“Capital value review will increase property tax, illegal buildings will pay double”

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SANJANA BHALERAO speaks with City Commissioner Iqbal Singh Chahal about how BMC plans to support the major infrastructure push that the 2022-23 budget is looking forward to.

How does BMC plan to increase revenue to support major planned infrastructure in the city. Why are you drawing on your fund reserves?

In the last budget, our reserves stood at Rs 81,000 crore, today they have risen to Rs 87,500 crore. Revenues are directed to these reserves. So, for all these years, whatever we put in the reserves, we draw from there. If we draw on the reserves and take out an internal loan to finance the project, it is a technical adjustment.

Also in this budget, you have provided for the property tax to be levied at Rs 7,000 crore. However, you have not been able to meet the target for the past two years. How are you going to ensure that we collect Rs 7,000 crore in 2022-23? Will the property tax increase?

In the last financial year, we collected Rs 5,100 crore as property tax and so far our collection stands at Rs 4,800 crore. We must take action in the coming year to achieve the projected goal. The first is the implementation of the planned revision of the capital value of the property tax, which has not been done for two years.

The revision will increase the property tax. Second, we will collect a double property tax on unauthorized/illegal buildings, starting this year. Although we grant an exemption for houses of 500 square feet, the exemption amount of Rs 462 crore is small. With these measures, we will return to the original property tax collection levels.

Citing revenue losses in last year’s budget, BMC had approached the state government to appoint it as the single planning authority (SPA) for Mumbai. What is the status of that?

For improved and systematic planning of the city, we had approached the state government to appoint a SPA for Mumbai which currently has several agencies like Slum Rehabilitation Authority, Mumbai Metropolitan Regional Development Authority, Mumbai Port Trust and Maharashtra Housing and Area Development Authority making their own development plans for the areas they govern. Some bodies also operate under the Union Government.
The discussion on the appointment of the SPA is in the final stage.

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