Chandigarh mayor rejects MC’s plan for four-fold hike in property tax
Plagued by fiscal crisis, Chandigarh MC had planned to table agenda in House meeting on February 7 to help raise an additional ₹200 crore annually
The cash-strapped Chandigarh municipal corporation’s (MC) plan to impose a fourfold hike in property tax rates, by tabling an agenda in the MC House meeting on Friday, has been rejected by newly elected mayor Harpreet Kaur Babla.
MC has been levying property tax on government and commercial buildings since November 22, 2004, at 3% of the property’s rateable value, despite the MC Act allowing up to 15%. Residential properties are charged property tax at a fixed slab-wise rate.
There are around 30,000 commercial units (non-residential properties) in Chandigarh, including government buildings, apart from 1,08,372 residential properties.
Thus, mired by a severe financial crisis, MC had sought to raise tax across all categories by four times. The proposed hike was seen as essential to shore up finances, potentially boosting MC’s annual revenue by around ₹200 crore.
After drafting the detailed agenda, MC officials planned to table it in the House meeting on Friday, for approval from the MC House. However, Babla rejected the proposal, citing the burden it would place on residents.
“Me and BJP are exploring other avenues, including seeking additional funds from the Centre and the UT administration, rather than increasing taxes on the people. The agenda will not be discussed or tabled in the meeting on Friday,” said the mayor.
Neighbouring cities charge higher tax: MC
MC officials argue that the proposal is crucial for generating much-needed revenue. “Neighbouring cities like Mohali and Panchkula charge higher property taxes as compared to Chandigarh. Additionally, Punjab governor and UT administrator Gulab Chand Kataria has repeatedly asked MC to enhance its revenue by optimising property tax receipts, collecting arrears, revising property-tax bylaws and rationalising manpower. The hike could boost MC’s annual revenue by around ₹200 crore,” said MC officials.
It is worth mentioning that after municipal commissioner’s approval, each agenda is signed and approved by the mayor before being table in the House.
Tough road ahead for MC
After a challenging 2024-25 fiscal that brought all development works to a grinding halt and caused multiple salary delays, MC is staring at another tough year as the Chandigarh administration has allocated a grant-in-aid of just ₹625 crore for 2024-25, far short of its demand of ₹1,704 crore.
The funds will once again be insufficient to cover MC’s committed liabilities of around ₹900 crore, which include staff salaries, pensions and water/electricity bills—expenditures that cannot be ignored. Amid the mounting financial challenges, MC has been working on increasing its revenue streams to meet the growing shortfall.
F&CC election today
The MC House meeting on Friday will also see election of the new finance and contract committee, the civic body’s second-most powerful panel, holding the authority to approve projects worth ₹50 lakh.