House junks agenda on property tax hike

Reeling under a financial crisis, the Municipal Corporation’s (MC) proposal to increase property tax by four times was unanimously rejected by councillors during a General House meeting today.

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Municipal Commissioner Amit Kumar, however, recorded a dissent note, emphasising the need for the tax hike due to the poor financial status of the MC.

The proposal, introduced as a “table agenda” without Mayor Harpreet Kaur Babla’s approval, evoked strong objections from BJP councillors, who argued that it lacked the Mayor’s signature. Meanwhile, Congress-AAP councillors accused the newly elected Mayor of pushing an “anti-people” proposal. Despite the political debate, all councillors voted against the tax hike.

Defending the proposal, the Commissioner said, “The MC is facing an acute financial crisis and is struggling to pay staff salaries. Though the agenda has been rejected, my dissent note will be recorded as the hike in property tax is essential given the MC’s fiscal problems.”

The property tax structure in Chandigarh has remained unchanged since its introduction —3% on the annual rateable value of commercial, industrial and institutional land and buildings since 2004, and a similar tax on residential properties since 2015. The city currently has approximately 31,007 commercial properties contributing Rs 36 crore annually and 1,08,500 residential properties generating Rs 9 crore tax.

The MC’s proposal was aimed to increasing the tax rate from 3% to 12% across all property categories, along with an annual 1% hike on commercial properties (up to a maximum of 15%) and a 5% annual hike on residential properties.

Officials justified the increase by citing a Chief Secretaries’ conference recommendation, which suggested that property tax revenue should be 1% of the city’s GDP, according to which Chandigarh should generate over Rs 600 crore on account of tax.

At present, an annual demand of Rs 45 crore is raised by the MC, which is sub-par to the Mohali MC. The per capita property tax revenue in Mohali is Rs 1,700 against Rs 480 in Chandigarh. A comparative analysis with the MC of Mohali revealed that despite a smaller population of 2.34 lakh, the annual property tax demand stands at Rs 40 crore approximately there. In contrast, the Chandigarh MC, catering to a population of 12.50 lakh, has an annual property tax demand of Rs 45 crore. This disparity underscores the need to revise property tax rates in alignment with those of adjoining Urban Local Bodies.

Mayor calls on Guv, seeks financial aid

Mayor Harpreet Kaur Babla called on UT Administrator Gulab Chand Kataria and sought for a special grant for the MC. Babla said she was confident that the civic body would get financial support from the UT Administration to tide over cash crunch. She has been demanding a special grant of Rs 170 crore for the MC.

5 elected unopposed to finance panel

After AAP councillor Yogesh Dhingra withdrew his nomination for the Finance and Contract Committee (F&CC) election, five members were elected unopposed. AAP councillor Poonam had filed nomination as independent. The elected members are Gurpreet Singh Gabi (Congress), Saurabh Joshi and Jasmanpreet Singh (BJP), and Poonam and Suman Devi (AAP).