Thanks to an order issued recently, the cash-strapped GHMC has to share Rs 125 crore to Rs 140 crore annually with the water board. It has to remit 25 percent of the property tax collected to the HMWSSB.

In order to facilitate smooth transfer of funds, GHMC Commsisioner MT Krishna Babu, who is also the MD of HMWS&SB, has issued a circular directing all the tax-collection officials to deposit the GHMC property tax collections only in GHMC-Property Tax Escrow account opened recently.

The State Government in July this year issued a GO ordering levy of water tax at the rate of 7.5 percent by proportionately reducing other property tax components so as to keep the overall rate of property tax at 17 percent, 19 percent, 22 percent and 30 percent of the Annual Rental Value (ARV) slabs of Rs 601-1,200, Rs 1,201-2,400, Rs 2,401-3,600 and Rs 3,601 and above respectively. Accordingly, the necessary reallocation of components of property tax has been done.

A GHMC-Property Tax Escrow Account has been opened in the State Bank of Hyderabad, Municipal Complex, Tank Bund Branch where all the tax collections should be deposited. Standing instructions to the bank to set apart 21.25 percent of the collections in a calendar month, after deducting collection charges, are being issued. The remaining amount will be transferred to the GHMC-General Fund.

The Water Board has been facing a regular monitory deficit due to insufficient funds. In view of huge power charges and interest and principle payments on borrowings, the Board is being constrained to divert capital receipts from the Government of India and the State Government, seriously affecting the progress of capital works.

In order to overcome this situation, the HMWSSB has sought levy of water tax as a component of property tax and transfer of the collections to it.