The Vadodara Municipal Corporation (VMC) commissioner proposed a draft  budget of Rs 1,526 crore for the financial year 2011-12 with significant hike in commercial property tax and water charges for these properties. The common man can, however, breathe a sigh of relief as residential property taxes have not been raised.

With the civic body in need of more money, it was expected that there may be some hike in taxes and charges levied on citizens. But municipal commissioner M K Das has limited this only to commercial properties.

Presenting the budget, Das said the hike had become unavoidable as the salary bill of the civic body had gone up by Rs 90 crore in wake of the Sixth Pay Commission recommendations. At the other end, since 2007-08, there was no hike in the octroi grant given by the state government. He added that since 2003-04, the civic body had not hiked taxes. In 2003-04, there was only a marginal increase in commercial property taxes.

Das has proposed that the factor to calculate property tax should be raised to a maximum ceiling of 5.5 instead of the present 2.5. "In comparison, the factor in Ahmedabad is seven," Das said. He added that water charges for commercial properties were proposed to be raised by 25 per cent. He added that the taxes for residential properties were not raised as citizens were already reeling under inflation.

The civic body has estimated its revenue income to be around Rs 712.9 crore and it will also raise Rs 813.9 from capital resources. It expects to generate a revenue surplus of Rs 143 crore. Capital resources from JNNURM are projected at Rs 199 crore, while from other grants are projected at Rs 291 crore. The civic body has proposed to take a loan of Rs 130 crore in 2011-12 for which it already has necessary clearances.

The VMC commissioner has proposed an expenditure of Rs 1,049 crore on development works. Of this amount, Rs 113 crore will be spent on flyovers and bridges while Rs 386 crore will be spent on roads. It has proposed an expenditure of Rs 205 on drainage and storm water drains. Another major expenditure proposed is of Rs 213 crore on housing schemes for urban poor.