Andhra Pradesh - Vijayawada   

CPI(M) threatens stir over World Bank loan

By Our Staff Reporter

VIJAYAWADA, OCT.24. The Communist Party of India(Marxist) has demanded that the Vijayawada Municipal Corporation (VMC) scrap the proposal for availing a Rs. 200 crore loan from the World Bank, failing which the party threatened to take up a campaign among the masses to highlight the `perils' involved with the move.

Instead, the CPI(M) suggested that the corporation could approach domestic lending agencies like-HUDCO, LIC or nationalised banks for availing the loan to undertake developmental activities in the city. Moreover, the interest rates offered by the global agency was between 9 to 10 per cent whereas, several domestic agencies were willing to the offer the loans for less than 7 per cent the party said.

Addressing a press conference here on Sunday, the CPI(M) city unit secretary and floor leader in the corporation, Ch. Babu Rao, warned that the move to avail the World Bank loan would result in an all round increase in taxes for the common man.

Conditionalities

Quoting from the `appraisal' report of the Andhra Pradesh Urban Reforms and Municipal Services Project (APURMSP) prepared by the State Government, Mr. Rao said the World Bank had imposed several conditionalities like increase in user charges, full recovery of operation and maintenance (O&M) expenditure from the public, fixation of property tax based on the value of the property instead of the existing provisions of calculating it on the basis of the rental value, and several other conditions.

Stamp duty

He alleged that the World Bank had suggested that the stamp duty be reduced from 13 to 5 per cent and the loss of revenue should be offset by taking measures like enhancing the property tax, water tariff besides imposing user charges.

Mr. Rao said the reduction of stamp duty would benefit only the real estate lobby, whereas the additional taxes would badly hit the common man.

There was also a suggestion for removal of the Urban Land Ceiling Act (ULCA) to benefit the excess land holders at a time when there was a demand for land reforms to benefit the landless poor, he said.

Another suggestion made by the World Bank was to create separate trusts for overseeing the implementation of the developmental activities in the municipalities by appointing district level officers. Such a move would be a serious infringement on the functioning of the local bodies, Mr. Rao said.

The CPI(M) leader wondered as to how come, the Congress, TDP and BJP who had divergent views on various issues joined together on Saturday to pass a resolution in the council seeking World Bank assistance. No efforts were made by the Congress to hold a debate on the issue before rushing through the resolution.

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