Property tax bill delayed

Almost nine months after the deadline set by Central government, the legislature on the last day of the winter session failed to give its final consensus on the bill that is set to rationalise the property tax system in Mumbai. The bill is now expected to be scheduled in the upper house in the budget session in March 2009.

On Saturday, the bill was passed by the lower house amidst pandemonium. However on the final day of the session, only two bills were tabled for discussion in the Upper House and the property tax bill failed to find mention.

A senior bureaucrat from the Urban Development Department said: 8220;We will now place it in the upper house of the budget session8221;.

There have been incidents in the past when the government has delayed the bill. In 2005, the lower house had passed the Black Magic bill to punish offenders. But the bill was never tabled in the upper house and still awaits approval. This bill was strongly opposed by Hindu right wing activists. Owing to elections, it was never passed.

The property tax bill is also staunchly opposed by BJP-Sena MLAs and MPs as well as South Mumbai8217;s Congress leaders, who believe implementation of the capital value system will double the property tax.

At present, residents of South Mumbai 8212; where rents are frozen at pre 1940-levels 8212; pay much lower property tax than those living in the suburbs because tax is calculated on the notional rent properties can earn.

With Lok Sabha elections scheduled in March 2009, approval of the property tax bill during budget session appears unlikely.

As per the seven mandatory reforms to be undertaken under JNNURM to avail funds for various developmental projects, the BMC and the state government had given a written commitment to carry the property tax reform by March 2008. But the switch to capital value based system has been a matter of debate, as properties in South Mumbai with low rents owing to the Rent Control Act of 1940 may now have to cough up considerably larger sums in tax.