The primary civic agency of the national capital is under a debt burden of Rs 2,867 crore and appears to be struggling to find ways to increase revenue.
The main source of income for the Municipal Corporation of Delhi (MCD) is the tax collected from property owners in the city, other than minor sources like advertisement revenue, toll tax, fee from car parking and from mobile phone towers.
Noting that there was a dire need for increasing revenue, Municipal Commissioner K. S. Mehra had last week proposed an across-the-board hike of five per cent in the property tax rates in the MCD’s 2011-2012 budget.
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The proposal, however, was rejected by the ruling BJP in MCD which insisted that “even a debate will not be held” on it. The opposition Congress too has said it will oppose any attempt to “further burden the people of Delhi.”
Municipal officials admit that the civic body is cash-strapped and is finding it tough to make payments to project contractors on time. The salaries of employees were also taking a big chunk since the Sixth Pay Panel came into force.
Leaders of the ruling BJP feel that instead of increasing tax, the MCD should focus on widening the tax base.
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“Some 21 lakh properties in the city is outside the ambit of tax. Only nine lakh are paying tax to us. We should try to bring more properties under the tax net,” Chairman of MCD Standing Committee Yogender Chandolia said.
“There are 4,816 properties which have already been identified and are liable to pay Rs. 5 lakh in tax per year. We can get Rs 712 crore if these properties are targeted.”
The Commissioner, however, still hopes that the proposal for tax hike will be accepted. Last time too, he had proposed five per cent increase in tax rates but the Standing Committee revised it and went for only marginal hike.
Mr. Mehra also said the MCD has set a target to bring 8-9 lakh more properties under the tax net.
However, this may take quite a bit of time as MCD plans to collate data from its own survey and that of the Survey of India to identify tax evaders.
“A door-to-door survey is being carried out by the domestic breeding checkers of MCD and we are also getting data on properties from discoms. This data will be collated with data given to us by Survey of India,” Mr. Mehra said.
The revised budget estimates for 2010-11 shows that MCD has brought down the target of property tax collection from Rs. 1550 crore to Rs. 1050 crore. The opposition has raised doubts on whether this is also achievable as the MCD has collected only Rs. 518 crore in tax till November.
The MCD had an outstanding debt of Rs. 2180.70 crore since the beginning of the year and owes Rs. 686.30 crore to contractors under non-plan head.