MC rapped for ignoring city’s revenue generation

  • HT Correspondent, Hindustan Times, Chandigarh
  • Updated: Oct 17, 2014 08:51 IST

Pointing out inefficiency of the Chandigarh municipal corporation (MC) in discharging its responsibilities effectively, the Fourth Delhi Finance Commission in its report for Chandigarh slammed the councillors for playing politics with revenue earning potential from the sources of taxes, duties, tolls and fees enumerated as stated in the Municipal Corporation Act.

In the report, which was submitted to UT administrator Shivraj Patil, the commission stated that the councillors appear to remain indifferent to low tax collection, despite enormous revenue earning potential from its lands and buildings.

It objected to the municipal corporation (MC)’s move to exempt house tax on houses below 125 square yards and those falling under the economically weaker section (EWS) category. It imposed just Rs 1 per square yard as house tax, only for political gains.

The commission also questioned subsidy on water that was causing loss of nearly Rs 60 crore, rather the MC should simultaneously increase the rates.

The report pointed out that it was strange that despite recommendation in the third finance commission report to switch over to double entry accounting system, nothing was done.

The commission also observed that the MC was not aware of the avenues of generating revenues through levying taxes and non-tax charges.

Also, lack of use of modern information technology had severely hampered the revenue potentials of the MC. Besides, there was no separate list of taxes exclusively to be charged by the corporation and was left to the discretion of the administration to decide on its behalf. As a result, there was a mismatch of the available resources vis-à-vis the responsibility assigned to it.

The MC corporation as been asked to coordinate its activities for enabling itself to provide improved infrastructure and services matching the expectation of the public, achieve goals and objective of the city development plan, and manage resources efficiently to be more self-reliant.

The report further stated that the MC had not levied any user charges on different agencies and other cable-based networks used for transmission and distribution of either digital signals or power supply using corporation’s property rights in, on, under and above the community lands.

Form city development fund

The commission recommended the MC to constitute ‘city development and balanced growth fund’ for abating slum settlements. The MC should credit fund equivalent to 28.57% of total receipts of the corporation under the ‘percentage assignment of revenues’ head. The MC should understand that if measures to abate irregular human shelters get delayed, it could encourage more and more people to extend the area under encroachment.

Reforms suggested

For improving and strengthening financial position of the corporation, the commission has called for a need to carry out various reforms such as structural, financial, administrative and urban local body level reforms. It also recommended optional reforms such as revision of bylaws to streamline approval process for construction of buildings, development of sites etc; bylaws for reuse of recycled water and introduction of property title certification system.

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