Ahmedabad civic budget increases taxes

Property tax, water and sewerage charges hiked

The Rs 1,004.01 crore draft budget of the Ahmedabad Municipal Corporation (AMC) for the financial year 2005-06, has proposed an additional tax burden of Rs 15 crore for residents of the city.

The budget presented by the Municipal Commissioner, Anil Mukim, last week, has also hiked the property tax as well as the water and sewerage charges.

No new projects have been planned for the fiscal year. The Commissioner said that stress will be on completing the ongoing projects. But the draft budget is likely to be altered substantially by the elected wing of the AMC.

Sources in the Congress-controlled AMC said that the elected wing is likely to roll back all or most of the tax hikes proposed by the municipal commissioner. The ruling party is also likely to announce several new projects.

The present budget proposes new taxes worth Rs 15 crore by way of increase in property tax rates and water and sewerage charges. The budget proposes a 10 per cent hike in water and sewerage charges. The tax from the residential property has been raised from Rs 10 per sq. meter per annum to Rs 12 and from Rs 22 to Rs 24 for commercial properties. This would put and extra burden of Rs 17 crore on the tax payers.

The budget projects a 57 per cent of the income from octroi, 17 per cent from property tax, two per cent from water and sewerage charges, eight per cent from non-tax revenue, 13 per cent from revenue grants, subsidy and contributions and three per cent from rest of the sources.

"We have to make short-term goals, medium-term goals and long-term goals for development of the city. Our aim is to remove developmental disparities in different parts of the city," Mukim said.

The Congress party has already expressed its displeasure at the proposed draft budget. According to some highly reliable sources, Congress is likely to make some major changes in the budget at the standing committee level. The standing committee of the AMC will discuss the budget at length and is likely to pass the budget with necessary changes in next week.

On the draft budget, mayor Anessa Mirza told Business Standard, "The new municipal commissioner has presented the budget, but we have to see how the final budget would shape up."

Out of Rs 896.16 crore, Rs 173 crore will be used for development works.

Mukim said total proposed development work during the year, including grants and subsidies from various sources, will be of Rs 301 crore.

"The AMC needs to formulate a long term policy to bridge the gap between its expenditure and income by reducing subsidy. Every year there should be an increase of 10 per cent or more in tax for the next 12 years to bridge the gap. Additional income of Rs 1.80 crore is expected this year from the proposal," he added.

The budget also proposed to increase in property tax rates. Mukim said the AMC has not increased property tax rates for the last four years. So it is imperative to raise it by 10 per cent in the present budget, he added. The AMC expects an additional income of Rs 12.90 crore from this proposal.

Mukim said that the focus would be on upgrading the existing infrastructure. The money allotted for roads and buildings has been increased to Rs 20.87 from Rs 7.37. There was increase in money for solid waste management from Rs 2.32 crore to Rs 20.25 crore and for hospitals, from Rs 85 lakh to Rs 5 crore.

Stating that there was about 20 to 50 per cent difference in the budget that is presented and which actually gets implemented, Mukim added that this year, the budget has been designed to bridge this gap. ''This would help us in privatising and implementing of projects and also with policy making.''