Pune Municipal Corporation (PMC) announced its budget for the fiscal year 2025-26, which has seen an increase of Rs 1,017 crore, reaching a total of Rs 12,618.09 crore. The budget’s growth is primarily fueled by rising revenues from building permits and property tax. Significant allocations have been made for infrastructure projects, such as roads and water supply, reflecting the city’s ongoing development needs.
- The budget has increased to Rs 12,618.09 crore from Rs 11,601 crore in 2024-25.
- Pune expects to generate more revenue from building permissions than from property tax for the first time.
Pune’s Growing Budget: Key Drivers
The Pune Municipal Corporation’s budget for the fiscal year 2025-26 marks a significant increase of Rs 1,017 crore, primarily driven by enhanced revenue from building permits and property tax. PMC’s administrator, Rajendra Bhosale, presented the budget on March 9, 2025, highlighting a total budget of Rs 12,618.09 crore, up from Rs 11,601 crore in the previous fiscal year. The budget aims to address the city’s infrastructural demands through hefty allocations. Each essential service area, including roads, water supply, and sewage treatment, has been allocated a minimum of Rs 1,500 crore.
This increase in the budget is particularly notable as it reflects a strategic shift in PMC’s revenue generation. For the first time, the corporation anticipates that income from building permissions will surpass the traditional revenue source of property tax. The budget sets an ambitious target of Rs 2,899 crore from building permissions, slightly above the Rs 2,847 crore projected from property tax collection for 2025-26. This shift may signal a broader trend in urban governance as cities increasingly prioritize development to meet growing population demands.
Strategic Plans and Future Revenue Streams
The PMC has laid out several strategic initiatives to bolster its revenue streams further. Bhosale noted that discussions with the Pune Metropolitan Region Development Authority (PMRDA) are ongoing to secure a larger share of building permissions, predicting an additional Rs 600 crore. This growth is expected due to PMRDA’s oversight of construction approvals in merged areas, where PMC is responsible for civic amenities. Additionally, the redevelopment of properties in older city zones and new projects is anticipated to contribute significantly to revenue growth.
Moreover, the administration has implemented an intelligent work management system aimed at expediting the building permissions process. By streamlining operations, the PMC seeks to enhance efficiency and responsiveness in meeting the demands of developers and potential investors. Furthermore, the civic body intends to improve property tax recovery rates, especially from cellphone towers and previously unassessed properties. These efforts are expected to generate additional revenue to support the city’s infrastructure and services.
Challenges Ahead: Property Tax from Merged Areas
Despite the optimistic outlook, the PMC faces challenges regarding property tax collection from merged areas. A directive from the state government last year has led to uncertainty about tax collection from these areas, complicating revenue forecasts. The state has suggested limiting property tax to double the rates charged by local gram panchayats, which could result in a loss of potential revenue. If normalized tax rates were applied, the PMC could potentially recover Rs 200 crore from these merged regions.
Additional Commissioner Prithviraj B P confirmed that tax bills will not be sent to property owners in merged areas until further clarification is received from the state. Meanwhile, PMC continues to pursue recovery of other taxes and anticipates government funding of Rs 1,633 crore, Rs 2,700 crore via GST, and Rs 545 crore from Local Body Tax (LBT). While the LBT department is expected to be dissolved under state directives, the civic administration remains committed to following up on defaulters to safeguard its revenue.
