Honest tax collection could have saved MCDs: SC panel

The monitoring committee made the remark in its latest report submitted to the Supreme Court on March 31.

The Supreme Court-appointed monitoring committee (sealing panel) in its latest report to the apex court has stated that if the municipal corporations in Delhi efficiently collected dues from properties all across the city, they would not have been facing the crippling financial crunch.

The Supreme Court. (HT )

The observation is important since the poor financial health of the three civic bodies -- North, South and East municipal corporations -- was one of the main reasons cited for their unification by the Centre.

The report dated March 31, 2022 cites hundreds of crores in penalties that it had imposed on various commercial spaces for the violation of the provisions of Master Plan 2021. The committee stated that an amount of Rs372.4 crores has been imposed as penalties including conversion charges, regularisation charges, parking charges and registration charges in 542 cases decided so far by the panel.

The report states that an amount to the tune of ₹729.7 crore could have been realized by the agencies if they had taken coercive action in C type tenements like Amar colony, while arguing that stern action against the violators could have made the MCDs financially self sufficient while also acting as a deterrent.

The committee members did not wish to comment on the report. But the report noted, “If these agencies are honest in collection of charges from properties all across the city, the amount realized will be more than sufficient to run the local bodies in an efficient manner without frequently creating ruckus regarding insufficient funds to carry out their laid down duties.”

The three member monitoring committee was set up by the Supreme Court in 2006 to identify unauthorised structures and check misuse of properties in Delhi. The committee, comprising of former advisor of Election Commission K J Rao, former Environment Pollution Control Authority (EPCA) chairman Bhure Lal and Major General Som Jhingon was once again revived in December 2017. In a judgement delivered on 14 August 2020, the Supreme Court bench headed by Justice Arun Mishra ruled that the monitoring committee had the mandate to act only against commercial properties, not residential ones-- which restricted the ambit of the sealing panel. It has largely remained dormant after the 2020 ruling.

To be sure, according to the finance department officials, the three civic bodies had a total deficit of more than ₹16,000 crores, which led to delay in payment of salaries and pensions causing repeated strikes by the staff.

EDMC Mayor Shyam Sunder Aggarwal said that large parts of east Delhi are unplanned developments and actions or penalties cant be imposed on mass scale as the panel argues. “We have to also look at the fact that we cant rob people from their livelihood. We need a balanced approach. We can appeal to people and if all properties start paying taxes honestly, we would have enough funds There are certain wards from where the house tax collection is as low as ₹1.25 lakh, ₹2 lakh, ₹3 lakh. It is because of funds being denied to MCDs that the three corporations are being merged,” he added.

Praveen Khandelwal, who heads confederation of All India Traders said enough commercial space was not developed in the city, and traders were blamed for the failure of planning agencies. “As population of Delhi increased, the number of shops kept on rising. The first MPD came in 1962 and many of its provisions are still not implemented. Blanket statement like charging misuse charges to make MCDs financially self-sufficient does not take into account the failure of authorities,” he added.

Khandelwal said that the agencies were expected to use the parking and conversions charges for development of the market in co-operation of the local traders association.