Tax reforms necessary for JNNURM funds: Civic chief
January, 08th 2009
Municipal commissioner Pravinsinh Pardeshi on Wednesday said that rejection of tax reforms would affect the Pune Municipal Corporation's
chances of claiming JNNURM funds for development works.
"The PMC has made a commitment to the central government on tax reforms and failure of the same could affect the flow of JNNURM funds," Pardeshi told TOI.
The Jawaharlal Nehru National Urban Renewal Mission requires certain reforms to be undertaken by states and cities in the levy of user charges on different municipal services.
The last time the PMC revised its tax structure was in 2004. "This time, we have not proposed a change in property tax and octroi structure," Pardeshi said. "Even while proposing a hike in water charges, we have ensured that common citizens don't have to carry excessive burden. Instead, we are making efforts to increase the revenue by other means like a hike in fees for hoardings and banners, charging the fee for underground cables and tax on heavy vehicles plying on city roads. We need to match expenditure and user charges for civic services," the civic chief said.
Last week, Pardeshi had proposed a hike in civic taxes, including a two-fold increase in water and road taxes. He has also proposed that sewage, conservancy, fire and theatre taxes be doubled.
The tax hike will come into effect only if it is ratified by the elected members. According to the Bombay Provincial Municipal Corporation (BPMC) Act 1949, it is obligatory on the civic general body to take a final call on a tax hike proposal on or before February 20, so that the new tax structure can be accommodated in the PMC's annual budget of 2009-10. The standing committee of the PMC on Tuesday postponed its decision on the tax hike proposal. Political parties are unlikely to support the proposal fearing public wrath ahead of the general elections.
"I will try to convince all party leaders to approve the tax reforms. The cost on providing services like water and sewage treatment is on the rise and there is a need to hike the tax on these services. This will not only help the PMC operate and maintain the service structure, but also ensure smooth flow of JNNURM funds without a hitch," said Pardeshi.
As per JNNURM norms, the state/urban local body must formulate and adopt a policy on user charges which should include proper targeting of subsidies, if any, for all services, ensuring the full realisation of operation and maintenance cost. The PMC had also committed to central government detection of illegal connections and authorising them and metering of water supply connections. Efforts to reform tax structure were promised in 2006 but elected representatives rejected any hike in tax. The rollback in the property tax hike had not gone down well with the the JNNURM committee and the PMC had promised of property tax reforms by 2007.