Chandigarh: MC chief puts foot down, says property tax hike ‘need of hour’
As Chandigarh MC House rejects officials’ plan for four-fold hike in property tax, MC commissioner says he will send a dissent note to the UT administration for final call
A day after mayor Harpreet Kaur Babla rejected the proposal, the Chandigarh municipal corporation’s (MC) plan for a four-fold hike in property tax was still tabled during the House meeting on Friday.
Once again, the plan, introduced as a “table agenda” during the meeting, bypassing mayor’s disapproval, was vociferously shot down by all councillors, cutting across party lines.
But standing firm behind the proposed hike, MC commissioner Amit Kumar added a strong dissent note, arguing that it was the “need of the hour” to overcome civic body’s pressing financial distress.
“MC is struggling to even pay staff salaries. Though the proposal was rejected, I will add a dissent note highlighting the necessity of this tax hike,” he said.
The commissioner also confirmed that the detailed proposal, along with the councillors’ rejection and his dissent note, will be forwarded to the UT administration for a final decision.
Notably, MC’s move to increase the property tax aligns with UT administrator Gulab Chand Kataria’s directions to optimise property tax receipts to address the corporation’s severe financial woes.
Property tax never revised: MC
Plagued by a debilitating fiscal crisis, which has halted development works and delayed staff salaries, and no special assistance from the UT administration, MC had sought to raise tax across all categories by four times, which could potentially boost its annual revenue by around ₹200 crore.
Additionally, MC was also proposing a 1% annual hike on commercial properties (until reaching the limit of 15%) and 5% annual hike on residential properties.
In their agenda, MC officials specified, “Property tax at the rate of 3% on annual rateable value was introduced on commercial, industrial and institutional land and buildings in 2004. Subsequently, property tax on residential land and buildings was imposed in 2015. Presently, there are approximately 31,007 commercial properties, generating an annual demand of ₹36 crore and around 1,08,500 residential properties contribute annual demand of ₹9 crore. The property tax percentage has not been revised to date.”
“As per the first chief secretaries conference, property tax should be 1% of GDP according to which Chandigarh should generate over ₹500 crore as revenue from tax. At present annual demand is ₹45 crore. The MC Act allows property tax up to 15%. A comparative analysis with the Mohali MC revealed that despite a smaller population of 2.34 lakh, the annual property tax demand stands at ₹40 crore,” the agenda detailed.
Civic body drowning in financial troubles
After a challenging 2024-25 fiscal with fast-depleting coffers, 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.
Finance panel elected unanimously
After AAP councillor Yogesh Dhingra withdrew his nomination, the five-member Finance and Contract Committee (F&CC) was elected unanimously during the House meeting. The F&CC is the civic body’s second-most powerful panel, holding the authority to approve projects worth ₹50 lakh. On Monday, apart from two members each from the BJP and the AAP, and one from the Congress, AAP councillor Poonam had also filed an independent nomination, defying party directives. With six candidates entering the fray for the five-member panel, an election was necessitated, unlike last many years. But with Dhingra leaving the contest, the remaining five candidates — Gurpreet Gabi (Congress), Saurabh Joshi and Jasmanpreet Singh (BJP), and Poonam and Suman Devi (AAP) — were elected unanimously.
Mayor, commissioner meet Kataria for funds
Following the meeting, the mayor and MC commissioner met UT administrator Gulab Chand Kataria to seek a special grant for the cash-strapped MC. Mayor Harpreet Kaur Babla, who termed the meeting “very productive”, had sought an urgent additional grant of ₹170 crore to meet MC’s liabilities, including salaries. Soon after Babla’s victory in the recent mayoral elections, city BJP president Jatinder Malhotra had announced that the Centre had approved a special grant of ₹92 crore, but MC has yet to receive these funds.
Engage in debates but maintain decorum: Tewari
Chandigarh MP Manish Tewari, who was present during the House meeting for the F&CC elections, urged councillors to present their arguments effectively, engage in heated debates if necessary, but always maintain decorum. With MC elections slated in 2026, Tewari said meaningful discussions were appreciated, while conflicts and disruptions sent a negative message.
New mayor brings new rules
At the beginning of the session, mayor Harpreet Kaur Babla addressed the House, stressing the need for councillors’ collective efforts for the city’s development. She also introduced new rules for House meetings, stating that every session will begin with a zero hour, where each councillor will get up to five minutes to raise issues concerning their wards. She stressed that others should not interrupt during a councillor’s speech, and seek the mayor’s permission before addressing the House.