Commissioner Bhushan Gagrani Unveils Record ₹80,952 Crore Plan With Green Bonds And Mega Infrastructure Push

Mumbai, Feb 25: Municipal Commissioner Bhushan Gagrani on Wednesday unveiled a highest-ever budget of Rs 80,952 crore for 2026–27, along with a surplus of Rs 89.84 crore, while avoiding any new direct taxes. Though no fresh mega projects were announced, the budget prioritises infrastructure projects, with Rs 48,164.28 crore allocated towards capital expenditure.

Key focus areas include the ambitious Versova–Dahisar–Bhayander Link Road, the Gargai Dam to bolster long-term water supply, and a desalination project to boost the city’s water supply. To finance these projects, the civic body plans to mobilise Rs 13,765.74 crore from fixed deposits (FDs) and Rs 14,295.86 crore from special funds.

Retaining its status as the country’s richest civic body, the BMC proposed a budget of Rs 80,952.56 crore for 2026–27, marking an 8.77% increase over last year’s Rs 74,427.41 crore outlay.

Gagrani presented the budget to Standing Committee Chairman Prabhakar Shinde on Wednesday, marking his final budget before retiring on March 31. The capital expenditure has been pegged at Rs 48,164.28 crore, reflecting a significant 11.59% rise over the revised estimate of Rs 39,159.51 crore for 2025–26.

However, despite being the first budget after the BJP assumed power in the civic body, no new projects have been announced, with the administration choosing instead to prioritise the completion and funding of ongoing major initiatives.

First time to raise bonds

For the first time, the BMC has announced plans to raise municipal green bonds to fund sustainable infrastructure projects such as wastewater treatment and desalination plants, aiming to strengthen revenue while promoting climate-resilient development.

The move follows the Union Budget 2026 announcement by the Finance Minister offering a Rs 100 crore incentive for a single municipal bond issuance of Rs 1,000 crore, signalling strong policy backing for market-based urban financing.

Building on this momentum, the BMC also plans to monetise its revenue-generating assets through an Infrastructure Investment Trust (InvIT) to raise funds for major capital projects.

Source of income

The backbone of the civic body’s ambitious spending plan rests on a strong revenue outlook. The largest contributor continues to be compensation in lieu of octroi, projected at Rs 15,550.02 crore for 2026–27. This is followed by Development Plan (DP) fees and premiums estimated at Rs 12,050 crore—reflecting sustained real estate and construction activity—and property tax collections projected at Rs 7,000 crore.

The one-time premium charged for utilisation of additional FSI/TDR and fungible FSI for redevelopment of buildings on BMC leasehold plots has been increased from 5% to 7.5% for residential users and from 10% to 12.5% for non-residential users.

Also, on the lines of MHADA, for the first time BMC has stepped into the sale of 426 affordable houses, from which it generated Rs 300 crore this year, and another Rs 150 crore is expected in the upcoming financial year.

Water tax, entertainment tax

Under the amended Maharashtra Entertainment Duty Act, the responsibility for collecting Entertainment Tax has been transferred to local authorities. The Revenue and Forest Department has extended the exemption till September 30, 2026.

The BMC has submitted a proposal to the State Government seeking to formalise the collection of Entertainment Tax by the civic body, which will commence once the government grants approval and issues the official notification.

“We expect to generate Rs 400–500 crore annually from entertainment tax,” said Gagrani. Meanwhile, Mayor Ritu Tawde has assured that the annually proposed 8% hike in water tax will be stalled. Gagrani, however, clarified that no increase in water tax has been proposed in the current budget.

Pending dues

The estimated revenue income for 2026–27 is pegged at Rs 51,510.94 crore, marking a robust 19.35% increase over the 2025–26 Budget Estimates.

However, total pending dues from various State Government departments under the jurisdiction of the BMC stand at Rs 10,948.58 crore as of January 31, 2026. This includes Rs 7,241.44 crore in grant-in-aid pending from the State Education Department.

Dip in FDs

The budget indicates a marginal dip in the reserve funds of the BMC. The civic body currently holds Rs 81,449.32 crore in FDs, down from Rs 81,774.42 crore in 2025–26. Of the existing reserves, Rs 44,826.23 crore is earmarked for liabilities such as provident fund, pension, gratuity and contractors’ security deposits, leaving Rs 36,623.09 crore available for infrastructure works. Meanwhile, the total size of infrastructure projects undertaken by the BMC stands at a massive Rs 2.44 lakh crore.

Focus on ambitious projects

The BMC has earmarked Rs 9,650 crore for its Bridges Department in 2026–27, a sharp increase of over 70% from the revised estimate of Rs 5,519 crore. The Roads and Traffic Department has been allocated Rs 6,875 crore.

Major capital provisions include Rs 5,690 crore for sewage treatment plant projects, Rs 5,520 crore for road concretisation, Rs 4,700 crore for the Mumbai Coastal Road Project (Versova–Bhayander stretch), and Rs 2,650 crore for the Goregaon–Mulund Link Road (GMLR).

Amid mounting concerns over air pollution, the BMC has nearly doubled the allocation for its Environment and Climate Change Department to Rs 159 crore, up from Rs 76 crore last year.

Additionally, Rs 6,475 crore has been set aside for the proposed desalination plant at Manori and the Gargai Dam project, a key initiative backed by Chief Minister Devendra Fadnavis to strengthen the city’s long-term water security.

Financial assistance for BEST

Since 2012–13, BMC has consistently supported BEST Undertaking through financial assistance amounting to Rs 12,028.81 crore till January 2026. A total provision of Rs 1,000 crore is proposed in fiscal year 2026–27 as a grant.

Gagrani says

In his last budget speech, Gagrani said, “The budget reflects BMC’s commitment to strengthen Mumbai’s civic infrastructure, improving essential services and ensuring balanced, sustainable growth. It represents our vision of a modern, inclusive and contemporary metropolis, guided by fiscal prudence and citizen-centric governance. Efforts are being made to augment the revenue of BMC to expedite infrastructural growth and to provide civic services and facilities.”

The budget estimate will now be deliberated by the Standing Committee members, followed by discussions and approval in the general body meeting (BMC House). The budget approval is expected in mid-March.

Also Watch:

BMC budget in the past few years

Year – Budget (in crores)
2021–22 – 35,962
2022–23 – 43,491
2023–24 – 52,553
2024–25 – 65,180
2025–26 – 74,427
2026–27 – 80,952

BMC’s fixed deposits

Year – FDs (in crores)
2021 – 78,745
2022 – 91,690
2023 – 86,401
2024 – 82,737
2025 – 79,498
2026 – 81,449 (up to January)

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