KMC may get to tax Centre’s property

KOLKATA: The Union urban development ministry is drafting a new law which would enable urban local bodies to tax Central properties in their respective areas, union urban development secretary M. Shankar said in Kolkata on Wednesday.
“The law is in the final stages of preparation. It will be placed in the cabinet shortly, after which it will be placed in Parliament,� Shankar told TNN after attending a seminar on urban governance.
Taxation of Central properties has been one of the most contentious issues for the urban local bodies.While most of these properties are situated in prime locations in major cities, they do not pay any tax.
A fixed annual amount is paid as service charges for the civic amenties provided by the civic bodies.
However, these charges are insignificant compared to the either amount of property the Central organisations hold or the level of civic amenties provided to them. Civic bodies have been clamouring for a long time about laws being changed to enable them to tax these buildings.
“We expect this law to improve revenue generation of the urban local bodies,� Shankar said. He commended the role of city mayor Subrata Mukherjee in the move. “Your mayor has been at the forfront of the demand for taxation of centrtal government properties,� he said.
The whole exercise behind municipal reforms was to make the uban local bodies credit-worthy. “It has now become increasingly difficult to get loans from the financial institutions like HUDCO.
Thus, funds have to be generated from the market. But for this, local bodies must be credit-worthy,� joint secretary in the union urban development ministry PK Pradhan said.
Two schemes — the City Challenge Scheme and the Pooled Finance Development Scheme — have been set up by the ministry to provide incentives to the ULBs in this venture. “ULBs need to adopt new concepts, unconventional methods and novel tools in order to improve their revenue generation and make themselves credit worthy,� Shankar said.
User charges for civic amenities and privatisation of certain civic functions are among the several paths being followed. “Urban local bodies in West Bengal have been shy of imposing user charges, but the trend is picking up,� Shankar said.