The Brihanmumbai Mumbai Corporation is the richest municipal corporation in India and has a total budget of approximately Rs. 33,441 Crores as unveiled in the budget for the year of 2020-21. When they unveiled their budget for the year, they stated that the tax structure will mostly remain unchanged. However, they suggested a 5% increase in various areas including issuing of licenses, birth certificates etc. Now the municipal corporation is planning to tax the garbage to boost their revenue. The reason this decision has been taken is that in the previous year the real estate earnings had hit a low and caused much harm and loss to the earnings of the corporation. Therefore they wish to include the tax on garbage collection as well.
Another reason for such an introduction can be India's economic slowdown which leads to lesser funds remaining for the states in turn lesser for each city. This can be a very smart move because it will help in regaining equilibrium that has been long lost. According to a report given by Bloomberg, the municipal corporation has stated that they have lost approximately one-third of their earnings due to the implementation of Goods and Services Tax (GST). Even when the central government promised to make up for the losses that have been incurred by the states due to such implementation, they were not able to fulfil them due to India's slowing economy. Another reason is that the corporation is intending to increase their current spending by at least 9%. This increase will help the corporation to install better floodwater drainage systems because Mumbai is known to get flooded during the monsoon season.
Is it a smart idea? It is a smart idea because Mumbai is known to have the largest spending. A large city like Mumbai does require a higher budget as compared to other cities. Can this move be implemented in other cities? This answer will depend upon the population and living standards of each city. This would also depend upon the previous earnings of the municipal corporation of each city and what economic and other targets they have for the upcoming years.