the Bombay Metro-
politan Region (BMR) through 1991, that in 20 years Greater Bombay's
share of water resource requirements, although rising by 50%, will fall
from 82% to 60% of the regional demand.In a report to GOM in 1968,
the British consultants Binnie and Partners concluded: a) that water
resources of the islands of Bombay and Salsette are extremely small and
all future supplies to Bombay will have to be drawn from mainland sources;
313 -
b) that it is unrealistic to consider Bombay's water supply problems
in isolation from those in the other built-up developing areas on the
mainland which are part of BMR; and c) in the next 20 years water
demands will approximately double in BMR. They further propose the
creation of a permanent Water Resources Board for the Bombay region.
This Board should have authority over a region larger than-the BMF
and comprise the catchments of at least twelve rivers. The GOM has
agreed to the creation of such authority by April 1, 1975.
These considerations, in addition to those regarding the
existing system of distribution, form the basis of a 10-year Development
Program (1972-1981) prepared in 1971 by the Corporation with the assist-
ance of British Consultants. This program is the first major attempt to
improve water supply (and sewerage services) of Greater Bombay. Its
objectives are: to effect major changes in water 4istribution, leak
detection and waste prevention systems, to relieve the present water
shortage by taking supplies from new sources being develped by the GOM,
and to provide adequate treatment for all water supplies. It is expected
that at least 7-8 hours of water supply per day for the entire population
will be provided by 1981. This program is to be executed by the Corporation
and is estimated to cost the equivalent of US$ 457 million for both water
supply and sewerage works. The water supply component represents about
35% of the whole program. The execution of this programme has been
divided into 3 overlapping pases: a) ongoing works, i.e. contracts
let by BMC from 1968 to 1972; b) the first major phase, called the
first Bombay Water Supply and Sewerage Project, which covers the
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period 1972-78, and c) a second major phase scheduled to commence
in 1975 and extending through 1981. The IBRD agreed in March 1973 to
participate in the financing of the first major phase of this programme
to the extent of US$50 million, which is equivalent to 35% of total
project cost of US$158 million,.and represents approximately 22% of
the Development Program to 1978. Details of the project can be seen
in IBRD, Appraisal Report of the Bombay Water Supply and Sewerage Project
of April 30, 1973.
An additional problem was, until recently, the administrative
organization of the waterworks operation within BMC. The provision of
water in Greater Bombay is now administered by the Water Supply and
Sewerage Department. This department was established in 1971 on the
recommendation of Binnie and Partners. It is under the direct super-
vision of a Deputy Municipal commissioner, who is himself directly
responsible to the Municipal Commissioner. This Department took over
the fragmented multidepartmental organization then in operation. Indeed,
before the reorganization the administrative organization consisted of
3 separate departments (Water Projects, Hydraulic Engineer's and City
Engineer's) with 4 other departments dealing with administration and
accounting services. These services reported to 3 deputy Municipal
Commissioners and 7 chief officers. There was no coordination of
development between these services. The new department will function
as a self contained agency within the BMC and will have a separate
budget starting April 1, 1973 (Budget G for Water and Sewerage), a
separate fund whose balances will be used only for the services, an
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Table 123: WATER SUPPLY: CURENT INOMES AND EXPENDITURES1961-1972(RSOO0)
II I IV V VI VII
CurrentExpendi- Totaltures Admin- Current I Surplus'
Current Excluding Debt istrative Expendi- Minus DeficitYear Revenues Debt Changes Overhead ture (II+III) I - V
1961-61 47,854 13,544 34,164 1,630 49,228 146 .-1,8
1962-63 59,441 18,669 33,638 1,582 53,889 7,134 5,552
1963-64 65,639 19,582 37,848 1,671 59,101 8,209
1964-65 64,473 18,611 32,949 1,796 53,356 12,913 11,117
1965-66 70,374 20,670 37,000 2,724 60,394 12,7041 9,980
1966-67 72,701 23,565 36,958 2,527 63,050 12,178 9,651
1967-68 75,014 28,371 34.,144 3,017 65,532 12,499 9,482
1968-69 78,929 27,867 47,012 3,224 78,103 4,050 826
1969-70 83,803 35,308 54,038 3,948 93,294 -5,543 -9,491
1970-71 99,132 35,149 63,233 3,898 102,280 750 -3,148
1971-72 92,411 27,098 63,286 4,934 95,318 2,027 -2,907
1972-73 112,793 29,319 73,234 5,341 107,894 10,20 4,899
Depreciationin Rs 1961-62 = 174,459 1965-66 = 145,716 1969-70 = 259,140
1962-63 = 2)42,88 1966-67 = 259,713 1970-71 = 174,527
1963-64 = 217,411 1967-68 = 301,732 1971-72 = 212,351
1964-65 = 217,613 1968-69 = 278 ,421 1972-73 = 253,590
Source: BMC Annual Accounts
- 316 -
accrual, accounting system, and appropriate methods of introducing
and varying tariffs and charges. Support ftinctions of legal, accounting,
internal audit, personnel, and contracting will be provided by an
additional chief accountant. Similarly, a common Services Engineer
will be responsible for. transport workshops, electrical and mechanical
operations, purchasing, and laboratory facilities.
4. Financial Position
Until 1973 the water supply accounts were part of the M:unicipal Budget.
All revenues and expenditures were recorded under (Head 11) Water Works.
Examination of these accounts reveal that this service generated on a
current account a deficit during 8 of the 12 years under consideration.
The existence of such deficits was not intended by the Corporation.
BMC's policy is to administer the water operation as a self-financed
entity and to generate enough revenues to finance current expenditures.
There are a number of explanations for this deficit performance.
Primarily, increases in the quantity of water produced could not be
relied upon to increase consumption and sometimes even decreases were
recorded.
The tariff structure is composed of three basic elements:
1) a once-only connection charge assessed according to size and length
of connection, 2) an annual meter rental assessed by meter size, and
3) a charge for water supplied, assessed either by: a) meter measurement
at various user rates; b) by a tax on property value in unmetered
properties, or c) by agreement in advance on a sum to cover water supply
-317-
for a specific period (this is called a "compounded charge" and applies
to temporary connections or certain commercial uses). Ani additional tax,
a water benefit tax, was introduced in 1973. It will be imposed on the
property values of all premises in Greater Bombay in order to recover the
costs of a surplus capacity of installed assets, which do not yield
immediate or direct benefit to those covered by metered charges. This
tax has not yet been levied by the corporation.
Tables 124 and 125 give revenues from the various parts of the
tariffs and describes their relative share. It caxn be seen that the
water rates, excluding fees for water connections and rentals
of water meters, account for more than 95% of total revenues. The change
based on water consumption represents by far the largest single source of
revenue for the Corporation, with a relative share of between 71% and 80%
during the past decade. This proportion is surprising since it is levied
on only about 43% of all connections. However, this results from under-
charging unmetered properties when compared to metered water provided for
similar uses, and from charging industrial and commercial users at rates
much higher than those applied to domestic purposes. Unmetered properties
have been charged at a rate of 4.5% on the rateable value of property,
which corresponds approximately to 70% and 50% of the rate imposed on
water used for domestic purposes in 1571 and 1972 (Table 126). In addition,
the collection rate for this tax has been lower than for other types of
charges (Table 127). BIC's policy concerning water rates structure has
been to finance increases in current expenditures by increasing industrial
rates and maintaining the domestic rates unchanged for as long as possible,
.I
- Table 121h: WATER WORKS - REVENUES
(1000 Rs.)
1960 1961 1962 1963 1964 1965 1966 1967 1968 1969 1970 1971 1972
Water Rate
On property value . 6,886 7,119 7,000 7,052 7,391 7,892 8,148 8,687 8,685 8,929 9,038 9,060 15,000
By metered consump. 33,747 36,629 46,931 52,370 50,545 54,482 53,637 55,224 57,631 60,842 75,207 66,558 79,848
- Compounded Charge 2,942 2,604 3,907 4,491 4,746 5,668 7,629 7,883 9,111 10,562 11,465 13,127 12,800
Total Rates 43,575 46,352 57,838 63,913 62,683 68,045 69,415 71,794 75,427 80,343 95,711 88,746 107,648
Rent of watermeters 589 553 620 697 731 830 1,069 1,106 1,082 1,022 1,154 1,364 1,525
Fees for water 471 ,73 505 553 524 1 856 1,364 1,161 1,289 1,124 1,020 1,086 1,600connections
Rent of buildings & 43 83 63 58 82 92 97 94 101 106 96 113 147Land
Miscellaneous Receipts 297 393 415 417 453 551 756 859 1,030 1,208 1,128 1,102 1,872
Total Revenues 44,996 47,854 59,441 65,639 64,473 70,374 12,701 75,014 * 78,929 83,803 99,132 92,411 112,793
Source: BMC Annual Accounts
Tablå 125. WATER WORKS - REVENUES % DISTRIBUTION
60 61 2 63 64 5 66 67 68 69 70 71 72Water Rate
on property value , 15.30 14.88 11.78 10.74 11.46 11.21 11.21 -11.58 11,00 10.65 9.12 9.80 13.30
- By metered consumption' 75.00 76.54 78.97 79.78 78.40 77.42 73.78 73.62 73.02 72.61 75.87 72.02 70.79
Compounded charge 6.54 5.44 6.57 6.84 7.36 8.05 10.49 10.51 11.54 12.60 11.57 14.21 . 11.35
Total Rates 96.84 96.86 97.30 97.37 97.22 96.69 95.48 95.71 95.56 95.87 96.55 96.03 95.44
Rent of watermeters 1.31 1.16 1.04 1.06 1.13 1.18 1.47 1.47 1.37 1.22 1.16 1.48 1.35
Fees for water connections 1.05 0.99 0.85 0.84 0.41 1.22 1.88 1.55 1.63 1.34 1.03 1.18 1.42
Rents on Buildings and Land 0.10 0.17 0.11 0.09 0.1% 0.13 0.13 0.13 0.13 0.13 0.10 0.12 0.13
Miscellaneous Receipts 0.66 0.82 0.70 0.64 0.70 0.78 1.04 1.15 1.30 1.44 114 1.19 1.66
Total Revenies 44,996 47,854 59,441 65,639 64,473 70,374 72,701 75,014 78,929 83,803 99,132 92,411 112,793(10,000)
Source: BMC Annual Accounts
7--.
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Table 126: Revenue from Water Charges
in Rs / m3
1965-66 1966-67 1967-68 1968-69 1969-70 1970-71 1971-72
Current Revenueper m3 Supplied-' 1.93 2.10 2.12 2.23 2.44 2.74 2.11
Tax Revenues perm3 Supplied 1.91 2.07 2.09 2.20 2.41 2.71 2.08
Tax Revenues perm3 Consumed 2.25 2.44 2.46 2.59 2.83 3.19 2.45
Tax Revenues permi3 Consumed inUnmetered .59 .77 1.15 .82 1.02 .95 .64Properties
Tax Revenues perm3 Supplied AIJ/ 1.03 1.22 1.48 1.26 1.41 1.37 1.28Domestic Users=
Tax Revenues per m3
Supplied to Non- 5.43 5.62 4.20 6.07 6.42 7.94 5.70domestic Users
1/ Sum of water tax and rent of water meters.
2/ Based on water charge per m3 for metered domestic properties.
Source: BIMC Accounts
Table 127: WATER TAX ASSESSED AND COLLECTED FOR THE CITY
(o000 Rs)
1965/66 66-67 67-68 68-69 69-70 70-71 71-72Water Tax Value
Collection 6,325 6,597 6,992 7,327 7,544 7,805 8,297
Net Demand 8,334 8,605 9,110 9,546 9,746 10,234 10,530
% Collected 75.89 76.66 76.75 76.75 77.41 76.27 78.79
Compounded Water TaxCollection 21 20 16 13 15 16 15
Net Demand 27 23 19 19 18 18 18
% Collected 77.78 89.96 84.21 68.42 83.33 88.89 83.33
Water by MeterCollection 31,274 28,833 20,142 27,569 32,205 37,171 27,219
Net Demand 34,753 30,757 31,107 29,543 36,507 41,733 31,963
% Collected 89.99 93.74 64,75 93.32 88.22 89.07 85.16
TOTALCollection 37,620 35,450 27,150 34,909 39,764 44,992 35,531Net Demand 43,114 39,385 40,236 39,108 46,271 51,985 42,511
% Collected 87.26 90.01 67.48 89.26 85.94 86.55 83.58
Source: Office of Assessor and Collector
- 322 -
resulting in artificially low domestic rates. Metered
domestic-water charges remained unchanged at Rs. 0.17 per cubic meter
from 1959 until 1971 (Table 128). Industrial and commercial properties,
which are mostly metered, had their charges increased in 1965, 1969 and
1971 fr-m an average rate of Rs. 0.40 per cubic meter to a current rate
of Rs. 0.74 per cubic meter. In 1972, these categories of-consumers were,
on the average, charged 190% more than domestic consumers. This pricing
policy, however, reflects neither economic considerations of ability to
pay among domestic consumers, nor cost considerations since costs of providing
larger supplies o: water are if anything lower than for domestic purposes.
Rather, it is the result of haphazard developments over the years. The
full effects of such policy are difficult to evaluate under existing
conditions of restricted supplies and unfulfilled industrial water quotas.
Revenues derived from water charges have been low. The average
current rate is low--and the rate structure for unmetered properties
encourages wastage. Increases in water taxes were required by IBRD as
one of the conditions for the loan-, as shown in Table.
128. Further revisions in the water charge structure are expected
to take place in the near future so that operating revenues from water
and sewerage charges will be more nearly sufficient to cover operating
expenses, depreciation, interest, debt repayment, and about one-third
of capital expenditures for the 1974-1976 period.
Table 128: STATEMENT SHOWING WATER CHARGES ASSESSED ON WATER CONSUMPTIONPREVAILED FOR MAJOR CATEGORIES OF CONSUMERS
Categories of Users 65-66 66-67 67-68 68-69 69-70 70-71 71-72 72-73 73-74Domestic and ResidentialPurposes 1.70 1.70 1.70 1.70 1.70 1.70 2.00 2.00 2.50
Textile Mills, Industries, 4.00 4.00 4.00 4.00 5.50 5.50 6.00 6.00 8.00Lodging and Boarding-houses, Hotels
Railways 1.65 1.70 1.70 1.70 1.70 1.70 2.00 2.00 NA
Bombay Port Trust
--Department Works 4.00 4.00 4.00 4.00 5.50 5.50 5.0 5.50 8.00
-- Non Department Works 1.70 1.70 1.70 1.70 1.70 1.70 2.00 2.00 2.50
Construction Works 5.50 5.50 5.50 5.50 7.50 7.50 7.50 7.50 NA
Oil Installations 4.00 4.00 4.00 4.00 4.00 7.50 7.50 9.00 11..00
Race Course 5.5o 5.50 o .0 5.0 5o.5o 7.50 7.50 9.00 11.00
Bakeries, PrivateHospitals, BEST 2.70 2.70 2.70 2.70 2.70 3.50 3.50 3.50 5.00Properties
Source: Office of Collector and Assessor
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B. Sewerage and Refuse Collection
1. Level of Service-
The Corporation is responsible for the collection, treat-
ment and disposal of sewerage, septic tank wastes, night soil, and
solid wastes throughout Greater Bombay. At present, only the Bombay
district is served by a sewerage system, but the Development Program
proposes that the removal and treatment of effluent should become
BMC's responsibility.
The sewerage system as presently constituted serves
approximately 54% of the total population of Greater Bombay. Estimates
of population served by sewers and those in unsewered areas as of
March 31, 1971, were as follows:
(In Millions)City Suburbs Total
Sewered areas 2.9 0.3 3.2
Partly sewered - 1.7 1.7
Unsewered 0.1 0.9 1.0
Total 3.0 2.9 5.9
The sewerage system serves about 95% of the population
living in the city with the exception of low-lying areas where septic
tanks are provided. However, this system does not benefit the population
equally. Only about 45% of housing units have individual .lavatories;
1/ In this section we draw heavily from IBRD's 'Appraisal Report ofBombay Water Supply and Sewerage Project" April 30, 1973.
-_325
52% have common facilities which, because of over-use and shared
maintenance responsibility often do not function. Particularly
hutment dwellers live in unsanitary conditions. It is estimated
that 280,000 hutment dwellers have access to only 217 public sanitary
conveniences (many of them being only urinals).
Sewerage facilities are still very scarce in the suburbs and
there are no satisfactory alternative facilities. Before the 1951
boundary extension, sewerage facilities existed only in parts of the
suburbs of Bandra and Khar. In the Eastern suburbs, Kurla had some
sewers, but there was a lack of suitable outfall. The remainder of
the suburbs taken over in 1958 by BMC had no sewerage facilities and
there has been little subsequent improvement of the situation. Designs
have been prepared for the extension of the sewerage system, but had not
been implemented by 1973. An estimatid 67 percent of the housing units in the
suburbs have individual lavatories, 26% have shared facilities, and 7%
representing an estimated 440,000 persons, have none. Of the suburban
latrines, some 1.7,000 do not have flushing arrangements. The systems
are overloaded because the installed capacity of pumping and ejector
stations is insufficient to deal with the average dry weather flow.
Sewage is brought by gravity or pumping to eight treatment
plants, which in aggregate have insufficient capacity. Effluents from
the works and raw sewage which has by-passed the works are discharged
into the sea through adjacent (creek or storm water drains. Most of
the sewerage from the city is conveyed to the Lovegrove Sewerage Works
where, after primary treatment, it is pumped to sea through an out-fall,
- 326 -
completed in 1880, .which terminates at about low water level. The
city is at present served by eleven ejector stations and fourteen
pumping stations on the sewers routes, and by five treatment works.
The ejector stations were constructed between 1893 and 1905 and still
house the original equipment. Three of these stations, however, are
currently being replaced by new pumping stations. The suburbs are
covered by three treatment plants built at Versova, Khar, and Ghatkopar.
Provision has also been made for pumping the flow from Bandra to a
sewer in the Dharovi district, but, the link is not-yet operational.
Of the existing eight treatment works, only three are constructed for
biological (secondary) treatment, the remaining works provide primary
treatment only. None of the treatment works has sufficient capacity
to handle the incoming flow, even during dry weather, and excess flows
are by-passed and discharged untreated. The outfalls from Colaba,
Banganga and Lovegrove are directly into the sea, while the flows from
Dharavi and Khar, and Dadar discharge. into Mahim Creek and the drainage
channel leading to the Worli Sluices respectively. The discharge from
the Versova works drains into a grassed, marshy area, and, at the
GhatKopar works settled sewage is sometimes pumped to Deonar for
irrigating reclaimed land near the Corporation's main refuse dumping
ground. Otherwise, it is discharged with excess flows of raw sewage
into a nearby open storm water drain, fanning under roads and
through housing development before discharging into Thana Creek. The
condition of many of the treatment units, especially their mechanical
components, is poor and many units are out of action for long periods
of time or never used. The effective treatment capacity is therefore
-327-
well below the nominal capacity. Water scarcity and irregularity often
poses major problems. Currently 1 million m3 of water and industrial
effluents have to be removed daily. In order to alleviate overflows,
sewers have been connected to storm water drains, but during the monsoon
the surface water completely blocks the sewers and forces mixed sewage
and storm water flows onto the streets,.
Improvement and extension of the sewerage system have been
taken up in the BMC 10-year Development Programme. No definite scheme
has been adopted yet, but as it stands now the costs of -the sewerage
and sewage disposal works are estimated at US$166, i.e. 65% of the
total Development Program. Major works in this area will take place
in the later years of the program since priority was given to the
improvement of the water supply system. However, during the first
major phase of the program the sewerage component will include urgent
works for improving pumping stations, construction of new sewage stations
and construction of branch sewer extensions.
In the unsewered areas, the only facilities for sewerage
collection and disposal are either septic tanks (used in conjunction
with flush toilets or aqua privies) or basket privies: 7,000 aqua
privies, 11,500 basket privies and 8,700 septic tanks are estimated
to exist in these areas. Ground conditions in the area are unsuitable
for seepage pits or disposal trenches thus causing effluent to collect
in low-lying areas. Furthermore, the BMC tank e4ptying service is
inadequate; the available resources are used in efforts to relieve the
more objectionable instances of local flooding, but elsewhere tanks are
allowed to fill up and overflow. The contents of septic tanks and basket
-328 -
privies are dumped into the nearest tidal creek or into suction wells
of the sewage pumping stations. Night soil is frequently tipped over
bridges into the nearest water course and industrial wastes are, in
many instances, discharged directly into open streams or channels.
Since 1957, the Corporation has required all new permanent
properties to have water closets, which may be of the flushing or non-
flushing type, used in conjunction with an approved type of septic tank
where no public sewer is available. The BMC has, however, found it
difficult to ensure that property drainage systems-and septic tank
installations are designed and constructed to required standards.
2. Financial Situation
Until this current fiscal year, when Budget G for water
supply and sewerage works came into existence, the sewerage operations
of the BMC were an integral part of the municipal services and the
accounts were recorded in the Municipal Budget (under head VII "Street
Cleansing and Conservancy, Road Watering and Halakhore Service"). The
Halalkhore service includes all operations which are directly concerned
with removal, treatment and disposal of human excrements and other wastes.
All operating expenses on Halalkhore are recorded under this head, section
C "Halalkhore service, section D and E, Provident Funds" charges and
Pension Fund. Expenditures incurred on debt service are more difficult
to trace since there is only one common debt charges account for halalkhore
and refuse collection. However, a careful look at the loan works budget,
head VII, shows that capital expenditures incurred in the area of refuse
collection are often nil and always insignificant whenever they exist.
-329-
Thus, expenditures on debt service recorded in head VII can be
reasonably allocated to sewerage exclusively. Table 90 showing the
budgetary account of sewerage, is based on this assumption. It should
be noted that the storm water drain system, which was originally
developed as a separate system, is used at certain times to alleviate --
surcharging of the sewerage system. Therefore, part of the operating
expenses incurred by this system should be allocated to the sewerage
system. Expenditures as the SW drain system are recorded in a different
budget head (h-ad VIII with expenditures on roads"and 'public lighting)
and it is impossible to allocate such expenses to the sewerage system.
A more serious problem concerns the computation of debt service. Some
projects inclu'ding both sewerage and drainage works, are recorded under
head VIII with debt service being allocated to this head. A breakdown
between the various components of the works is unavailable. Data
presented in Table 129 (which include only operating expenditures and
debt service recorded in head VII) thus understate current expenditures
incurred on the sewerage system.
Looking now at the financial situation of the sewerage
operations, it can be seen from Table 129 that the BMC has continously
incurred deficits on its operating and current accounts. These deficits
have been increasing since 1968-69 and in 1972-73, only 65% of current
expenditures were financed by revenues derived from sewerage operations.
The remainder was financed by general revenues. The composition of the
current expenditures account indicates, ceteris paribus, that the invest-
ment program of the Corporation regarding sewerage works remained constant
- 330 -
Table 129: BUDGETARY ACCOUNT OF SEERAGE WORKS -BM
(Rs '000)
I. II III IV V VICurrent Operating Debt Current Operating CurrentRevenues Expenditures Charges Expenditures Deficit Deficit
1963-64 13,727 13,533 7,219 20,752 194 - 7,025
1964-65 14,687 14,563 8,546 23,109 124 - 8,422
1965-66 16,903 19,927 7,531 27,458 - 3,024 -10,555
1966-67 17,872 22,676 7,266 29,942 - 4,804 -12,070
1967-68 19,252 24,507 7,875 32,382 - 5,255 -13,130
1968-69 20,358 22,304 7,776 30,080 - 1,946 - 9,722
1969-70 22,297 25,780 7,976 33,756 - 3,483 -11,459
1970-71 24,558 30,678 8,842 39,520 - 6,120 -14,.962
1971-72 26,946 33,831 9,813 43,64 - 6,885 -16,698
1972-73- 36,975 44,409 12,635 57,044 - 7,434 -20,069
1/ Budget estimate
8ource: BYTC Annual Accounts
- 331 -
with the relative share of debt service decreasing from 35% in 1963-64
to 22% in 1971-72. Table 130 shows the relative importance of current
and capital expenditures since 1963-64.
There is no direct charge levied in connection with sewerage,
and the only attributable income is the Halalkhore tax, which is levied
at a rate of 3.5% on all property values with the exception of a few
properties where fixed collection charges arc levied. The fixed charge,
called "halalkhore tax for special services", accounts for approximately
five percent of total revenue (Table 131). This tax is intended to cover
the costs of removing all wastes from privies, cesspools and septic
tanks; however, in practice, it has been used to finance all expenses
incurred on sewerage (Table 132).
The Corporation plans to institute a new sewerage tariff on
April 1, 1974, whereby a tax based on water consumption will be
introduced in addition to the existing tax based on properties values.
The tariff is likely to be based on the following:
i) The Halalkhore tax, which will produce a dimin.ishing
revenue, will be directly charged on those premises which are not
sewered and for which the service is necessary to empty their various
disposal systems. This tax will probably be replaced after several
years by a fixed service charge, but the projections demonstrate only
the probable recovery necessary through 1980-81 using a tax base to
recover costs.
ii) Premises which are not metered for water supplies, i.e.
those which pay a water tax, will pay a sewerage tax as a percentage
of property value to meet their share of sewerage cost.
1/ IBRD, Appraisal of Bombay Water Supply and Sewerage Project,April 30, 1973.
- 332 -
Table 130: CURRNT AND CAPITAL EXPENDITURES. -ON SEWERAGE WORKS
.s ( 0oo)
Capital Ex-penditures
Current Capital Total as Total IMC
Expendi- Expendi- Expendi- Expenditures Capital Ex-tures turesi tures per capita penditures
(Rs).. (%)
1963-64 20,750 6,1h1 26,893 6.0 9.8
1964-65 23,109 7,h25 30,534 6.6 12.0
1965-66 27,458 5,208 32,666 6.8 5.0
1966-67 29,942 5,410 35,352 7.1 4.4
1967-68 32,382 7,421 39,806 7.7 4.7
1968-69 30,080 6,992 37,072 6.9 6.3
1969-70 33,756 6,584 4o,340 7.3 7.4
1970-71 39,520 5,871 45,391 7.9 6.1
1971-72 43,644 12,260 55,904 9.4 11.6
1/ Approximated--as expenditures recorded under Head VII of the Budget Account
exclude expenditures on plant and machinery (negligible).
Source: BMC Annual Accounts
- 333 -
Table 131: REVENUES FROM HALALKHORE TAX
(Rs'oo)
Halalkhore Tax Halalkhore Tax Relative Shareon Rateable Value for Special Service of .Tax on
Rateable Value (%)
1960-61 11,532 8o5 93.4
1961-62 11,554 682 94.4
1962-63 11,606 831 93.3
1963-64 12,978 749 94.5
1964-65 13,813 875 94.0
1965-66 15,201 1,701 89.9
1966-67 16,L41 1,431 91.9
1967-68 18,087 1,165 93.9
1968-69 19,240 1,118 94.5
1969-70 20,881 1,)17 93.6
1970-71 23,531 1,027 95.8
1971-72 25,149 1,797 93.3
1972-73 35,000 1,975 94.6
Source: BMIC Annual Accounts
- 334 -
Table 132: STATEMENT OF HAALKHORE TAX COLLECTED. AND EXPENDITURES INCURRED ON SEWERAGE
SERVICES
(Rs'OO0)
1967-68 1968-69 1969-70 1970-71 1971-72
Income
Sewered Area 13,781 14,113 14,711 1,184 17,221
Unsewered Area 5,471 6,2415 7,586 9,373 9,726
Total 19,252 20,358 22,297 24,557 26,947
Expenditures
Sewered Area 14,982 13,798 15,666 18,064 18,221
Unsewered Area 7,149 6,479 7,686 9,902 11,921
Total 22,131 20,277 23,352 27,966 30,142
Source: BMC Annual Accounts.
- 335 -
iii) Premises which are subject to metered water supply will
incur asewerage charge based on the metered water consumption.
iv) A sewerage benefit tax based on property values to be
charged on all premises in Greater Bombay to recover the costs of:
a) surplus capacity of installed assets which do not yield immediate
or direct benefit to those charged by metered charges or sewerage tax;
and b) facilities to be provided, e.g. latrines. It is expected that
the BMC will collect the new sewerage taxes and charges with the water
taxes and charges, but the actual collection system has yet to be
determined.
336_-
XIII. BCIBAY ELECTRIC SUPPLY AND TRANSPORTATION UNDERTAKIM
A. Electric Supply
1. Services Provided
The BEST.
within the city limits up to Mahim and Sion, covering an area of 57 square
kilometers. Most residents of the Corporation are supplied electricity by
BEST, with the balance supplied by two private entepries~, ibay_Suburban
Electric Supply, Ltd. and Thana Electric. This allocation of responsibility
between the three has been challenged by the BEST which proposes
to take over Bombay Suburban when the license granted by the Maharashtra
State Electricity Board (MSEB) to this enterprise expires. The BEST's move
is due largely to the profitable state of the electricity business. The
surplus generated by these additional activities would contribute to the
financing of increasing deficits incurred in its transportation branch.
The BEST buys bulk supply from the Tata Electric Companies, which
operate both generation and transmission facilities and historically have
been the sole power suppliers in the Bombay area. Tatas generate most of
the energy that they sell in their ownmpower stations; however, increasing
shortages have occurred in recent years and have been met by purchases from
the MSEB. MESB is responsible for the generation, transmission, and
distribution of electric energy in the State of Maharashtra. The Board
has no direct responsibility in the Greater Bombay area where it only provides
energy to Tatas when the need arises.
Tables 133 to 135 present selected statistics on the electricity
distribution system operated by the BEST. Little will be said about the
337
Table 133: SUMARY OF STATISTICS IN THE ELECTRICITYDISTRIBUTION SYSTEM - BM
AS CF MARCH 31, 1972
Total number of receiving stations 15
Total installed power transformer capacity 374 MVA
Maximum demand recording during 1971-72 2 51 .46 MA
Total number of substations 934
Total distribution transformer capacity 585.7 M7A
Total energy purchased fram Tatas 1,151.59 Million units
Total number of consumers 435,082
Total number of house service meters 482,903
Source: BEST Staff
338-
Table 134: COINCIDENT AXIMUM DIEAND, POWER TRANSFRMCAPACITY, DISTRIBUTION TRANSFORKER CAPACITY
- AND NUMBER OF TRANSFORMIM SUBSTATIONS IN THESYSTEM
(1947-48 to 1971-72)
Total TotalCoincident Capacity of Capacity of NunberMaximn Receiving Distribution of
Year Demand Stations Transformers TransforningMW MVA MVA Substations
1947-48 52.7 56 99.2 247
1950-51 66.1 92 124.6 282
1955-56 82.2 108 154.5 313
1960-61 121.9 216 252.9 405
1961-62 134.6 264 276.7 435
1962-63 145.3 274 304.5 455
1963-64 150.3 274 328.0 488
1964-65 155.5 274 348.5 529
1965-66 163.6 274 378.7 570
1966-67 168.9 274 418.9 616
1967-68 171.8 304 468.5 689
1968-69 179.4 344 505.0 780
1969-70 184.5 364 568.2 814
1970-71 200.7 374 579.7 890
1971-72 213.5 374 585*7 934
Source: BEST Staff
- 339 -
Table 135: STATISTICS ON RECEIVING STATIONS
Capacityas on Individual Maximum Energy Received
31-3-72 Demand MVA Million UnitsReceiving Station MVA 1970-71 1971-72 1970-71 1971-72
Colaba, 30 10.8 12.0 )
Apollo 32 30.8 28.8 )
Oval 20 16.8 18.96 )
Ballard Estate 20 15.8 19.68 ) 614.0 650.5
Esplanade 30 23.0 28.08
Grant Road 32 30.0 30.0 )
Malabar Hill 30 21.6 24.84 )
Kussara 30 18.7 21.96 )
Mahalaxmi 30 23.8 26.64 )
Worli 30 25.2 25.92 ) 25. 273.1
Parel 20 15.9 18.0 )
Kingsway 20 15.4 13.6 )
Mahim 20 20.0 18.2 ) 215.7 228.0
Dharavi 20 17.4 17.4 )
Wadala 10 6.5 9.36 )
Whole System 374 *232.6 *251.46 1085.2 1151.6
* These figures are coincident demand ,,cie System.
Source: BEST Staff
- 340 -
generation and transmission sides of the electric supply system here, since
the municipal finance concerns of this study are related more closely to the
distributinn side
There is no permanent program of rationing the supplc
However, maj or disturbances have usually resulted from failure at the.gezratiozn.
level: Rationing was iintroduced in the regioii during parts of 1968 and 1969..
due to inadequate monsoon.- A state-wide power cut was introduced in 1971-72
due to the failure of the monsoon and breakdowns in the generation sets.
In the latter case, power was cut by 8 percent for non-essential installations
and 2 percent for essential consumers. According BEST sources 1/ the power
supply position in the Western Maharashtra region improved considerably in
1970-71 with the commencement of full-scale comercial production of
electric power at the Tarapore Atomic Power Station and the commissioning of
theN ik Thermal Station. However, an urban survey mission on Bombay carried out
by the IBRD in 1970 Jindicates that the asuDOly situation is in very delicate balance
and projections show that over the next years it will become increasingly
strained and that available reserves at maximum demand will get smaller and
smaller with an increasing risk of acute shortages in the event of plant
outages."
The BEST operates under conditions of a rather small growth in
demand, which is due to the fact that since Bombay City is highly developed
there is little substantial new development in the area. The number of total
units sold increased at an annual rate of 6.2 percent from 1960-61 to 1971-72
(Table 136). This increase is due in part to an increase in the number of
1/ BEST, Report of the General Manager, 1971-72.i/ IBRD, Report on Bombay, Annex II, the Public Utilities, April 15, 1971.
Table 136: UNITS SCLD UNDER DIFFEREN CATEGORIESFOR LAST TEN YEARS (000 UNITS)
Categories Under Which 63-6 '64-65 65-66 66-67 67-68 68-69 69-70 70-71 71-72 72-73Electricity Is Sold
Commercial Lighting 116,416 131,877 137,656 "147,175 150,012 156,945 135,182 149,220 159,751 149,472and Fans
Commercial Heating, etc. 33,690 57,274 80,180 98,279 96,429 106,056 135,089 152,155 174,295 172,473Residential Lighting 127,413 138,790 146,124 158,309 241,703
and Fans 267,807 278,-744 305,623 316,768 299,076Residential Heating 94,788 100,187 108,760 116,492 31,2381Lighting for Religious ---- ----- ----- ----- 11,636
and Charitable Insti-tutions j 19,104 16,269 19,067 31,518 41,175
lifts ad Pumps Used for --- 4-- -- -- 77-geligious and CharitableInstitutions
Large and Motive Power 161,994 162,351 179,032 196,764 215,219 225,406 235,620 255,196 269,204 263,671Consumers
General lUrpose Motive 181,34 164,382 144,451 122,976 94,802 97,523 98,721 100,552 103,853 110,4l5Power Consumers
Traction, Trolley, Buses 2,612 711 884 1,049 935 W43 1,072 664 ----- -----Street Lighting 5,305 5,723 6,132 9,661 12,730 15,741 17,429 19,342 21,178 22,220Temporary Supply ----- ----- ----- ----- ----- 1,246 2,408 2,740 2,655
TOTAL SUPPLY 723,561 761,296 803,220 850,7064 855,181 889,026 919,371 1,004,228 1,079,306 1,061,188
Source: BEST Staff
F
342
consumers and in part to an increase in average elect-ricity consumed. The
number of consumers increased by 3.9 percent per year during this
period (Table 137). For all types of consumers, the consumption of
electricity per capita increased from 1.95 to 2.68 units, or 2.2 percent
per year. Exact data on the population served are not available, but
a rough estimate based,on the city population shows that per capita consumption
for residential purposes increased markedly. Residential, commercial,
and industrial consumption take approximately equal shares of total units sold
( Tables 136 and 138). However, the revenues derived from the major
categories of consumers show that in 1971-72 industrial and commercial
consumers accounted for 29.2 percent and 44.4 percent of total revenues
respectively as compared to only 24.2 percent for residential users (Tables
139 and 140).. Actual figures are not yet available for recent years.
The increases in tariff which took place in October 1972 may
introduce some changes in these relative shares since tariffs were not
increased uniformly for all types of consumers. Residential tariffs (R, 3)
were increased by 20 percent; commercial rates by 8 percent; premises with
commercial and/or residential and/or industrial loads (RC(LV)) by 12.5 percent,
and most industrial tariffs by over 20 percent. (See Table 141). The major
change is expected to take place in revenues derived from commercial users.
Low tension tariffs are based on consumption subject to a minimum monthly
charge. High tension tariffs are in two parts, with one demand charge and
one energy charge and, in addition, a few other charges imposed in specific
instances. None of the existing tariffs contain any price differential between
peak and off-peak power demand.
Table 137: NUlh3ER OF CONSUMERS, SERVICE LINES, CONNECTEDLOAD AND METERS IN THE SYSTEM
(1947-49 to 1971-72)
Services(Excluding
Street ConnectedYear Lighting Consumers Meters Load
(In thousands) (in MW)
1947-48 28.4 108.2 123.3 230.3
1950-51 31.2 134.9 160.0 268.6
1955-56 34.8 201.4 234.8 312.9
1960-61 38.5 286.8 351.0 478.5
1961-62 39.4 302.4 375.2 514.6
1962-63 40.0 316.4 396.7 564.6
1963-64 40.8 330.3 415.7 60.2
1964-65 41.5 343.7 433.7 647.9
1965-66 42.2 356.5 451.9 686.8
1966-67 43.0 369.6 470.6 731.2
1967-68 43.7 382.7 469.7 766.6
1968-69 4.3 399.0 467.6 817.9
1969-70 44.8 412.4 464.5 861.2
1970-71 45,6 425.1 474.1 910.1
1971-72 46.3 435.1 482.9 951.4
Source: BEST STAFF
Table 138: UNITS SCLD UNDER DIFFERENT CATEGORIESFOR LAST TEN YEARS - % DISTRIBUTION
Categories Under Which 1963 1961, 1965 1966 1967 1968 1969 1970 1971 1972
Electricity is Sold
TOTAL SUPPLY (100%) 723,561 '761,296 803,220 850,704 855,181 889,026 919,371 1,004,228 1,079,306 1,061,188
Commercial Lighting 16.09 17.32 17.14 17.30 17.54 17.65 1h.70 14.86 14.80 14.09
and FansCommercial Heating, etc. h.66 7.52 9.98 11-5 11.28 11.93 14.69 15.15 16.15 16.25
Residential Lighting 17.61 18.23 18.19 18.61 28.26
and Fans I 30.12 30.32 30.43 29.35 28.18
Residential Heating 13.10 13.16 13.54 13.69 3.65
Lighting for Religious 1.36
and Charitable Insti-tutions j 2.15 1.77 1.90 2.92 3.88
Lifts and Pumps used for ----- ----- ----- 0.06 1
Religious and CharitableInstitutions
Large Motives and Power 22.39 21.33 22.29 23.13 25.17 25.35 25.63 1 25.141 2&.94 24.85
ConsumersGeneral Purpose Not:ive 25.o6 21.59 17.98 14.h6 11.09 10.97 10.74 10.01 9.62 10.141
Consumers
Traction, Trolleys, Bases 0.36 0.09 0.11 0.12 0.11 0.05 0.12 0.07 ----- -----
Street Lighting 0.73 0.75 0.76 1.14 1.h9 1.77 1.90 -.1.93 - 1.96 2.09
Temporary Supply ----- 0.14 0.24 0.25 0.25
Source: BEST Staff .
Table 139: UNITS SOLD AND REVENUES BY CATBORY OF CONSUMERSFOR SELECTED YEARS - BMC
1971-72 1968-69 1966-67 1963-64Units Amount Units Amount Units Amount Units Amount
(1) Commercial 159,751 40,057 156,945 29,300 147,715 24,582 116,h16 19,569lighting,fans, etc.
(2) Commercial 174,295 23,977 106,057 11,665 98,279 7,862 33,690 2,491heating, etc.
(3) Residential ) 348,286 34,828 ) 286,911 28,692 158,309 19,789 127,413 15,927lighting ) )and fans ) )
(4) Residential ) ) 116,482 6,990 94,788 5,503heating, etc.)
(5) Large 269,204 27,489 225,406 19,367 196,764 14,193 161,994 9,932motive powerconsumers
(6) General purpose 103,853 14,536 97,523 10,730 122,976 10,477 181,344 13,431motive powerconsumers
(7) Traction 443 35 1,049 63 2,612 144
(8) Street lighting 21,178 2,661 1!,741 1,974 9,661 773 6,306 424
(9) Temporary 2,70 625
supply
Total 1,079,307 144,053 889,026 101,363 851,245 74,729 723,563 67,421
1/ Including lights, pumps of charitable and religious institutions.
Source: BEST Staff
Table 140: UNITS SOLD AND REVENUES BY CATEGORY OF CONSUMERSPERCENr DISTRIBUTION
1971-72 1968-69 1956-67 1963-64Units Amount Units Amount Units Amount Units Amount
(1) commercial 14.8 27.8 17.7 28.9 17.4 32.9 16.1 29.0lighting,fans, etc.
(2) Commercial 16.1 16.6 11.9 11.5 11.6 10.5 4.7 3.7heating, etc.
(3) Residential ) 32.3 24.2 32.3 28.3 18.6 13.1 17.6 23.6
lighting )and fans )
(4) Residential ) 13.7 9.4 13.1 8.2heating, etc.)
(5) Large 21.9 19.1 25.4 19.1 23.1 19.0 22.4 14.7
motive powerconsumers
(6) General purpose 9.6 10.1 11.0 10.6 1h.5 14.0 26.1 19.9
motive powerconsumers
(7) Traction 0.1 0.0 0.1 0.1 3.2
(8) Street lighting 2.0 1.8 1.8 1.6 1.1 1.0 0.7 0.6
(9) Temporary 0.3 0.4
Source: Best Staff
Table Ila: ELECTRIC TARIFF
1972-73 Onward 1969-1972I. Non-Tndustrial Tariffs-
1 . Residential premises; premises R, S 12 P per unit subject to a minimum 10 P per unitused for religious, charitable, monthly charge of Re 2.00educational purposes
2. Premises used for office, C 17 P per unit subject to a 25 P per unitbusiness, trade, cmmerce, minimu.n monthly charge ofprofessional service Rs 5.0
3. Premises with coamercial and/or RC(LV) M.D., charge Rs 18.00 per KVA of M.D. charge Rs 16/KVA ofresidential and/or industrial billing demand plus energy char billing demandloads supplied at medium 11. P/-mit plus fuel adjustment. energy charge 8.5 P/unitpressure (15/24OV) subject to plus additional surcharge2/ plus fuel adjustment char1a minimum consumption of 250,000 plus surcharge Zor power factorV plus additional surcharge.units per annum under aereement below 85%for a minimum period of 2 years
4. Premises with canmercial and/or RC(HV) M.D. charge Re 15.5 per KVA of M.D. charge Rs 1 4 per KA ofresidential and/or industrial billing' demand billing demandloads supplied at 6600 or 11,000 7; energy charge 10P per unit energy charge 7.5 P/unsubject to a minimum consumption fuel adjustment char 1I/ fuel adjustment chargei'of 500,000 units per annum for a additional surcharge." additional surcharge.minimum period of 5 years surcharge for power factor
below 85W/
5, Public gardens, traffic signals, SL 12 P per unit 12 P per unitstreet lights..... belonging topublic bodies
II. Industrial TAriffs
6. Premises with industrial loads QP(I) 17 P per unit subject to a 14 P per unitsupplied at medium pressure minimum monthly charge of Rs 5.00(413/240 V) with common metera.except for consumption of item 8
7. Premises with industrial loads GP(II) 16 P per unit plus 1.5 P per 12.5 P per unitsupplied at medium pressure reactive lagging unit subject to(415/240 V) with separate meters, a minimum monthly charge ofexcept for conswption of item 8 Rs 5.00
8. Premises qualifying for GP (I) or L (GP) 27 P per unit subject to a minimum 25 P per unit
GP (II) tariffs for lights, passenger monthly charge of Rs 6,00lifts, and pumps for sanitary anddrinking water
9. Premises with predominantly indus. LND(LV) M.D. charge Rs 1.5 per KVA of M.D. charge Rs 13 per KVA of
trial loads supplied at medium billing demand billing demand
pressure (415/240 V) with miLdmum energy charge 8.5 P / unit energy charge 7.00 P /nit
consumption of 250,000 units per fuel adjustment charge/ fuel adjustment char, 97
annum for a minimum period of additional surcharge additional surcharge-
2 years surcharge, 5 or power factorbelow 8562-
10. Premises with predominantly in- GIP(HV) Bnergy charge 16 P per unit Bnergy charce 12 P per unit
dustrial loads supplied at 6600 1iactive unit charge 1 P per unit Reactive unit charge 0.8 P/
or 11,000 V with minimum consump- fuel adjustment charRe.. unit
tion of 20,000 units a month for additional surcharge-- fuel adjustment chare.
a minimum period of 5 years surcharge or power factor additional surcharge=below 85,-
11. Promises wiTh predominantly in- IND(HV) M.D. charge Rs 13.20 per KVA of K,D. charge Rs 11. per KA
dustrial loads supplied at 6600 billing demand for the first 1 ,000 demand for the first 1 ,000 KVA
or 11,000 V with minimum con3ump- K7A and Re 12.30 per KVA for the and Re 10.25 per KVA for the
tion of 500,000 units per year rest rest
for a minimum period of 5 year3 energy charge energy charge
6.86 P/unit for 1st 500,000 units 5.72 P per unit for the first
6.4h P/unit for next 1,000,000 units 500,000 units consumed6.16 P/unit for the rest during the month
fuel adjustment charse-7 5.37 P/unit for the next
additional surchargE,Z 1 million units
surcharge for power factor 5.13 P per unit for te rest
below 85;LY fuel adjustment charge
Note: See second page of Table for footnotesand source.
Table 11: ELECTRIC TARIFF (Continued) 348
1972-1973 Onward 1969-1972
III. Tariff for Temporary Suply
12. Temporary supply (for all TS 27 P/unit subject to a minimum 20 P per unitpurposes) charge of Rs 2.00 I number of days
for loads given through a separate
single phase meter of Rs L.00 X -number of days for loads giventhrough a separate 3-phase meter
13. Stand-by Supply Sb 27 P/unit subject to a minimum 25 P per unit subject to a(all purposes) charge for units equal to 15 times minimum charge equal to 15 times
the connected stand-by load in K.W. the connected load in K.W.
Meter Rentals (Mater rent charged per meter per month)
1. Single phase meters RS 0.50 Rs 0.50
2. Three phase meters Rs 2.00 Size up to 30 amps Rs 1.00Size over 30 anps Rs 2.00
3. Three phase meters with Rs 5.00 - Size up to 30 amps Rs 3.00maximum demand (KW) indicators Size over 30 amps Rs 4.00
4. H.V. Metering equipment Rs 10.00
5. Reactive energy meters N.I.
1/ Fhel adjustment charge is based on the recorded consumption whenever a similar charge is levied by Tatas to theBEST. The rates will be the same as those levied by Tatas for consumptibns recorded during corresponding months.
4/ Additional surcharge is levied when a similar charge is levied by Tatas to the BEST due to variations in duty,taxes, rates, etc.
3/ Surcharge for power factor below 85%. For each complete 1% fall in the average power factor below 85% therewill be a 1/2% power factor surcharge in the total bill amount excluding F.A. charge.
Source: BEST Staff
- 349 -
Ad effective tariff rate was computed for the period 1963-1972 by
taking average revenue per unit sold by major category of consumers
(Table l42 ). Unfortunately, it was not possible to allocate the fuel adjustments
charge which was recorded as a separate item for all users; these charges have -
been altogether excluded and thus the effective tariffs computed for the
categories subjected to these charges are underestimated. This effective rate
was Rs.0.25 for commercial lighting and fans, Rs. 0.14 for commercial heating
and general purposes motive power consumers, and Rs. 0.10 for large motive
power consumers and residential uses. This tariff structure exhibits an
obvious rate bias against comercial lighting and general purpose power
consumer and residential consumers share an equally favorable treatment.
Such a difference in treatment can hardly be explained in terms of differences
in cost supply since if anything, supply to large consumers can be expected
to be lower than to individual consumers. Such considerations may have
guided, to scme extent, the tariff structure of the BEST in earlier years when
residential tariffs were the second highest after those imposed on commercial
lighting and fans. However, successive changes in tariffs have meant
increasing charges to all consumers with the exception of the residential
category, whose tariffs were actually lowered in 1967.
/ Only data for these years are available. However, they reflect thechanges which took place in tariff rates over the period under study.
- 350 -
Table 1h2: REVENUES PER UNIT - BY MAJOR CATEGORY.. .. . .. . .OF CONSUMERS-
1963-64 1965-66 1966-67 1967-68 1968-69 1971-72Rs/Unit Rs/Unit Rs/Unit Rs/Unit Rs/Unit Rs/Unit
(1) Camercial lighting,fans, etc. 0.17 0.16 0.17 0.18 0.19 0.2
(2) Comercial heating 0.07 0.08 0.08 0.10 0.11 0.14
(3) Residentiallighting, fans 0.13 0.13 0.12 0.10 ) 0.10 0.10
(4) Residential heating 0.06 0.06 0.06 0.06 )
(5) Large motive powerconsi=ers 0.06 0.07 0.07 0.08 0.09 0.10
(6) General purposes motive
power consumers 0.07 0.08 0.08 0.11 0.11 0.14
(7) Traction 0.06 0.06 0.06 0.07 0.07 -
(8) Street lighting 0.08 0.08 0.08 Q.10 0.10 0.12
(9) Temporary Stand-by - - - - - 0.23
Source: BEST Staff
- Table 143: BUDGETARr POSITION OF ELECTRIC SUPPLY(Rs 000)
2 3 5 .6 7 8.CurrentIncome Operat-
including Operating Current -ing Current
Current General Expendi- Over- Expendi- Deficit/ Deficit/own Adm. tures Debt head tures Surplus Surplus
Tncm6 Income tures Charges Charees (Rs '000) 1-3 . 1-6 2-6
1960-61 49,hh2 51,160 29,853- 7,539 5,648 42,853 +19,589 +6,589 8,307
1961-62 5h,657 56,772 32,086 8,341 7,143 47,570 +22,511 + +7,087 9,202
1962-63 60,496 62,848 36,002 8"925 6,078 51A005 +24,494 +9,491 11,843
1963-64 72,415 74,393 b6,978 9,318 6,505 62,8C0 +25,437 +9,614 11,592
1964-65 80,500 83,112 51,006 9,812 7,503 68,32.1 +29,49h +12,179 14,791
1965-66 85,623 87,984 56,614 10,335 8,242 75,191 +29,009 +10,432 12,793
1966-67 94,555 98,308 60,453 10,44 8,737 79,631 -*34,102 +14,921 18,674
1967-68 104,965 109,941 70,372 12,606 9,649 92,627 +34,593 +12,338 17,314
1968-69 111,828 115,306 74,292 10,0952/ 9,176 93,563 +37,536 +18,265 21,7h3
1969-70 127,599 130,174 86,178 15,19512 1 7,438 108,811 +41,421 +18,788 21,363
1970-71 IL8,500 151,500 101,236 13 ,66 0-'/ 6,903 121,799 +47,264 +26,701 29,701
1971-72 158,675 161,975 112,513 13, 91 4V2/ 7,929 134,356 +L,6,162 +24,319 27,619
1972-71. 167,512 170,562 117,701 17,4039,161 11,268 +9,811 +23,286 26,296
1/ Approximates BEST 2/ Amount used for Sinking Fund Installments (in Rs '000)1969-70 NA
Devreciation (Rs '000) 1970-71 9,7061971-72 9,71
1960-61 = 2,L98 1972-73 NA1961-62 = 3,0001962-63 - 3,3001963-64 = 3,000 3/ Interest on Internal Funds1964-65 - 3,000 1968-69 5,4801965-66 - 3,000 1969-70 6,2281966-67 = 3,000 1970-71 6,7351967-68 = 500 1971-72 6 S11968-69 = 5,908 1972-73 (Est5 8,0001969-70 = 6,3081970-71 = 6,7861971-72 - 8,5711972-73 = 7,625
Source: BEST Staff
- 353 -
Debt charges as shown here include the repayment of the principal
and interest allocated every year to the sinking fund and the interest
paid on internal funds. It was not possible to break down debt charges on
public loans and debt service on internal funds for the period before 1968/69.
The method adopted for sinking fund provision was changed in 1966-67 when
the installments were reduced. According to BEST sources, the interest rate
which was thereafter adopted was more realistic than the previous one. A
second change ocurred in 1968 when it was decided that sinking fund
installments would be adjusted on a basis of the provision for depreciation.
This means that a certain proportion of the annual depreciation allowance
is now allocated to the sinking fund. This method understimates debt charges
and current expenditures. The first, "current own revenue", includes all
revenues from electric supply. The second, "current income", includes the
income from general administration allocated to the electric branch. The
BEST allocated these incomes until 1968-69, when the practice was discontinued.
The method adopted in the earlier years by the BEST is used here to allocate
these Ancome in the most recent years.
The budgetary position of the electric supply branch indicates
that surpluses on the operating and current accounts were continuously
generated during the period under consideration. Until 1968-69, incaMes have
more than kept up with increasing current expenditures since larger operating
and current surpluses were attained every year. This trend seems to have
continued in more recent years, but when adjustments are made in debt charges
in order to take account of the sinking fund installments made from the
-epreciation Fund, surpluses have been, in effect, stagnant since at least
1970-71. On this basis, current expenditures increased at an annual rate
of 11.7 percent as canpared to 11.1 percent for revenues over the 1960-1972
period. The rate of growth in current expenditures would have been even
higher if a consistent method for allocating overhead charges had been
adopted throughout the period.
In sum, it seems clear that the financial position of the electric
branch is deteriorating. According to BEST sources, the tariff increase
which took place in 1972 will merely slow down this deterioration. It is
also expected that debt charges will become heavier over the next few years
as external assistance is increasingly relied upon to finance capital works.
A breakdown of current expenditures per unit sold shows that current cost
increased by 81 percent from 1960 to 1971. The largest part of the increase
results from successive increases in the cost of energy purchased (Table 18)4)
which is by far the largest component of current cost with a relative share
of about 60 percent. Tatas adjusted its tariffs three times, in 1963, 1967,
and 1969. The most recent increase of 20 percent which took place in October 1972
is not yet reflected in the accounts-(see Table 145). Altogether, the tariffs
increased by 135 percent during this period. The relatively low share of
debt charges (about 10 percent in 1971-72) results not only from the use of
sinking funds for the financing of capital works, but also from a relatively
low level of investments. The utililation of current surpluses could also
explain this low ration. However, as it will become clear later, these
surpluses are used in part to cover the deficits incurred in the transport
branch of the BEST.
Table 14: BREAKDOWN OF CURRENT EXPENDITURE PER UTNIELECTRIC SUPPLY
Current CostCost of
per 1000 Energy Establish- Other DebtUnits Produced ment Charges ChargesSold per unit per unit per unit per unit(Rs) (Rs) (Rs) (Rs) (Rs)
1960-61 76.61 36.23 13.47
1961-62 77.09 36.00 8.75 18.83 13.51
1962-63 74.37 36.95 8.54 15.87 13.01
1963-64 86.81 47.82 8.18 15.57 12.88
1964-65 89.76 - 68.55 8.76 19.56 12.89
1965-66 93.61 51.01 9.29 20.h4 12.87
1966-67 93.61 51.73 9.82 19.98 12.28
1967-68 108.31 60.01 10.63 22.93 Th.74
1968-69 105.4 60.57 10.69 22.92 11.36
1969-70 118.65 67.07 11.10 23.95 16.53
1970-71 127.55 73.41 11.08 29.46 13.60
1971-72 124.80 76.18 11.67 24.06 12.89
1972-73- 138.87 85.30 11.92 25.25 16.40
1/ Based on Estimates
Source: Data provided by BESI
Table 145: BEST ELECTRIC SUPPLY REVENUES(Rs 000)
Estimate60 61 62 63 6h 65 66 67 68 69 70 71 72
Sale of energy
by meter h5,890 50,767 55,688 66,639 74,365 78,213 85,340 93,489 99,983 114,900 132,087 142,1o 156,ooo
To tramways 301 190 93 71 ----- ----- ----- ----- ----- ----- ----- ----- -----
To trolley buses - ----- 72 43 . 53 63 71 35 102 66 ----- -----
TOTAL 46,190 50,957 55,816 66,783 74,08 78,266 85,403 93,560 100,019 115,002 132,154 142,410 i56,ooo
Street Lighting 1,1'52 1,320 2,002 1,881 1,804 2,409 3,960 5,692 6,714 7,277 9,979 9,672 10,692
Sales Service 1,318 1,522 1,673 2,714 3,114 3,321 3,353 3,330 3,346 3,563 3,910 3,884 4,370
Showroom 720 762 854 816 814 915 1,055 1,154 ----- ----- ----- -----
Sales, line & repairs ----- ----- ----- ----- ------ ----- ----- ----- 1,140 1,144 1,100 1,080 1,235
Miscellaneous 62 97 151 186 285 680 624 1,229 609, 614 1,357 1,629 1,550
TOTAL 49,Ub2 54,657 60,496 72,415 80,500 85,623 94,555 104,965 111,828 127,599 168,50 158,675 173,847 .
Source; BMC Annual Accounts
B. Transportation
1. Services Provided
Public transportation facilities in Greater Bombay are under the
responsibility of the Municipal Government and the Central Government. The
Government, through Western Railway and Central Railway, operates commuter
passenger rail services in addition to their main line passenger and freight
service. The BMC, through the BEST Undertaking, provides all internal
J:oad transport services within the municipal limits of Greater Bombay, except
pfor some very limited privately operated bus services to a few factories
and other special places. Outside Greater Bombay, bus services are provided
by the Maharashtra State Road Transport Corporation (a nationalized
coporation), which provides inter-city services and services between
Bombay and other areas but does not carry any internal local traffic. As
might be expected, public transportation is by far the most important means
of transportation in Bombay, it is estimated that over 90 percent of the
traveling public depend on public transport. Rail and buses assume an
equally important role with each carrying roughly 2.6 million person trip
daily. Approximately one million people travel short distances by taxis
and rickshaws, mainly in the central business district; and 300,000 people
use cars for the journey to work. Since rail services are operated by
Central Government agencies, they are excluded from this report, which is
restricted to consideration of local government finance.
At present, the BEST operates only bus services, however, the
tradition of this company is also linked to other means of transportation,
such as minibuses and tramways. Tramways were operated for about 90 years
until 1964 when the service was discontinued and at its peak the BEST had
a fleet of 438 trams which carried 580,000 passengers daily. By 1964,
however, the stock was reduced to 62 trams of which only 55 were in use. -u
During that period, tramways were carrying an average of 113,279 passengers
per day, which compares very unfavorably with the 1.8 million daily
passengers carried by buses. The tramway operation was regularly producing
current deficits during the latter years of its operation.
Trolley bus service was introduced in the early 60s. The experiment
was short lived and at the height of operation, the BEST owned 12 trolley
buses, of which 9 were in service; the average number of passengers carried
per year never exceeded 9 million. In 1971, when the last trolley buses had
outlived their normal life span and the quality of the service was clearly
deteriorating, the trolley buses were replaced by buses. The budgetary
position of this service was also weak.
Bus services were begun in 1926 in the Afghan Church and Crawford
Market lines.. In 1973 the BEST operated 136 routes consisting
of approximately 1676 kilometers. The route structure provides very extensive
coverage of both the City and the suburban areas of Bombay, having undergone
a major expansion in 1950 and 1957 when the suburbs and extended suburbs
were placed under the jurisdiction of the BYC. Until then, bus services were
restricted to the City of Bombay. The majority of the routes in the suburban
areas tend to run north and south as do the railroads. But buses also
operate on the comparatively few existing east-west roads. Many of the
bus routes run nearly parallel to the ril commuter system. There is some
- 359 -
integration between the railroad and bus operations--the bus system
providing some feeder services to the rail commuter service, and all
stations are served by the bus system.
As of April 1973, the bus fleet consisted of 1,402 buses which was divided
into 777 single decker vehicles and 635 double decker vehicles including
100 articulated trailer buses. Most of the single-deck buses have total
seating and standing capacities between 55 and 65 passengers, (Table 146).
The range of capacity for the double deck buses is approximately 80 to
90. The articulated trailer buses have a capacity of about 100, almost
entirely seated. The capacity for standees account for about 18 percent
of the aggregate carrying capacity. The BEST also owns a few mini-buses which
are used in some sparcely populated areas in the suburbs, and, in particular,
in the Industri.al Estates, which are the newly established Colonies of the
Corporation and of the Maharshtra Housing Board. The scheme was drawn up
Table 116: PASSENGER CARRYING CAPACITYAS OF APRIL 1973
Number Carrying CaDacityType of Buses of Buses Seating Standees Total
Double Decker 635 51,538 5,893 57,431
Single Decker 777 31,607 12,988 44)50/
Total 1,412 83,145 18,881 102,026
Source: BEST Staff
- 360 -
in 1971-72 anid consists of none man, operated minibuses on a flat fare
system". The fleet is composed of buses of at least 3 manufacturers.
In 197172, Xor ekample, orders were placed with Ws Ashok Leyland Ltd.
for cometized Titan Chagsis and Viking Chassis and semi-articulated trailer
buses, with Ws Telco for T.M.B. chassis, and with M/s Mahindra Owen Ltd.
for semi-articulated trailer buses. There are at least eight different
model single-deck buses in the fleet and a total of 29 different t-ypes
when seating configuration is considered. A number of seating model
combinations appear in the fleet only two or three times. The abundance
of model types and seating configurations probably result in inefficient
maintenance and operating practices; it suggests the need for larger
inventories of spare parts and a large number of maintenance practices and
rules to handle the large variety of buses in the fleet. It is difficult
however, to specify exactly the additional cost incurred.
Single deckers and semi-articulated trailer buses are produced
in India. The double decker chassis are also being developed locally, but
the major components of the chassis, i.e. chassis frame, front axle, and
real axle, are still imported from the United Kingdom. Efforts are made
to assemble double decker chassis with indigeneous components of Comet
vehicles in order to reduce capital cost and bottlenecks in the expansion
of the fleet resulting from import restrictibns imposed by the Governient
of India. The imported double decker Titan chassis alone costs about Rs 210,000.
X prototype chassis indigeneously made was put in service in 1968. Doiible-
decker vehicles are preferred by the BEST for use in the City. However, due
to financial and technical constraints the number of double deckers in
service declined from 732 in 1963-64 to 6L5 in 1971-72.
- 361 -
The average bus age was 8.75 years in 1971 and 7.50 in 1972; it
was 7.7 years for single decker vehicles and 10.2 years for double decker
vehicles. Buses are scrapped by the BEST after seven years or half a
million kilometers for single decker vehicles, or 12 years or 750,000
kilometers for donble decker vehicles, whichever is higher. These standards
are basically the ones laid down by the All India State Road Transport
Association, with the exception for double de0ker vehicles, where the
standard is 12 years or 900,000 kilomers. The Association also suggests
that the "average" age of the fleet should be four years for single decker
vehicles and 6 years for double decker buses. However, due to a shortage
of new chassis, the BEST had to postpone its scrapping programs more
than once aid in 1971-72, 41.7 percent of the single deckers and 44 percent
of the double deckers were overaged, as compared to only 33 percent and 36
percent respectively in 1970-71.
Basic indicators of the bus service performance indicate that
passengers increased at an average annual rate of 4.6 percent as against
2 percent annual increase in total passenger carrying capacity over the
period 1961-1971. The larger increase in the number of passengers does
not seem to have resilted in an increase in the average bus load as is
seen from the number of passengers per kilometer, which remained nearly
constant. The increase in carrying capacity resulted exclusively from a
more intensive utilization of the fleet. The total number of buses owned
did not significantly change over the period and even declined after 1966-67
1/ It is not clear how the data on the number of passengers is obtained.
It seems that informations come from single ticket sales which do not
always represent single trips and that passengers traveling free such
as policemen are not included.
2/ It does not mean that crowding did not increase at certain times.
- 362 -
while the number of double deckers decreased by 15 percent. The coefficient
of fleet utilization, which was already quite high in 1963, was raised about
90 percent in 1972, Y as a result of better maintenance services on buses
which resulted in fewer breakdowns. Another important factor contributing
to capacity increase was the increase in the number of trips per bus and
per day. The total numberof kilcmeters per year increased by 50 percent,
which was in part due to additional bus routes and to an increase in the
number of daily trips per-bus* The number of seating acrommodations was
reduced in favor of standing accommodations and productivity campaigns were
donducted among conduct6rs and drivers. In 197t, for example, the capacity
was increased by approximatdy 4.2 percent by introducing single decket
vehicles with larger standing capacity. An incentive pay plan for conductors
and drivers was introduced a few years ago since there was same problem
getting the conductors and drivers to fill the buses. Bonuses are given
on the basis of the collections which encourages some overloading. The2/
modalities of the scheme are not known in their current form, bat in 1970
the conductor was given targets of Rs 1,500 per month for city operations
and Rs 2,QOO per month for suburban operations.
In spite of these policies, the performance of the system had been
steadily deteriorating. On average, passengers wait for 30-35 minutes as
compared to a 20 minute wait only a few years ago. During peak hours, the
waiting time can extend to two to three hours and buses are almost always
1/ The average number of buses in service over average effective fleet.
The utilization figures may be somewhat distorted as the effective fleet
excludes buses undergoing major overhaul. It is estimated that never
more than 3 percent of the fleet is being overhauled at one time.
2 IBRD, Report on Bombay, Annex III, Transportation, April 30, 1971.
3/ IBRD Staff Estimates
- 363 -
overloaded. Traffic is slow, particularly in the center of the City, as
a result of increasing traffic congestion. The average speed for buses is
estimated at 13 kilometers/hour in the metropolitan area and 0-5 kilcmeter/
hour in the downtown area. The problem is also compounded very substantially
by the presence on the roads of many pedestrians, handcarts, oxcarts,
horsecarts, stray oxen and other vehicles. Very few traffic lights exist
and in ma'ny places roundabouts or traffic circles are used in place of
appropriate signals. There is no special lane for buses but the establish-
ment of such traffic rules are under consideration by the BIC. Indeed,
the mobility problem is overwhelming in the city. It results mainly from
the concentration of economic activities near the Southern ti of the Island
while in recent years, most population growth has taken place in the out-
lying areas. The residential areas which are for most part located in
the Northern suburbs are sanetimes up to 30 miles from the places of
employment. This situation worsens every year as population in the suburbs
increases faster than the number of city dwellers; this is not surprising
since the city is already overcrowded and offers few opportunities for further
development. In addition, as given the flat fare structure
operated by the BEST gives people an incentive to locate in the suburbs where
accommodations are also cheaper. The future development of this Bombay area
with the creation of the Twin-City, which is being developed as a counter-
magpet to the City, does not allow an overly optimistic forecast (see Table 1 4 7).
Table 147 shows further, as was previously pointed out, that the
bus operations have generally run substantial benefits, which are largely
financed by internal transfers from the electricity account.
- 364 -
Table 147: TRANSPRTATION BRANCH - BEST9
2 3 1 5_ *6 7 8 DeicitFinanced
Operating Current fr=Expendi- Expendi- Operating Current Electricity
Own Including tures Debt tures Deficit Deficit RevenuesIn,ome GA Income (6-L-5) Charges Overhead (3+h+5) (1-3) (1-6) (2-6)
1960-61 68,353 70,726 56,027 9,625 7,803 73,455 12,326 - 5,102 - 2,729
1961-62 70,934 73,048 58,h39 9,543 7,143 75,125 12,495 - 4,191 - 2,077
1962-63 77,352 79,704 67,784 10,589 6,067 84,440 9,568 - 7,088 - 4,736
1963-64 88,634 90,612 78,574 10,943 6,505 96,022 10,060 - 7,388 - 5,41o
1964-65 93,838 96,450 86,321 9,510 7,503 103,334. 7,517 - 9,496 - 6,884
1965-66 94,846 97,207 96,240 8,928 8,242 .113ý,U1 - 1,394 -18,564 - 16,203
1966-67 100,962 104,714 99,872 8,654 8,736 117,262 1,090 -16,300 - 12,548
1967-68 114,852 119,828 114,731 9,710 - 9,649 134,090 121 -19,238 - 14,262
1968-69 132,328 135,806 122,014 .-"4,466 9,176 135,656 10,314 - 3,328 150
1969-70 145,839 148,414 144,624 4,128 10,558 15',304 1,215 -13,h65 - 10,890
1970-71 159,610 162,612 147,036 3,640 10,397 161,073 12,574 - 1,63 1,539
1971-72 170,634 173,940 152,327 3,641 11,325 167,293 18,307 3341 6,647
1972-731-/ 169,990L/ 173,05451 179,840 5,352 12,837 198,029 - 9,350 -28,039 - 2,975
1/ Approx. actuais given by BEST.
DeDreciation
1960-61 6851961-72 6801962-63 1501963-6U 1601964-65 1801965-66 -1966-671967-68 -1968-69 9,7621969-70 10,7281970-71 10,h241971-72 11,6311972-73 8,h0
Scurce: BMC Annual Accounts
. . -. J