Tuesday, Aug 31, 2004
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Advts: Classifieds | Employment | New Delhi
By Lalit K. Jha
NEW DELHI, AUG. 30. The large number of concessions and rebates announced by the Municipal Corporation of Delhi under the newly introduced Unit Area Method scheme for house tax might have been welcomed by the majority of property owners, but the outcome of it all is expected to come as a "major financial shock" to the civic body. There are fears that the MCD might be reduced to bankruptcy unless bailed out by the Delhi Government with soft loans. Despite repeated assertions by the Standing Committee Chairman, Mukesh Goel, and the Chairman of the Hardship and Anomalies Committee, K. Dharmrajan, and its vociferous member, Sanjay Puri, that the "rebates" would not hit revenue collection, those involved with the house tax collection and revenue experts fear the worst. Instead of the record house-tax collection of Rs. 920 crores in the last financial year, house tax officials and revenue experts of the Delhi Government have already informed the official concerned that the civic body would be `lucky' to get Rs. 600-650 crores, that too after tremendous effort. Incidentally, the MCD has for this financial year set a target of Rs. 1,200 crores as revenue from house tax, which is its only major source of revenue. It is understood that the Delhi Chief Minister, Sheila Dikshit, has been briefed by senior MCD officials about the `imminent financial' fallout of the number of rebates announced by the civic body. In their presentation before Ms. Dikshit and the Delhi Finance Minister, A.K. Walia, top house tax officials are believed to have argued that there were 15.5 lakh properties in the city and not 25 lakh as earlier presumed by the Municipal Valuation Committee. The figures are based on a house-to-house survey carried out by the Postal Department. Of these, it is estimated that 30 per cent are commercial and 70 per cent are residential. Arguing that people mostly constructed their houses towards the fag end of their career -- either towards retirement or after retirement -- officials claimed that senior citizens, those above 60 years, owned a substantial number of these properties. Further, the number of houses owned by women had increased in recent years. With the increase in house tax rebates from 100 sq. m to 200 sq. m to eligible property owners, concessions in house tax for those staying in flats and also the one-time prepayment of property tax scheme, revenue would considerably reduce, officials argued. "This is a case of distribution of largesse by the political leadership without taking into account its financial impact on the MCD," officials said. It is believed that at least three members of the Hardship and Anomalies Committee had objected to such a large number of rebates being doled out by the MCD. Further, the lowering of categorisation of more than 200 colonies and nearly three dozen villages including highly-commercialised posh colonies like Greater Kailash, South Extension, Defence Colony and urbanised villages like Hauz Khas and Kotla Mubarakpur would significantly bring down the revenue collection. Senior officials argued that house tax collection from commercial properties would come down drastically due to the various steps taken by the civic body. With the new system based on self-assessment, the MCD would have to wait till March 30 to receive house tax from property owners. "This being the first year, we have been asked to go soft on defaulters and not enforce penal provisions," they said. Given that the rates of taxes were to remain unchanged for the next three years, any increase in taxes would be "next to impossible" thereafter as the civic body polls are scheduled to be held in 2007. "With the present rate of taxes, revenue collection is unlikely to cross Rs. 600-650 crores. Poor revenue collection would have its impact on the civic amenities being provided by the MCD and finally make things difficult for the party to win the next elections. This is a politically unwise decision," argued a senior Congress leader.
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