Chandigarh braces for taxing times in 2020

MC House gives nod to hike in water tariff and property tax; mayor justifies move citing fiscal crunch
Councillors discussing an agenda during the General House meeting at the municipal corporation office in Sector 17, Chandigarh. on Monday.(Gurminder Singh/HT)
Councillors discussing an agenda during the General House meeting at the municipal corporation office in Sector 17, Chandigarh. on Monday.(Gurminder Singh/HT)
Published on Dec 31, 2019 12:50 AM IST
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Chandigarh: In a major jolt to city residents ahead of New Year, the Chandigarh municipal corporation’s General House on Monday approved the hike in both water tariff and property tax.

While the overall hike in property tax will be 20%, the hike is more substantial and steep in case of water. The city’s 1.8 lakh consumers will end up paying more than double the existing charges once the new rates become applicable.

“The new tariff (see box) will be implemented once notified by the UT administration. It may take two to three months,” said MC commissioner KK Yadav.

Water charges were last revised in 2011, while property tax on commercial properties was last revised in 2018. As far as property tax in residential category is concerned, it has not been revised since being introduced in 2015.

Cong stages walkout

The decision led to commotion in the House, as the ruling Bharatiya Janata Party and opposition Congress councillors confronted each other soon after the hike was approved.

While mayor Rajesh Kalia, who chaired his last meeting before the new mayor takes over next month, justified the move while citing the MC’s poor fiscal situation, the Congress staged a walkout in protest.

Leader of opposition Devinder Babla said the steep hike in water and property tax will put a huge burden on people. “The BJP has burdened the residents by imposing one tax after another ever since they came into power in 2016. People will teach them a lesson in the next elections,” he said.

However, the mayor asked the Congress not to politicise the matter. He said it was due to the regressive policies of the Congress in its 15-year rule in the MC House that the civic body plunged into a fiscal crisis.

“It was their fault not to periodically revise user charges of different services, putting entire burden on the BJP,” said Kali. He said whatever additional revenue the MC generates through hiked charges will be used to improve water supply and distribution infrastructure. “The city will be getting better services now,” he said.

136-cr additional revenue

The MC commissioner said that with the hike, the MC will earn an additional revenue of 136 crore — 130 crore from water tariff and 6 crore from property tax.

He said this will help the MC bridge the existing losses, especially in water supply.

“Our annual recurring expenditure in supplying water is more than 160 crore, whereas the annual collection is just 78 crore. Once the new water tariff is implemented, we will be earning close to 208 crore from supply,” said Yadav.

He said the additional revenue will be used to strengthen water supply infrastructure and give better civic facilities to residents.

Resident bodies cry foul

However, resident welfare associations are not happy with the hike.

Hitesh Puri, president, Chandigarh Residents Associations’ Welfare Federation, said it was not justified to double the water tariff, as it would put a huge burden on people. “It is a unilateral decision, as they did not consult the general public. If they had to increase rates, the hike should have been moderate,” he said.

Vinod Vashisht, convener, City Forum of Residents Welfare Organisations, said RWAs will protest the decisions, as the “new charges are too steep”.

Higher charges for commercial activities in houses

The MC House has also approved the proposal to charge commercial rates for water use from residents doing commercial activities in their houses.

The move affects doctors, architects, dentists, lawyers and other professionals who have an office at home and paying guest accommodations as well.

According to the decision, in residential buildings or any part thereof being used for professional purpose, the MC will charge 25 per kilolitre if the covered area under commercial use is above 25% or 50 square metre. The consumers will have to install a separate meter for commercial use. In villages, the MC will charge a flat rate of 750 per household per month for any kind of commercial activity.


    Vivek Gupta is a senior correspondent at Chandigarh. He covers Panchkula, besides writing on medical education.

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