Rental of shops revised after nine years likely to fetch an additional Rs. 14 crore
In all likelihood, the Coimbatore Corporation will exceed the budget estimates this year and increase its surplus. According to the Corporation Commissioner T.K. Ponnusamy, the increase in surplus is on account of better inflow of revenue under the ‘non-tax’ category.
The civic body classifies its revenue under two broad heads – tax revenue and non-tax revenue. The tax revenue includes property tax, water charges, etc. The non-tax revenue includes rent and income from annual lease items such as public convenience facilities, bus stands and parking lots.
The Corporation gets rents from the 3,000-odd shops it has across the city. It fixes the rents for three years and renews them twice with a 15 per cent increment. And at the end of the ninth year, the civic body revises the rents to bring it on a par with the market rate.
In the past, Mr. Ponnusamy says, the civic body had not revised the rent for those shops whose rents were fixed nine years ago. It decided to do so and compiled a list of such shops. With the approval of the Council, the civic body revised the rents based on the Public Works Department’s recommendation.
This resulted in rents going up by more than 150 per cent in many cases.
The net result was that the Corporation’s income grew from Rs. 4.54 crore to Rs. 10.50 crore.
Deputy Commissioner S. Sivarasu says that the civic body has revised the rent for 2,300 shops and plans to do the same for the remaining shops as and when the nine-year-period expires. This should take the non-tax revenue under the ‘rents’ head to around Rs. 14 crore.
To further boost its revenue, the Corporation has also planned to construct new shopping complexes. The Corporation recently mooted proposals for the same and the Council accorded its approval. As per the plan, the Corporation will construct a shopping complex on Krishnasamy Road (Ward 25) and near the Masakalipalayam Main Road (Ward 57).
The officials say that the civic body will go in for more such shopping complexes to boost revenue.
The impact of the increase in revenue can be seen on a variety of fronts. Mr. Sivarasu says that one of the criteria the State Government considers while sanctioning new posts and filling up vacancies is that the salary expenditure should not exceed 49 per cent of the total expenditure.
With the increase in revenue, the Corporation will be able to take in more staff.
The civic body has already sent a list of vacancies and posts to be created to the Government.
Another, and, of course, obvious impact, will be that the Corporation will be able to take up more development works, he adds.