Hyderabad: At a time when civic bodies of Mumbai and Pune maintain healthy financial reserves, the Greater Hyderabad Municipal Corporation (GHMC) has emerged as one of the most financially strained civic bodies in the country, burdened with debts exceeding Rs 6,000 crore.
In stark contrast, the Brihanmumbai Municipal Corporation (BMC) holds fixed deposits worth Rs 82,000 crore, establishing its position as India’s wealthiest municipal corporation. BMC generates revenue through various sources, including property tax, profession tax, entertainment tax, grants from central and state govt like GST, advertisement tax, water usage charges, fees from documentation services, rent received from municipal property, and funds from municipal bonds.
As per the annual budget (2024-24) data of various civic bodies, the Greater Chennai Corporation, Bruhat Bengaluru Mahanagara Palike, and Kolkata Municipal Corporation have lower financial obligations, with debts and deficits around Rs 2,000 crore from governmental bodies, banking institutions, and other financial entities, substantially below GHMC’s borrowings.
According to GHMC, the majority of borrowings were allocated for works under the strategic road development plan (SRDP), comprehensive road maintenance programme, strategic nala development plan, and housing projects. Under SRDP, GHMC borrowed more than Rs 4,000 crore. In fact, before 2014, the civic body maintained a revenue surplus of Rs 500 crore annually, but currently, it is paying Rs 180 crore a month towards the principal amount and interest.
State govt needs to support GHMC
Experts highlight GHMC’s inefficiency in collecting various dues, including taxes, fees, trade licences, and arrears, resulting in excessive dependence on borrowings for executing development projects in the city. For example, the civic body managed to collect merely Rs 100 crore in trade licence fees from 1 lakh commercial taxpayers, despite having a potential revenue of Rs 400 crore from 3 lakh eligible taxpayers, they said.
“The financial health of GHMC, which drives Hyderabad’s development, has become worrisome. Prior to 2007, when the city was under the Municipal Corporation of Hyderabad, we maintained a revenue surplus. The subsequent years witnessed declining govt support for municipalities. The responsibility of housing projects and flyover construction, which should be with the state govt, has strained GHMC’s resources. Additionally, the govt, which collects road taxes, needs to share a portion with GHMC, as the latter bears the responsibility of road maintenance,” said M Padmanabha Reddy, president of Forum for Good Governance (FGG).
GHMC awaits Rs 11,000 crore arrears
On the other hand, GHMC states that recovering property taxes accumulated over the past 10-15 years could resolve their financial difficulties. The outstanding amount of around Rs 11,000 crore has remained unpaid for several years. “Despite sending letters to various departments previously, payment responses have been minimal. Even with a one-time settlement scheme offering a 90% interest waiver on accumulated taxes, there hasn’t been significant improvement in tax collection,” said a senior official in the revenue wing, GHMC.
Officials say that govet institutions account for around 70% of the total property tax arrears, including establishments such as the state secretariat, revenue department, Osmania Medical College, prohibition and excise, Gandhi Hospital, South Central Railway, TSRTC, and roads & buildings department.
