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For Mumbai makeover, Maharashtra asks for Rs 50,000 crore from 15th Finance Commission

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It’s the state’s largest ever demand for Mumbai, through which it hopes to power infra projects in the city.

Mumbai: The Devendra Fadnavis-led Maharashtra government has sought a special grant of Rs 50,000 crore for its makeover of Mumbai, its largest ever for the city, from the 15th Finance Commission.

The government’s demand for Mumbai, through which it hopes to fund various showpiece infrastructure projects, forms the lion’s share of the total amount of Rs 80,102 crore it wants in state-specific grants from the Finance Commission.

Besides the grant for Mumbai, the government has sought Rs 25,000 crore for the development of Vidarbha and Marathwada regions and thematic grants worth Rs 5,102 crore for judicial infrastructure, forest and green cover, environment conservation and preservation of cultural heritage.

Proposing the special grant for Mumbai in its 70-page memorandum to the commission, the Maharashtra government said, “As is being pointed out in all representations to the earlier finance commissions, the nature of the Mumbai Metropolitan Area is such that it needs grant support, of the kind as Delhi NCR has received. However, the Central support has been minimal, and we have gone ahead with own funds or through long-term loans from international agencies or through BOT model. Each approach has its own implications.”


Also read: 15th Finance Commission has a new headache: States want more funds from Modi govt


The 15th Finance Commission, headed by former bureaucrat N.K. Singh, was in Mumbai for the past three days to hold consultations with government officials, politicians, representatives of trade and industry and so on for the planning period of 2020 to 2025.

Speaking to reporters Wednesday at the end of the commission’s three days in Mumbai, Singh said, “We do regard Mumbai as having a very special place in attracting foreign investment and being an engine of growth for the entire country. The suggestions on Mumbai will definitely be considered by the commission and reflected in its recommendations.” 

Need Rs 2 lakh crore investment: Govt

The mega-projects planned for Mumbai need an investment of over Rs 2 lakh crore, the state government has said. It has cited several ambitious infrastructure projects, planned to cater to Mumbai’s burgeoning transportation requirements, in seeking the central government support under the 15th Finance Commission.

The state has planned 12 metro rail lines to create linkages throughout the Mumbai Metropolitan Region. Of these, three are already under construction, while work on two more is scheduled to begin next month.

The metro lines, which are expected to be completed in the next few years, are estimated to altogether cost about Rs 1 lakh crore, the government has said in the memorandum.

The state is also implementing the Mumbai Urban Transportation Project, in partnership with the Indian Railways, where 50 per cent of the total project cost is being funded from the state’s coffers.

The first phase that cost Rs 8,000 crore has already been completed; the second phase is underway and is expected to cost around Rs 8,200 crore. The government is in the process of seeking approvals for a third phase estimated to cost Rs 55,000 crore.

Other projects cited include the 22-km Sewri-Nhava Sheva Mumbai Trans Harbour Link, touted to be the longest sea link in the country. The project is expected to cost Rs 17,850 crore; it will bring the mainland closer to the island city of Mumbai.

The government has also added in its memorandum the coastal freeway connecting South Mumbai to the city’s western suburbs, the Navi Mumbai International Airport and the 706-km Mumbai-Nagpur Expressway, which happens to be Chief Minister Devendra Fadnavis’ pet project.


Also read: Farm hubs plan by Fadnavis along Mumbai-Nagpur corridor hit by land acquisition problems


The state government told the finance commission that so far it has planned all these projects on its own and with funding from external agencies such as the World Bank, Japan International Cooperation Agency and the Asian Development Bank.

“For the Metro projects itself we have deployed a capital of about Rs 1 lakh crore and with all the other projects, the estimated investment is likely to go up to about Rs 2.5 lakh crore,” U.P.S. Madan, additional chief secretary, finance department, said.

“The commission will decide for a planning period of five years, so we have asked for Rs 50,000 crore with a rationale of Rs 10,000 crore for every year.”

Demand largest for Mumbai

The Maharashtra government has consistently been making demands before finance commissions for a special grant to support infrastructure development in Mumbai. None of the earlier demands have, however, been considered.

The government had sought Rs 6,000 crore under the 12th Finance Commission, comparing it to other port cities of the world such as Singapore and Shanghai.

Under the 13th Finance Commission, the government reiterated its demands and placed a proposal of Rs 16,000 crore for the city’s infrastructure development.


Also read: Mumbai moves to get past its creaky, colonial local train network with new metro lines


Before the 14th Finance Commission too, the state government had pointed out that the city would need an investment of Rs 2 lakh crore to implement various projects suggested under a Comprehensive Transportation Study that has chalked out plans for a 435-kilometre Metro rail network. At that time, the government asked for a special grant of Rs 12,500 crore.

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1 COMMENT

  1. It would be wonderful if the Finance Commission responds positively to the state’s request. However, ILFS is the latest reminder, the NPA problem of the PSBs being an earlier, much larger story, that infrastructure is a devilishly complex business as far as economic viability and assured cash flows to service debt are concerned. Loans from foreign sources like JICA carry foreign exchange risk, which has been especially pronounced this year. Private investors coming in through some variant of BOT – ADAG being a good example – have struggled to break even; in some cases they have abandoned projects. MMRDA funded its initial forays into infrastructure through sale of commercial,plots in the Bandra Kurla Complex but that option is now more or less exhausted. Maharashtra’s public debt has crossed four trillion. It would be a good idea to take a fresh review of where things stand financially.

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