A key panel of the MCD on Thursday rejected a proposal for five per cent across-the-board hike in house tax and made increased allocation for roads, sanitation services and streetlights in its budget for next fiscal.

Finalising the budget estimates for 2011-12 at a special meeting of the MCD Standing Committee, its chairman Yogender Chandolia formally rejected the tax hike proposed by Municipal Commissioner K S Mehra in December last year.

The panel recommended an increase of Rs 579.20 crore over the Rs 6,364.43 crore expenditure for 2011-12 proposed by the Commissioner, taking the total to Rs 6,943.63 crore.

The ruling BJP had made it clear on the day of presentation of budget itself that the hike will not get a nod and the opposition Congress also spoke in strong voice against “burdening” the citizens further.

Both the parties favour bringing more properties under tax net to increase revenue for cash-strapped MCD.

“There are 4,816 properties which have already been identified and are liable to pay Rs five lakh in tax per year. We can get Rs 712 crore if these properties are targeted,” Mr. Chandolia said.

The schedule of taxes will remain the same as 2010-11 financial year. However, the MCD has already announced that it will not collect taxes from unauthorised colonies and rural and urban villages and has approved a 17 to 28 per cent in toll tax in various categories.

Mr. Chandolia also said that to cope with demands from councillors having large wards, the Mayor’s and Standing Committee Chairman’s discretionary funds will be increased from Rs five crore to Rs 10 crore. The councillors’ local area development fund has been increased to Rs 2.5 crore of which Rs 50 lakh each has been released.

The Standing Committee Chairman also announced increased allocation under various heads for each ward.

Rs 50 lakh will be given for improvement of roads in each ward, incurring an expenditure of Rs 136 crore. The allocation under other heads are - sanitation services (Rs 25 lakh each - incurring Rs 68 crore), maintenance works (Rs 75 lakh each - incurring Rs 204 crore), street-lighting in wards (Rs five lakh each - incurring Rs 1.36 crore) besides Rs 50 crore for civic amenities in unauthorised colonies.

Presenting the Revised Budget Estimates for 2010-2011 and the Budget Estimates for 2011-2012 on December 9, Mr. Mehra had said the money will be mainly spent on green initiatives, roads, parking projects, education and hospital improvement.

Noting that the MCD is under a debt of Rs 2,867 crore, Mr. Mehra had said there is a dire need for improving financial management and increasing revenue.

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