With the North Corporation reeling under a debt of Rs 1,300 crore, the civic body in the budget meeting Friday proposed an increase in property tax, and levying of professional and betterment taxes, to increase its revenue.
These proposals, however, were also made in last year’s budget but could not be passed through the House as the political wing was against increasing taxes.
“With elections next year, raising property tax this year seems highly unlikely,” an official said.
This year, the civic body has proposed a 1% increase in property tax under the A to E category, 2% increase in the F to H category, and revised the property tax of commercial properties, guest houses and other non-residential properties up to 150 square feet from 15% to 20%.
Unauthorised colonies add to civic body’s woes
The budget for 2018-19 shows that the North corporation’s debt rose from Rs 550 crore to Rs 1,300 crore. The reasons are many: Rs 8,832 crore to maintain five hospitals; paying salary to staff; managing sanitation in the city; and running over 700 schools with an income of Rs 7,532 crore. Most of it is done using property tax and, to an extent, grants and aid from government institutions. Since North MCD has several unauthorised colonies that don't pay taxes, the civic body is facing a crisis. Civic bodies are also dependent on Delhi government for money and BJP leaders say Rs 1,531 crore has not been paid — a claim denied by AAP.
Like last year, betterment tax and professional tax have been proposed. The professional tax is Rs 1,200 for people earning between Rs 2.5 to Rs 5 lakh; Rs 2,400 for those earning between Rs 5 to Rs 10 lakh, as well as for those earning above Rs 10 lakh.
The property tax was last revised by the corporation in 2011, when it was increased by 1%.
“We are hopeful the property tax hike proposal will be approved by the Standing Committee of the North DMC. We need more avenues to augment our income. Besides that, two new taxes — professional tax and betterment tax — have been proposed,” said commissioner Madhup Vyas.
To increase revenue, the North body has decided to earn money from advertisements on DTC buses, railway properties, parks and app-based cab aggregators.
The move is an uphill task, though, as the civic body has been unable to collect around Rs 900 crore due in property tax from different government agencies.
Vyas said they have already held talks with the DTC and Northern Railway, and agreed to share profits from ad rights.
A skill development scheme has also been proposed to promote entrepreneurial activities among sanitation staff and their families, and a provision of Rs 50 lakh has been made in the budget, the North body said.
Several old projects like the redevelopment of Azadpur and Model Town staff quarters, building 42 new parking spaces, smart boards, and garbage segergation at source are yet to see success.