Every year, usually in February, the municipal commissioner presents the BMC's budget, and every year the coverage follows the same pattern: one large headline number, a list of big projects, a line about property tax, and then silence until the next February. I used to read it that way too. Then I started opening the actual documents, and discovered that the budget is one of the most revealing things the city publishes about itself, if you know where to look.
A very large number, and what it hides
The BMC's budget is the largest of any municipal body in India, and the estimates for 2026-27 put it at roughly ₹81,000 crore, larger than the budgets of several Indian states. That figure alone tends to provoke two opposite reactions: "so why are the roads like this?" and "surely that is enough to fix everything". Neither is quite fair until you understand what the number contains.
To begin with, the BMC does not present one budget but several. There is a general budget covering most civic functions, and separate budgets for education, for water supply and sewerage, and for improvement schemes. BEST, the corporation's transport and electricity undertaking, has a budget of its own. Headline figures sometimes combine these and sometimes don't, which is one reason numbers in different news reports rarely match.
Second, the headline mixes two very different kinds of money, which I will come to shortly.
Where the money comes from
The BMC's income has changed shape considerably over the last decade.
- Octroi and its replacement. For decades, the corporation's single largest source of revenue was octroi, a tax on goods entering the city. Octroi was abolished in 2017 when the Goods and Services Tax came in, and the BMC has since received compensation from the state in its place. This shift made the corporation more dependent on transfers from above, and the question of how long and on what terms that compensation continues is one to watch in any given year's documents.
- Property tax. This is now the most important revenue the BMC raises on its own. Mumbai moved to a capital-value-based system in 2010, under which tax is linked to a property's assessed value rather than its notional rent. Smaller residential homes have received significant relief in recent years, which is popular with residents and also narrows the tax base; both things are true at once.
- Development charges and premiums. Whenever a building proposal buys additional floor space, pays for fungible FSI or seeks certain concessions, it pays the corporation. This income rises and falls with the real estate cycle, which means that the city's finances are, to a degree, tied to the pace of construction.
- Water and sewerage charges, fees, licences and interest income make up much of the rest.
That last item deserves a note of its own. The BMC has for years held very large sums, in the tens of thousands of crore, in fixed deposits with banks. Part of this money is earmarked for specific purposes, such as employee provident funds and contractor deposits, and part represents reserves built up in years when spending lagged behind income. The interest is useful, but the deposits have also been drawn down to fund large capital projects, and how quickly that happens is one of the more consequential questions in the city's finances.
Revenue versus capital: the distinction that matters
The single most useful habit when reading the budget is to separate revenue spending from capital spending.
Revenue expenditure is the cost of running the city: salaries and pensions, fuel for garbage trucks, electricity for pumping stations, medicines for municipal hospitals, routine repairs. It recurs every year and grows steadily, and a large share of it is effectively committed before anyone makes a decision.
Capital expenditure is money spent on building or substantially upgrading assets: new roads, bridges, water tunnels, sewage treatment plants, hospitals. This is where the big announcements live, and it is also where the gap between promise and delivery tends to be widest. Historically, the corporation has often spent noticeably less of its capital allocation than it budgeted, whether because of delayed tenders, pending approvals, land disputes or litigation. A large capital allocation is a statement of intent, not proof of work.
So when you see a headline budget number, the first question to ask is: how much of this is capital, and how much of last year's capital allocation was actually spent? The documents usually contain both the budget estimate and the revised estimate for the previous year, and the gap between them tells its own story.
The big-ticket projects
In recent years, a significant share of capital spending has gone to a handful of very large projects: the Mumbai Coastal Road, the Goregaon–Mulund Link Road, sewage treatment plants, large water supply works, and an extended programme of converting roads to cement concrete. There are also plans for desalination, flood mitigation and hospital upgrades.
Large projects are not inherently a problem. A city of Mumbai's size needs them, and some of them can only be done by the corporation. But they do crowd out smaller, less visible spending, and they lock in commitments that stretch across several budgets. When reading any year's documents, it is worth noticing how much of the capital allocation is spoken for by projects already under way, and how little is left for new work in the wards.
How to read the documents yourself
The budget documents are published on the BMC's portal at portal.mcgm.gov.in, usually as a set of PDFs covering the commissioner's budget speech, the budget estimates and supporting statements. They are long, formatted for accountants, and occasionally inconsistent between versions. Here is how I approach them.
- Start with the commissioner's speech. It is the narrative version, setting out priorities, new schemes and the broad revenue picture. Read it first, but treat it as the pitch.
- Find the summary tables. Look for the abstract of receipts and expenditure, which breaks down income and spending by head. This is where the real shape of the budget sits.
- Compare budget estimates with revised estimates and actuals. For any line you care about, look at what was budgeted last year, what was revised, and, where available, what was actually spent.
- Look for your ward. Ward-wise allocations are not always easy to find, but some departmental statements do break works down by ward. Search the documents for your ward's name.
- Follow up on specifics. If a project near you appears in the budget year after year without progress, that is a precise, answerable question for your corporator, your ward office, or an RTI application.
Why a resident should bother
A budget is a city's priorities written in numbers. The speeches and press releases tell you what the corporation wants to be seen doing; the tables tell you what it can afford and what it has chosen. Our society secretary, who has spent thirty years dealing with the ward office, once told me that he learned more about the BMC from one afternoon with the budget than from a decade of complaints, because it finally showed him why some things were always "under consideration". You do not need to be an accountant to read these documents. You need an afternoon, a little patience with PDFs, and a willingness to ask the question that the headline number never answers: yes, but was it spent?
