Wait a minute. Is Mumbai not the richest civic body in the country? And it has funds shortage? Despite sitting on real estate whose value if greater than gold? How come?
The answer, dear reader, is a bit complicated. Despite having responsibility of providing governance services like water, sanitation, garbage collection, traffic management, schools and, of course, hospitals and a hundred other services, the city has very little autonomy in how it collects its revenue. Before the national rollout of Goods and Services Tax (GST), it used to get nearly Rs 8,000 crore revenue through octroi. That had to be sacrificed as a pre-condition for signing up to GST. Now the city gets a share of GST that comes to the state. For that the city has to depend on the kindness and generosity of Mantralaya. That’s because there is no automatic and uncontroversial formula. What if all the other 23 municipal corporations also start asking their share of GST? On what basis to give Mumbai more than a lion’s share?
Thus we are led to a rather sorry state, where the municipal commissioner, the executive boss of the city, has had to write to the chief minister that the city cannot fund the 5,000-bed contagious diseases hospital. This is badly needed in the times of the pandemic. Not just the city or state, but the whole country needs to step up expenditure on healthcare. It has to double, or even triple. That includes hospitals, equipment, training for medical and paramedical professionals, primary clinics, and subsidy on health insurance to the poor and needy. Why is Mumbai shying away from taking the lead?
Mumbai’s aggregate income is about 2 per cent of national income, i.e. around Rs 4 trillion. If it has genuine revenue autonomy as envisaged in the historic 73rd and 74th constitutional amendments, then it should have garnered at least a modest 10 per cent of local income as a tax base. That would be a budget of Rs 40,000 crores. Surely that would suffice to fund a 5,000-bed hospital, which is going to be around for at least 50 years. This is an investment into the city’s future, and can surely be funded with some incentive thrown in for commercial usage of the land.
The city hopes to build a nine kilometre coastal road for Rs 13,000 crore, which will benefit mainly car owners. There are also other competing demands on funds, for projects such as the underground metro and