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Taxing times: Chandigarh municipal corporation plans to pass burden on residents

MC proposes new taxes, hike on existing ones to generate Rs 300 crore additional funds annually

punjab Updated: Jun 21, 2018 11:02 IST
Hillary Victor
Hillary Victor
Hindustan Times, Chandigarh
Chandigarh municipal corporation,Chandigarh,MC financial crisis
The civic body has nearly exhausted its fixed deposits that stood at Rs 400 crore in 2013.(HT File)

Facing the worst financial crisis since its inception in 1996, the Chandigarh municipal corporation (MC) plans to hike existing taxes and imposing new ones.

The draft policy, which aims to strengthen the MC’s fiscal health, is expected to generate additional revenue of Rs 300 crore annually. It will be tabled before the House for approval during its meeting later this month.

The civic body has nearly exhausted its fixed deposits that stood at Rs 400 crore in 2013. Moreover, there has been no increase in its share in the UT revenue, which has remained constant at Rs 269 crore in the past two years. In fact, the civic body is not getting more than 10% share in the UT’s resources against 30% mandated under the finance commission’s latest recommendations.

Turning down its plea for special grant, the UT has told the civic body to focus on internal resources for revenue generation.

The proposed taxes and hikes are in line with it.

What’s new

The new taxes mentioned in the draft policy include green tax on commercial vehicles, cow cess for managing stray cattle, entertainment tax, fire fee and charges for maintaining greenery.

The draft policy also proposes hike in property tax, advertisement fee, sanitation fee and water supply and sewerage charges (see box).

The civic body plans to charge residents for fire services by introducing a cess of Rs 50 per household. It will help meet Rs 15-crore annual expenditure.

Also around Rs 50 crore spent by the horticulture department for maintaining green belts can be partially recovered through Rs100 charges per household in northern sectors, the policy states.

Making a pitch for entertainment tax, it has been stated that it has a good potential and can be levied on cable television, multiplexes, discotheques and celebrity shows. The MC is also working on starting paid parking at around 180 more sites besides proposing 5% hike in advertisement fee.

The hike

The draft policy states that property tax collected in 2016-17 was Rs 20 crore, which went up to Rs 42 crore in 2017-18. It is has been proposed to increase the tax on a regular basis and link it with collector rates to make it more buoyant.

The MC stated that water charges are very low and have not been revised since 2011. In 2017-18, the recovery was just Rs 78 crore against the expenditure of Rs 160 crore.

It has been proposed to hike water tariff by 25% in domestic supply and 45% in commercial and industrial supply, which will generate Rs 100 crore additional funds annually.

Also, at present it is collected by private contractors, but if MC handles it, Rs 50 crore additional revenue can be generated, the draft policy stated.

First Published: Jun 21, 2018 10:56 IST