The North Delhi Municipal Corporation (NDMC) has significantly reduced the charges it levies on government agencies, telecom companies and other service providers for using the land and property of the corporation “whether it is underground, or the ground or overhead.”
To garner additional revenue, former mayor Ravinder Gupta had, in July last year, approved the imposition of such charges — also called ‘way leave’ charges — on companies and service providers which use roads, footpaths or street light poles in its jurisdiction.
The rule is also applicable to government agencies which use services of the municipal corporations for laying of water pipelines and sewage lines, as well as setting up electricity poles or gas connections. The companies are charged as per the circle rate per meter and they also have to pay a commercial tax which is four times the regular property tax.
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However, less than a year after its implementation, the charges have been reduced as none of the government agencies or service providers paid up. “These companies… claimed that sometimes the cost of using municipal land for laying pipelines and putting up wires was greater than the cost of the project itself. To keep up development works, the charges have been rationalised,” said a spokesperson.
Taking note of representations received from these service providers and the fact that the “ultimate burden of the charges” may be borne by the customers, the civic body’s standing committee has decided to drastically reduce the charge to 10 per cent of the “value of the land” being used.
The NDMC will also levy a one-time usage charge of Rs 547 per running meter in the area. The agencies or service providers will not have to pay the commercial tax anymore. While deciding the ‘way leave’ charges, the NDMC had estimated that it will earn a revenue of Rs 5,000 crore every year but has not earned anything from the additional charges.
The ‘way leave’ charge was among the measures undertaken by the NDMC to improve its financial condition. Some of the other steps taken by the civic body included bringing more property holders under its jurisdiction into the tax net, increasing conversion charges, introducing a new cluster advertisement policy and regularisation of floor plans in unauthorised colonies.