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The Pune Municipal Corporation (PMC) has unveiled a INR 12,618.09 crore budget for 2025-26, marking a INR 1,017 crore increase from the previous year. For the first time, revenue from building permissions (INR 2,899 crore) is projected to surpass property tax (INR 2,847 crore), driven by redevelopment projects and high-rise FSI expansions. Key allocations include INR 1,500 crore each for roads, water supply, sewage treatment, and merged areas. PMC's partnership with PMRDA will add INR 600 crore to revenues, while intelligent work management systems will expedite approvals. Property tax uncertainties in merged areas remain, but PMC is exploring new revenue sources to sustain growth.
The Pune Municipal Corporation (PMC) has unveiled its civic budget for 2025-26, setting a target of INR 12,618.09 crore, marking an increase of INR 1,017 crore from the previous year. The major revenue contributors are building permissions and property tax, with a particular focus on expanding revenue from building permissions. As redevelopment projects in older city areas, new developments, and a share of revenue from PMRDA construction approvals gather pace, PMC anticipates a surge in revenue from building permits. Advertisement
For the first time, PMC expects to generate more income from building permits than from the traditionally dominant source of property tax. The budget sets a target of INR 2,899 crore from building permissions, compared to INR 2,847 crore from property tax collection. This shift reflects a growing demand for high-quality commercial and residential properties in the city. The expansion of the Transit-Oriented Zone (TOD) and the development of high-rise buildings with a Floor Space Index (FSI) of 4 are expected to contribute significantly to this growth.
In addition to the focus on building permissions, PMC has also earmarked substantial funds for roads, water supply, sewage treatment, and the development of merged areas, with each of these receiving at least INR 1,500 crore. These allocations reflect an effort to modernize and upgrade the city's infrastructure in preparation for future growth. The recent developments are also seen as an indication of PMC's preparation for the upcoming civic elections later this year.
One of the significant factors contributing to the expected increase in revenue from building permissions is the PMC's collaboration with the Pune Metropolitan Region Development Authority (PMRDA). PMC expects to receive around INR 600 crore from PMRDA as part of its share of building permissions, as the PMRDA approves construction in the merged areas where PMC provides civic amenities. This partnership highlights the importance of seamless coordination between local governance bodies to support urban development.
Additionally, PMC has introduced an intelligent work management system to expedite the process of granting building permissions. The system is designed to streamline operations, ensuring quicker approval times for developers and contributing to a smoother urban development process.
The PMC also plans to ramp up its efforts to recover property tax and seek financial aid from both the state and central governments, as these remain crucial sources of income. The administration is also exploring new avenues for revenue generation, such as collecting taxes from cellphone towers and bringing new properties under the tax net.
A grey area in the budget is the collection of property tax from merged areas, which remains uncertain following a directive from the state government. The directive halted property tax collection from these areas, suggesting that residents should only be levied two times the tax previously charged by local gram panchayats. If PMC is allowed to levy property taxes at normal rates, it expects to collect INR 200 crore from these areas.
PMC has made substantial progress in property tax collection, earning INR 6,500 crore by January 2025, with expectations of reaching INR 8,500 crore by the end of March. The building permission department has generated INR 1,900 crore in fees and charges so far, with an additional INR 500 to INR 600 crore expected by March-end.
PMC also received INR 300 crore from PMRDA as its share of building permissions for the fiscal year.The budget also outlines revenue expectations from various other sources, including INR 1,633 crore from government funding, INR 2,700 crore via Goods and Services Tax (GST), and INR 545 crore from Local Body Tax (LBT). Despite the anticipated scrapping of the LBT department due to state government directives, the PMC will continue its efforts to recover dues from defaulters.
Finally, the budget incorporates suggestions and objections from the public and political leaders, with elected representatives and former corporators presenting proposals worth INR 30,000 crore for the city's growth and infrastructure development. This extensive community engagement reflects the growing importance of public participation in shaping Pune's future.
As Pune moves forward, this budget lays the foundation for its growth, addressing both immediate infrastructure needs and long-term urban development goals. The PMC's proactive approach, focusing on modernizing urban infrastructure and streamlining revenue collection, is expected to drive the city toward greater economic prosperity.
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