BMC Plans Water Tax Hike for 2025-26 Amid Rising Expenditure
Mumbai: The Brihanmumbai Municipal Corporation (BMC) is considering a hike in water taxes for the financial year 2025-26 to counteract rising operational costs. This proposal comes a year after the BMC’s attempt to increase charges in 2023-24 was thwarted following an order from then-Chief Minister Eknath Shinde.
The new proposal, which is under legal review, could lead to an increase in the current water tax rates, which are INR 6 per 1,000 litres for residential consumers and INR 50 per 1,000 litres for commercial and industrial users. The BMC’s standing policy, established 12 years ago, permits an annual water tax hike of up to 8 percent, which had not been fully utilised in recent years. While the water department has faced an increase in its costs, such as a 15 percent rise in its overall expenditure, the last increase in water tax occurred in 2022-2023, at a modest 7.12 percent. Civic chief Bhushan Gagrani confirmed that the proposal is under legal examination before it is finalised. The BMC has presented the case for an increase based on rising costs, including administrative expenses, the royalty paid to the state government for the supply of water from the Bhatsa dam, and the costs associated with water purification and infrastructure development.
Despite the pressing need to raise funds for the water department’s increasing expenditure, officials are concerned that the proposal may be delayed due to the upcoming BMC elections. “The proposal is still in the legal review stage, and no immediate increase in water charges is planned,” Gagrani stated. The decision to raise water tax will also depend on the political climate, especially with elections looming. In the past two years, the BMC had made smaller incremental increases to water charges — 5.29 percent in 2021 and 7.12 percent in 2022 — but this proposed hike is seen as a necessary step to cover the water department’s rising costs. Currently, the BMC supplies 3,950 million litres of water per day, with costs continuously rising in line with inflation and infrastructure needs. The legal review is expected to provide clarity on whether the proposed hike will be implemented before the financial year 2025-26 begins.
