Urban News

The proposal was, however, immediately shot down by the BJP, which controls the MCD. “As the chairman of the Standing Committee, I reject the proposal to increase the house tax,” said Standing Committee chairman Y S Chandolia. Rejection also came from the Congress members, with leader of Opposition in MCD J K Sharma claiming that the move will only result in an extra burden on “honest” taxpayers.

The MCD has divided its properties in eight categories — A, B, C, D, E, F, G and H. Under the new proposal, A and B category that use to pay 12 per cent tax will have to pay 17 per cent; categories C, D and E that pay 11 per cent tax will have to pay 16 per cent and categories E, F and G that pay 7 per cent will have to pay 12 per cent taxes.

“MCD has a huge debt of Rs 2,867 crore to pay to the Delhi government. Also it has to generate more income for itself. Hence, the proposal has been drafted,” said Commissioner K S Mehra.

He added Rs 570 crore of extra revenue can be generated if taxes are increased, as proposed by the Municipal Valuation Committee (MVC). Mehra said the MCD has received Rs 970 crore as property tax this year and the target for tax collection in the next fiscal is Rs 1,550 crore. The budget proposals were presented at a special meeting of the MCD Standing Committee. The MCD budget for 2010-11 is Rs 6,346 crore. 

Mehra had proposed a five-per cent tax increase during last year’s budget as well, but the Standing Committee revised the proposal and only one to two per cent raise was implemented.

Talking to the reporters later, Chandolia said low property tax is not the reason for MCD’s empty coffers. He, instead, called for better tax collection methods. “There are 30 lakh properties under MCD that are required to pay taxes, but only 9 lakh property owners pay up. There are 4,816 properties, which have already been identified and are liable to pay Rs 5 lakh in tax per year. We can get Rs 712 crore if these properties are targeted,” he said.

Mehra, meanwhile, told reporters that the MCD is serious about getting more properties under its tax net. He added that the MCD is intensifying its efforts to widen the tax base and wants the Standing Committee to accept MVC’s recommendations, which had suggested bringing more properties under Category A.

About other revenue earning measures, Mehra said the MCD has nearly finalised a new outdoor advertisement policy. It has also identified 126 new sites for unipoles and 325 new sites for wall or building wraps for ads.

The Commissioner also said the MCD has earmarked Rs 141 crore for rural development projects, initiated measures for e-governance and paperless administration and is setting up a data centre at its Civic Centre building for creating software.