PMC Revenue Hit Hard by Real Estate Slump
Pune Municipal Corporation (PMC) tabled its budget for 2025-26, forecasting a significant revenue shortfall stemming from the city’s real estate market slowdown. With a budget of Rs 12,618 crore, marking a Rs 1,017 crore increase over the previous year, the PMC is grappling with lower-than-expected earnings from its primary sources: building permissions and development charges.
The figures from the 2024-25 fiscal year are telling. While the PMC had initially set an ambitious target of Rs 2,492.83 crore from building permissions and development charges, by January 2025, only Rs 1,312.13 crore had been collected, leaving a substantial deficit two months ahead of the financial year’s close. The reasons for this gap are clear — a slowdown in the real estate sector has reduced the volume of construction activity, directly impacting the civic body’s revenue streams. “Given the slowdown in the real estate market, there is a 10 per cent deficit in revenue collection from building permissions and development charges until December 2024,” said PMC Commissioner . The trend, he noted, mirrors the situation from the previous year, indicating that the real estate sector is not facing a crisis but experiencing slower growth, particularly compared to the explosive expansion seen in recent years.
The situation has forced the PMC to temper expectations for the 2025-26 fiscal year. Revenue projections from the same source for the upcoming year have been set at Rs 2,899.99 crore, a 16 per cent increase over the current year’s target. However, experts suggest this growth projection could be overly optimistic, given the stagnation in the real estate market and the broader economic factors at play. Despite the caution surrounding real estate, some city officials remain hopeful. Pune’s City Engineer pointed out that while the overall growth may be slower, it does not necessarily indicate severe damage to the sector. “There is still one month left in the current financial year, and historically, the highest revenue generation typically occurs in the final month,” he said. This reflects the cyclical nature of the real estate market, where a significant portion of building permits and development charge collections are concentrated towards the close of the financial year.
Building permissions and development charges are the PMC’s most important sources of revenue, surpassing even property tax and Goods and Services Tax (GST) in significance. The slowdown in these key areas raises concerns about how the civic body will fund infrastructure projects and urban development plans for the future, particularly in a rapidly expanding city like Pune. The growth trajectory, once fueled by a booming real estate sector, is now under strain, with potential repercussions for urban planning and development initiatives. With infrastructure needs continuing to increase, the PMC will have to explore alternative revenue sources or adjust its fiscal strategies to accommodate the shifting landscape. The long-term implications for Pune’s sustainability and eco-friendly goals remain a critical consideration. As urbanisation continues, it will be essential for the city’s leadership to balance real estate development with environmental sustainability, gender-neutral policies, and equitable urban planning. Pune’s future will depend on finding ways to build a resilient and sustainable economy that does not rely solely on fluctuating sectors like real estate.
The coming months will be crucial for the PMC, as it works to balance revenue shortfalls with the urgent need to invest in the city’s future. Whether or not the proposed fiscal strategies will bear fruit will depend largely on how effectively the PMC can navigate the ongoing slowdown and adapt to a rapidly changing urban environment.
