The Times of India             06.01.2014

Nagpur Municipal Corporation starts planning for property, water tax hike

NAGPUR: Citizens are likely to face a hike in property tax and water tariff in the new financial year. The Maharashtra Municipal Corporation (MMC) Act makes it mandatory for civic bodies to plan and complete the process to revise taxes before February 20. Therefore, the civic body has started planning revision in both taxes considering the huge revenue deficit due to lack of improvements in tax collection and recovery system.

A senior NMC official told TOI the process to hike property tax has to be kicked-off in early January itself as it is a lengthy process. "First, the administration will moot the proposal. Then the tax consultative committee will discuss and take a decision before tabling it before the standing committee. Later, the proposal will be tabled before the general body and then come up for implementation. Entire process has to be completed before February 20 according to section 99 of the MMC Act. If approved, the revised tax will come into effect from April 1," the official said.

NMC sources told TOI, the administration is almost ready with the proposal to hike property tax by either launching capital-value system or hike in existing rateable-value system. "Efforts will be taken to implement capital-value system, as already majority of the process has been completed and it is pending for last two years. Capital-value system will double the property tax for residential properties and three times for commercial, but also bring in transparency," the official said.

Chairman of tax consultative committee Girish Deshmukh said decision on capital-value property tax system will be taken only after working on various types of scenarios. "Administration's proposal is in final stage but there would be no hurry," he said.

As far as water tariff is concerned, the water works department is firm on its stand to continue increasing tariff by 5% every year. An official from the department told TOI the civic chief has the powers to hike water tariff by 5% and a proposal will be mooted for the ensuing fiscal.

The water works department has hiked water tariff by 15% over the last three years in this manner. The hike has been continued despite strong opposition from social organizations over the benefits going to the private company operating the water supply system.

However, the proposal to revise property tax or water tariff will result in face-off between the administration and office bearers. The administration seems to have no option but to revise taxes to come out of the severe financial crisis. But the BJP-led ruling alliance will not like to take any chance of inviting public wrath with three-four months left for the general elections.

Ruling party leader Praveen Datke said no hike in property tax will be allowed. "We will not allow any proposal to get through to burden citizens. We have no option in case of water tariff hike since civic chief has the powers. However, the proposal to hike water tariff will still have to be tabled before the water works consultative committee. Everything possible will be done in favour of public," he said.