The Hindu : New Delhi News : MCD hits back at Delhi Govt.

Online edition of India's National Newspaper
Friday, May 20, 2005

New Delhi

New Delhi

MCD hits back at Delhi Govt.

Sujay Mehdudia

`Recurring losses could touch 786 crores for the five-year period'

NEW DELHI: After Delhi Finance Minister A.K. Walia wrote to the Lieutenant-Governor, B.L. Joshi, charging the Municipal Corporation of Delhi with failure to spend the Plan funds on developmental works, it is now the turn of the civic body to hit back. In its latest communiqué, the MCD has blamed the Government for causing a "recurring loss" running into several crores to the civic body due to unending delay in granting approval to the revised fines and fees for various categories. It is learnt that the loss could touch Rs. 786 crores for the five-year period.

According to highly placed sources, the Municipal Commissioner, Rakesh Mehta, has written to the Principal Secretary (Urban Development), O.P. Kelkar, blaming the Delhi Government for the recurring loss being suffered on account of non-approval of revised rates of fees and fines. It was pointed out that the matter had been sent to the Delhi Government for approval two years ago, but nothing constructive had been done to push the case through. The MCD had sought a 10-to-12-fold increase in the fees and fines that have remained unchanged for the past three decades.

The most surprising aspect is that the Delhi Government has reportedly raised objections to revision of fees for some commercial categories and is intent on giving some "special consideration'' to this section, something that has led to delay in approval of the new fees and fines.

For instance, during 2003-04 the collection from these fees, fines and taxes amounted to Rs. 12.98 crores. Based on the revised rates, the likely collection during 2004-05 should have been Rs. 153 crores including Rs. 13 crores at the existing rates. The loss for five years would be Rs. 786 crores which also includes incremental increase of taxes in the normal course by 10 per cent during each year. Additional loss would go up to Rs. 85.47 crores in the next five years. Thus a delay in Delhi Government's approval of the proposal for revision of fees, fines and taxes would result in revenue loss of Rs. 786 crores that should be made good by the Delhi Government by release of equivalent additional annual grants over and above the grants released to the MCD under the current and future Finance Commission arrangements.

According to official figures, under the tax on advertisement account, the present collection stood at Rs. 11.59 crores and with the proposed 12-fold increase it was expected to shoot up to Rs. 139 crores. However, the Delhi Government is understood to have raised objections to the hike in tax for advertisements and it is being cited as the main reason for the delay in granting approval.

Similarly, the MCD has proposed a 10-fold hike in taxes on horse driven vehicles, milch tax, theatre tax, fee on vehicles and other vehicles.

Printer friendly page
Send this article to Friends by E-Mail

New Delhi