Civic agencies too at fault, miss chances to raise their own money

Civic agencies too at fault, miss chances to raise their own money

MCDs have failed to bring more properties under tax net and boost their revenue

It's not just that the city government is reluctant to release funds to the three municipal coprorations. Some Delhi government departments have also been conveniently evading property tax – a major source of revenue for the MCDs.

The city government departments owe Rs 86.91 crore as property tax and service charge to North Corporation, according to official figures.

Some Rs 116 crore is owed to East Corporation as property tax by Delhi Development Authority, while Delhi Transport Infrastructure Development Corporation Ltd is yet to pay Rs 1 crore, according to MCD figures.

But the municipal corporations cannot lay the entire blame on the city government. They need to put their own house in order first.

Not only have they failed to bring more properties under the tax net, they have also not been able to generate sufficient revenue from advertisements, licensing, and renting out banquet halls and community centres. And they are inefficient in collecting property tax.
For example, there are over 10 lakh properties within the North Delhi Municipal Corporation limits, but only 3.5 lakh pay property tax, says a senior official.

The North and East Corporations have prepared a list of government departments and real estate developers who are major property tax and service charge defaulters, owing crores to the civic agencies.

Among the central government agencies, Northern Railways owes Rs 67.41 crore in service charges and the Department of Post Rs 9.99 crore.

Transport Authority in Sant Nagar, Air Force station in Narela, Income Tax staff quarters in Prasad Nagar and Income Tax Colony Pitampura are also among the defaulters. Delhi Government’s Department of Education too owes money to MCDs.

A show-cause notice has been sent to Parsvnath Developers for not paying Rs 61.73 in property tax.

East Corporation Mayor Meenakshi says that many government departments including Delhi government schools, Delhi Transco Limited, DDA and DUSIB owe crores in property tax to the East Corporation.

She adds that all departments whose property tax or service tax is due are being approached. “The civic agency is requesting them to pay their dues. In case they refuse, stern action will be initiated against the defaulters, including penalty and attachment of bank accounts,” she says.

Salaries not paid
The East and North Corporations do not have money to pay wages to many its employees.

The North Corporation could only pay salaries to less than half of its employees this month, and may not be able to pay up in the coming months, says a senior official. The civic agency needs Rs 171 crore a month to pay wages to its over 70,000 employees. That's nearly Rs 2,100 crore annually just for the disbursement of salaries.

“We don’t have that much cash. We have managed to pay only 40 per cent of our employees and we don’t have  money to pay salaries next month,” says an official.
The civic agency was also not able to pay old age pension to the beneficiaries for over eight months. “The Rs 1,200 is the lifeline of these people,” says Virender Babbar, a councillor from Paharganj.

The East Corporation requires over Rs 100 crore to pay salaries and pensions to its over 30,000 employees.

According to the corporations, Unique Property Identification Code (UPIC) is the way out as it aims to streamline database of properties under the jurisdiction of civic agencies.
The North Delhi Municipal Corporation has inaugurated the much-delayed UPIC scheme. The idea was first proposed by the unified MCD in 2010.

Once the properties are registered on the server, they will also become part of North Delhi Municipal Corporation’s record,” says an official.

At present around 35 per cent property owners of North Delhi pay property tax and with the UPIC system more properties will fall under the ambit of property tax. Under the project, a unique number will be allotted to each property and the details of the property will get registered online with the North Corporation.

Each property will also be issued an UPIC card containing details about it.  Each building will also be photographed from the outside.

The cash-strapped North Corporation has also decided to engage ‘Property Tax Collection Agents’ to bring unassessed buildings under the tax net.

The scheme is proposed for two years and the civic agency expects to collect property tax from all buildings under its limits within this period,” says an official.

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