The property tax revision proposed by the State Government for all urban local bodies has come as a breather for the Coimbatore Corporation, which has been reeling under financial stress for quite sometime.
The corporation saw depletion of its resources about two years ago as its bank deposits almost came to a naught and it put off paying contractors. Towards the second quarter of 2017-18, the outstanding touched nearly ₹250 crore.
The result was that the corporation was unable to pay contractors who had completed their projects, had completed some portions of their projects, or had supplied manpower towards conservancy work. The last time the corporation had paid the contractors that year was sometime in January.
Today, though, the corporation’s position is not worse but it still has outstanding, say sources.
Given its rather precarious financial position, the civic body is looking forward to implementing the hike proposed by the government, which is up to 50% for residential buildings and up to 100% for others (commercial and industrial).
At the end of last fiscal, the corporation had a property tax demand of ₹171.59 crore.
Adding water charges, non-tax items and other charges, the total demand was ₹339.68 crore.
Given the 50% revision in property tax for residential buildings and 100% revision for others, the corporation’s total property tax demand will touch ₹295.77 crore, the sources say and point out that the revision will yield an additional ₹123.97 crore.
This is an increase of over 70 %.
The sources point out that the maximum increase will be from the commercial and industrial assessment categories, where, due to the 100% revision, the total demand will jump from ₹ 63.23 crore to ₹126.47 crore and from ₹12.92 crore to ₹25.84 crore respectively.
The increased demand seen with last year’s collection percentage (95) works out to ₹ 280.98 crore, which will help the corporation not only pay off its debts but also utilise the funds to lay and repair roads, something which it has been unable to take up in full steam because of lack of resources.
But, then the civic body will still have to do without the ₹60 crore that is pending from the Central government.
The sources say that the government gives the money annually, disbursed half yearly, to the corporation under the Central Financial Commission grant. It has withheld the payment since the second half of the last year citing the absence of elected council.
The corporation through the State government is trying to get the money as it will increase its financial strength.
