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Updated: November 6, 2009 18:03 IST

Fund crunch necessitates hike in taxes: Mayor

Staff Reporter
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Mayor Pulusu Janardhana Rao. File Photo: K.R. Deepak
THE HINDU Mayor Pulusu Janardhana Rao. File Photo: K.R. Deepak

The Greater Visakhapantam Municipal Corporation requires more funds to meet its commitment under the Jawaharlal Nehru National Urban Renewal Mission and to take up regular development and maintenance works, which necessitates a hike in various civic taxes, Mayor Pulusu Janardhana Rao says.

At a press conference on Thursday, he said the GVMC was only trying to implement a GO issued by the State Government in 2006 and it was difficult to specify the percentage of hike (for property tax) in view of zoning norms and rental basis.

“It’s for the council to decide,” he said, appealing to people to cooperate. The Mayor’s appeal comes ahead of the proposed hike to be taken up by the corporation general body meeting on Saturday.

The Mayor said for the Rs.1,925 crores worth JNNURM works sanctioned, the corporation’s share was Rs.580 crores. For the mission, in its fifth year of implementation, Rs.505 crores has been released so far (corporation’s share Rs.110 crores). There is a need to improve resources if further grants are to be obtained. The corporation could get a maximum of Rs.14,000 crores, it was projected at one point of time.

Mr. Janardhana Rao said considering the Rs.70 crores already raised by way of issuing bonds and another Rs.200 crores of borrowing for which government’s permission had been sought, for the JNNURM commitment and other regular expenditure, the corporation required Rs.390 crores, including an additional Rs.108 crores a year.

On the reasons for the crunch, he said property tax had been last revised 16 years ago though it had to be raised every year. The non-residential property tax had been raised only by 50 per cent. The tap connection deposit had been reduced from Rs.5,000 and Rs.7,000 (at Gajuwaka) to Rs.2,000. On the other hand, the corporation had to foot an additional Rs.10 crores each for minimum wages to sanitation workers and revised pay for employees.

Pending bills

The Mayor pointed out that in 2008-09 the revenue was Rs.281.27 crores and the expenditure Rs.326 crores. In the first half the current year, revenue was Rs.115.48 crores and expenditure Rs.95.14 crores. But the corporation’s pending bills stood at Rs.50 crores, bills for ongoing works at Rs.35 crores. For works sanctioned by the council and the standing committee it needs a total of Rs.189 crores.

Additional Commissioner (Finance) P. Purnachandra Rao and Financial Advisor Y. Mangapathi Rao were present.

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