After over 100 years, budgets of BMC and BEST to be merged to plug financial losses?

By  Shashank Rao | Posted  21-Mar-2017

After over a century, budgets of BEST Undertaking and BMC to possibly be merged to plug financial losses

Representational Image
Representational Image

Last month marked the first time in history that the Union Budget was merged with the Railway budget. Now, Mumbai's authorities are planning a budget merger of their own. Talks are on to merge the budgets of the Brihanmumbai Electricity Supply and Transport (BEST) Undertaking and its parent organisation, BMC. In fact, the BEST budget has been independent for longer than the Railway budget. While the Railway budget has been presented separately for 92 years, BEST has done so for 111 years.

"Both the BMC and BEST are now scrutinising the possibilities and nitty-gritties of the merger - legally, financially, operation-wise," said a senior official from BEST.

This will be a marriage of convenience; while BEST is bleeding financially, the BMC is the richest municipal corporation in the country. This year, the Undertaking showed losses to the tune of R590 crore, and it has not paid salaries to their 42,000 employees for the month of February, amounting to arrears of Rs 184 crore. BEST general manager Jagdish Patil said they will have to borrow the money to provide the salaries by March 24.

The dismal numbers sparked panic among officials. Sources said that Patil gave a detailed presentation to BMC chief Ajoy Mehta on possible solutions, including a merger. BEST also owes the BMC as much as Rs 700 crore, but officials hope this will be converted into grants. "We are taking loans to repay our loans. That is the reason we are now thinking of merging the budget of the two bodies," said a BEST official.

Across India, BEST is the only municipal body that has a separate budget and is expected to generate its own funds. History experts state that when BEST was first formed in 1905, the Committee members had power to decide bus fares and electricity tariffs, but all this is decided by other regulatory bodies now. Thus, there is little relevance left for the BEST Committee. In fact, on March 20, the BEST Workers Union - which had threatened to go on strike on March 21 but later withdrew - demanded a complete merger of the two organisations.

Rs 61k cr: BMC's wealth
92: Number of years Railway budget was separate
Rs 590 cr: BEST's budget deficit
111 yrs: Number of years the BEST budget has been separate