With eye on elections, cash-strapped MCDs offer amnesty scheme

The waiver extends to all categories of properties whether they are residential, commercial or government buildings.

Written by Naveed Iqbal | New Delhi | Published: December 10, 2016 5:28 am
mcd-759 Several strikes in the last two years by civic bodies led to pile-up of garbage across the capital. Archive

DESPITE BEING strapped for cash, the three civic bodies in the national capital have announced a slew of measures, including a property amnesty scheme for 95 per cent of Delhi’s population. With projected budget deficits for the East corporation to the tune of Rs 2,000 crore and Rs 2,700 crore in the North, taxpayers were given rebate on payment of full arrears and a waiver on penalty and interest amounts, with a eye on the municipal polls early in 2017.

The last two years witnessed strikes across municipal corporation departments after salaries and pensions were delayed, which led to conflict between the civic bodies and the state government for several months. After several austerity measures and two bailouts from the state government, the corporations were able to pay salaries on time and resume basic functions. In February this year, heaps of garbage remained uncollected across most colonies in Delhi after a 13-day strike by sanitation workers over non-payment of salaries.

Owing to the lack of funds, this year was marred by strikes and most developmental work were put on hold. In the recent revised budget estimates, no new developmental projects has been announced by the North and the East corporations and emphasis has been laid on completion of those already in motion.

With expenditure outweighing income, the corporations are still struggling to come back on track. But calling it a “landmark” scheme, the corporations provided substantial relief to those property taxpayers, who have not cleared their dues on this account. Taxpayers were given rebate on payment of full arrears and a waiver on penalty and interest amounts. The waiver extends to all categories of properties whether they are residential, commercial or government buildings. The 100 per cent waiver will extend to all taxpayers till February 28 and post that, rebate on interest will be halved by 50 per cent and no penalties will be charged.

However, with the elections to the municipal bodies slated for early next year, both the BJP and the Congress passed and supported the move respectively, albeit for different reasons. Ashish Sood, General Secretary of the Delhi BJP, said that the amnesty on tax was a long-standing political demand and before fighting the election, it is important to give people some benefits. “This helps the corporation because the time and effort we spend in legal tangles with defaulters against whom hundreds of crores in tax and penalty are pending, we can resolve them with a single move.” He added that it was important that the scheme was launched by all three corporations together to ensure uniformity across the capital.

The Congress however, supported the move since they did not want to be seen opposing a people-friendly move. “The scheme is in public interest. We would be seen as villains if we opposed this move. Yes there would be some loss to the corporation, which is already financially weak, but we could not have opposed it,” Leader of the Opposition in the North Corporation, Mukesh Goel said.

Meanwhile, the executive wing of the corporations, which had been building pressure on defaulters to pay up dues as the end of the financial year approached, said the announcement of the amnesty scheme, during a period of increased cash flow, deflated those efforts.

Some officials, however, say that giving amnesty to defaulters hurt not just the corporations but also the honest taxpayers.

“Only about 40 per cent of the population pays tax. Instead of incentivising those who do pay tax, the scheme incentivises those who do not. Also, when people are paying by the crores providing amnesty means skimming off a chunk of money that is readily coming in as it helps people dispose off cash that does not hold value elsewhere in the market,” a senior official said.

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