The deficit, the largest ever faced by the Brihanmumbai Municipal Corporation, has led the civic body to the inevitable decision to milk citizens to cushion the gigantic shortfall. It knows, however, that the biggest hole in its balance sheet is its galloping expenditure, which for the first time appears to have slipped out of the administration's control.

At the end of 1995-96, the deficit was Rs 8.04 crore, rising to Rs 110.38 crore in 1996-97. In 1997-98, it shot up to a whopping Rs 328.78 crore. And in March this year, a worried commissioner dropped the bombshell: the deficit had touched an all-time high of Rs 376.09 crore.

How could the corporation generate the additional income? Would merely increasing the tax burden and raising octroi chargessuffice? Till 1993-94, octroi, the largest revenue-earner, was sufficient to cover establishment costs, which accounts for about 70 per cent of expenditure at present. It reasoned that the only way to augment income was to raise civic taxes substantially, though income from this source accounts for a meagre amount compared to the 70 per cent which octroi brings in. Last year, BMC raised Rs 1,286 crore from octroi and Rs 280 crore from civic taxes. But the shortfall was still pegged at Rs 96.09 crore. To widen the tax base, the 1998-99 budget has proposed to raise the general, street and fire taxes as well as the education cess. However, thus far, only the proposal increasing the street tax has been accepted. Water tax, though remained static. While this surprised no one, the question is, how much steeper will the graph get.

While the general, street and fire taxes have not risen substantially over the last three years, the education cess is proposed to be raised by 3.5 per cent.

Municipal CommissionerGirish Gokhale said despite the `limited' revenue of Rs 280 crore netted by way of taxation, there remains a Rs 96.09-crore shortfall. He says there is no scope to generate additional revenue from taxes and hence revenue needs to be sourced from other avenues.

Since it is very difficult to meet the ever-increasing expenditure on basic civic services with the limited sources of income, he says, ``It is inevitable to revise taxes at regular intervals.''. But, he adds: ``The need to increase these taxes at reasonable intervals has been neglected, which has forced us to face this unprecedented situation.''

The BMC raised street tax by five per cent for the first time in 1993. This year, it went up 10 per cent. The tax is expected to generate Rs 64 crore this year. The ceiling on increasing the education cess restrained the administration from proposing to raise it by more than 3.5 per cent. As per the BMC Act, the education cess can be increased by a maximum 12 per cent and last year's 8.5-per cent increaseleft little scope to raise it this year.

The commissioner had, in fact, submitted a proposal to the Standing Committee to increase the education cess by a maximum 12 per cent in November last year, when it realised it was faced with a Rs 376-crore deficit. The proposal was initially turned down though it was later accepted. The corporation's income is also augmented by licence fees and receipts from markets but that is far from substantial. Hiking these will hardly compensate, Gokhale feels.

Though water tax has remained static in this year's budget, Mumbaikars are still feeling the pinch from last year's raise. When the administration had raised the water tax, it failed to clarify that the sewage tax would automatically go up by 50 per cent of the water tax hike. Water tax varies with the nature of one's dwelling, and charges are categorised into different slabs. For residents of chawls, the tax was raised from 60 paise to Re 1 for 1,000 litres, for people residing in buildings, it was increased to Rs 2per 1,000 litres and those living in buildings which are more than seven-storeys, the charge is Rs 2.75 per 1,000 litres.

But till expenditure is substantially streamlined and wastages are plugged taxes collected from the exchecquer will be only so much water down the drain.