In a letter to Municipal Commissioner K Nalinakshan, Kumar, who took charge of the finance department about five months ago, has asked that the disbursement of ex-gratia payment - Rs 100 crore - to civic staff be halted from next year. Over 70 per cent of the BMC's income is spent on maintaining establishment alone, and just 30 per cent on providing civic amenities to the 1.25 crore population of Mumbai.

However, former commissioner, Girish Gokhale had already signed an agreement with 37 civic unions in 1997 promising thatex-gratia would be paid for the next three years. Nalinakshan has reportedly held talks with concerned officers in this regard but is yet to take a decision.

Ironically, it was Gokhale who had first raised the need to stop payment of ex-gratia. While presenting the budget last year, Gokahle had stated that ex-gratia would have to be withdrawn temporarily to bridge the deficit. ``I have no other practical solution than to resort to the unpleasant decision of differing the disbursement of ex-gratia. As and when the financial position permits in future, this will be reviewed,'' he had stated. Gokhale had justified his proposal by saying that the benefits available to civic staff were far more than in the state government. While labourers draw a minimum of Rs 5,282 in the BMC, the state government staff in the same category get Rs 2,295.

Then, the corporation was facing a Rs 317 crore deficit. Gokhale had even cautioned corporators that if they did not accept his proposal, he would have to resort to a drasticcut in expenditure on civic services. But when unions howled in protest, the corporation had to backtrack.

Pointed out a senior civic officer, the state government gives ex-gratia of 8.33 per cent of the basic salary, but there are no special provisions for civic staff. The ex-gratia for the civic staff was Rs 16.27 crore in 1985, it has reached Rs 111.05 crore now, almost seven times in 12 years. ``In fact, the ex-gratia was paid as a welfare measure to encourage the staff to discharge their duties better. But they are now claiming it as a matter of right,'' complained the officer.

The administration plans to prune hefty pay packages. Senior civic officers also complain of excess staff, but add that the staff cannot be retrenched. ``The only way to cut down would be to stop recruitment for the next couple of years,'' said the officer. Although the civic administration is dragging its feet on filling up the 1,000-odd vacancies, a directive from the state government to fill the posts may well put thesqueeze on the BMC's cash-saving efforts.