NMC meet approves waiver of penalty on property tax, but...

 

 

 

The civic administration is caught in a vortex on the issue of waiving of the penal charges on property tax arrears. A favourable decision appealing to city fathers would deal a big blow to the aim of meeting revenue targets and declining the proposal would hurt sentiments of city fathers. Municipal Commissioner Radhakrishnan B faces a classic syndrome, to be or not to be, as city fathers have lobbed the ball in his court. During the general body meeting, Praful Gudadhe-Patil initiated discussion and demanded concession in the form of waiver of the penalty that is 24 per cent per annum as income of citizens has hit hard due to COVID-19.

 

 

 

The matter, after discussion, was adopted unanimously by the House. But current situation on Nagpur Municipal Corporation’s on the financial front is quite weak. There has been constant refrain to avoid any deviation from financial discipline and favourable decision on accepting waiver of penal charges poses a big challenge for administration. Right now, Property Tax is single biggest source of revenue for cash-strapped civic administration. Already past arrears have put its shadow on development work that are going on at snail’s pace and no new works are proposed in two successive civic budgets. On top of that, lockdown and curbs due to COVID-19 situation and possible third round of lockdown like situation may further spell doom for the civic finances. So it is the most tricky situation for the NMC bosses.

 

If administration does not take any decision, it would hurt sentiments of corporators who face the general election next year and hence are keen to appease the voters. Already the city fathers have not been able to initiate petty development work in their Prabhags and hence the favourable initiative on Property Tax front can ensure some sympathy for them among city populace. Gudadhe-Patil, speaking on the proposal, pointed out that the civic body needs to straightway waive off penalty charges for three years, 2019, 2020 and 2021 as there has been job losses, pay cuts and other financial implications for citizens. Many people were forced to default on Property Tax payment as they faced sudden financial crisis brought about by COVID-19 situation. Hence he demanded that NMC while distributing demand notes should directly deduct the penal charges due from property owners. About Rs 320.36 crore arrears are due for year 2019, about Rs. 514.79 crore for year 2020 and for current year, 2021 they are about Rs 680.32 crore. Widening of tax bases to six lakh plus properties though Geo Tagging has enabled it to wither the shock due to high default during last financial year.

 

Yet the huge arrears and its waiver are not going to be an easy task for NMC that is struggling with finances. Mayor Dayashankar Tiwari, in his ruling after the discussion of the issues in which Ruling Party Leader Avinash Thakre also participated and backed the demand, however, said that as per rules it is prerogative of Municipal Commissioner to decide waiver of penal charges. Already previous amnesty schemes for Property Tax owners have received quite lukewarm response from defaulters. So there are several issues that need to be taken into account while granting relaxation. Tiwari echoed same feeling when he said though the demand is right but waivers cannot go on permanently. Maximum NMC can provide one or two months of time to defaulters to pay their arrears of three years in one go if they want waiver of penal charges. But ultimately the decision rests with Municipal Commissioner who has big challenge on ensuring meeting the financial targets for the year.