Civic split raises red flags over fiscal strain

Hyderabad: Even as Hyderabad's civic administration has been trifurcated into the Greater Hyderabad Municipal Corporation (GHMC), Cyberabad Municipal Corporation (CMC) and Malkajgiri Municipal Corporation (MMC), serious concerns are emerging over the financial sustainability of the newly formed bodies.Of the three, MMC appears the most financially vulnerable. Revenue generation in its jurisdiction remains significantly lower than in GHMC and CMC. Property tax, which contributes nearly 70% of a corporation's core income, stood at about Rs 430 crore in MMC between April 1 and Feb 12 this financial year. In comparison, GHMC collected Rs 749 crore and CMC Rs 813 crore during the same period.
A major reason is MMC's composition. Large parts of the corporation fall in semi-urban and recently merged areas such as Ghatkesar, Keesara, Pedda Amberpet, Jawahar Nagar and Pocharam, along with several former gram panchayats that lack a strong commercial or high-value residential tax base. At the same time, these areas are still catching up on basic urban infrastructure like internal roads, underground drainage, drinking water pipelines, stormwater drains and street lighting, all of which demand heavy investment.Speaking to TOI, MMC commissioner T Vinay Kumar Reddy said the corporation would depend on both internal reforms and state support. "Apart from receiving our share from the erstwhile GHMC's Rs 11,400 crore budget, we will seek additional support from the state govt whenever required to strengthen infrastructure and civic amenities," he said.He added that improving revenue mobilisation is a key focus. "We are working to identify unassessed and under-assessed properties to enhance property tax collections. We also see strong potential in advertisement revenue, especially along stretches like Uppal and Ghatkesar on the national highway. Efforts will be made to improve collections from building permissions, rentals, mutation fees and trade licences," he said.Urban planners note that the long-term success of the trifurcation will depend on stronger revenue reforms, steady state grants, efficient tax administration and timely infrastructure execution, particularly in peripheral zones.GHMC too needs pushThe restructured GHMC is not entirely comfortable either. With the high-revenue IT corridor and key commercial hubs now falling under CMC, the parent corporation is set to lose a sizeable portion of its tax base.Meanwhile, outer areas such as Adibatla, Jalpally and Badangpet, which remain under GHMC, require substantial capital investment in roads, drainage and other urban services. In the current budget, around Rs 2,000 crore has been allocated for development works in merged municipalities under the respective corporations.In contrast, CMC anchored by revenue-rich zones such as Serilingampally and Kukatpally is expected to remain financially stronger due to its concentration of IT, commercial and high-rise residential developments. GHMC and MMC, however, could face tighter fiscal management challenges in the short to medium term."The state govt must adopt a calibrated growth strategy to ensure balanced urban development. Creating at least two central business districts within MMC limits and promoting growth corridors around Shamshabad and Adibatla under GHMC could help expand the revenue base," said a senior urban planner.Encouraging real estate growth in MMC through targeted incentives, improved infrastructure and policy support could gradually strengthen its finances, the planner added. Without sustained fiscal backing and strategic urban planning, experts warn, the disparity among the three corporations may widen over time.