The local municipal corporation would miss a grant of Rs 400 crore for its two prestigious projects under the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) in case it fails to impose house tax on the locals.
On the other hand, if it imposes the house tax, it would generate annual revenue of Rs 22 crore. The issues of the house tax and the revision of rate on commercial tax will come up in the house meeting scheduled for March 30. Both the Congress and BJP councillors say they will strongly oppose the house tax.
The two JNNURM projects are the augmentation of water supply scheme, Phases 7 and 8, for bringing 40 million gallons per day from Kajauli waterworks. The cost of the project is Rs 200 crore. The second project is about replacing the sewerage pipeline network brick sewer by RCC non-pressure-3 pipes. It will cost around Rs 200 crore. Both the projects are lying pending with the ministry of urban development for want of reply to its queries.
The UT administration has directed the municipal corporation to impose house tax, failing which huge central funds available under the JNNURM for several projects would not be available to the MC.
In a letter, the UT administration has said that the house tax should be imposed under Section 19 of the Punjab Municipal Corporation Act, 1976. The letter said the tax would generate more revenue for their departments rather than their depending on the grants sanctioned by the administration. If the MC does not levy the house tax, it would not get the benefit of the huge grants under the JNNURM.
Also, the MC has signed an MoU with the ministry of urban development under the JNNURM that it would levy house tax to raise funds. MC additional commissioner Lalit Siwach said, "Though we are yet to work on the formula as to how the house tax would be calculated, a rough estimate shows that the civic body would earn Rs 22 crore annually. The issue will be taken up at the forthcoming house meeting, then only a final decision would be taken," he said.
The imposition of the house tax is one of the reforms to be implemented for states or union territories that get funds under JNNURM. A number of projects in the city, like automation of tubewells and a project to supply treated tertiary water, are being undertaken with such funds, where JNNURM pays 80% of the cost, and 10% each is contributed by the MC and the administration.
Subhash Chawla, a Congress councillor, said, “We will not allow the house tax to be levied. Chandigarh does not get any share in the taxes collected in the city while the state governments get a fixed share in the taxes collected in their territories. There is no justification in any new taxes in the city.”
BJP councillor Saurabh Joshi said, "The city has sufficient funds. There is no need to levy house tax. Locals have not really benefited from the projects under the JNNURM. Even at places where the pipelines for treated water have been laid, the supply is not sufficient. Till the people are satisfied with the projects, there is no question of more taxes being imposed."