Delhiites may have to loosen their purse strings further as the cash strapped city government plans to levy a 'fire tax' after the Commonwealth Games, in an apparent bid to enhance its dwindling financial resources.
Director of Delhi Fire Services RS Sharma said the government was considering levying the tax as per provisions of the Delhi Fire Services Act 2007, which has been notified recently.
A portion of the fund is likely to be used for enhancing fire safety measures, he said.
Another senior official said the Delhi government targets to collect a sum of over Rs 100 crore per annum through the tax.
The DFS Act says the fire tax could be charged in the form of a surcharge on buildings and other premises by local authorities, and the amount of the tax will have to be decided by the government.
The official said the fire tax is likely to be introduced immediately after the Commonwealth Games.
"It (fire tax) will be part of the house tax. Delhi Government is not going to create a separate provision for it. The MCD will collect the tax," said the official.
The Act says, the tax collection authority can retain one per cent of the total collection in every quarter as collection charges.
Delhi Government has been facing serious fund crunch due to huge spending on projects linked to the Commonwealth Games. It has undertaken projects worth over Rs 10,000 crore to improve infrastructure in the city ahead of the Games.
The city government has already withdrawn subsidy on cooking gas and electricity besides increasing water tariff and bus fare. It has also increased Value Added Tax on a variety of items to augment its financial resources.
The government has faced financial difficulties especially after the Centre substantially curtailed its allocation to Delhi in this year's Union Budget. It was allocated a meagre Rs 50 crore for projects linked to Games against its demand for a special assistance of Rs 2,000 crore.
The economic slowdown had a severe impact on city government's finances in 2009-10 as tax collection had fallen by over Rs 1,300 crore against the targeted amount.