MCD panel rejects MVC proposal to re-categorise colonies

Even as MCD struggles to increase its income, a committee of councillors has shot down most of the proposals mooted by an independent panel for doubling its property tax revenue.

Last Updated: Dec 15, 2010, 18:50 PM IST

New Delhi: Even as MCD struggles to increase
its income, a committee of councillors has shot down most of
the proposals mooted by an independent panel for doubling its
property tax revenue, including one on upgrading 168 colonies
to higher tax-slot due to their proximity to Metro lines.

The MCD sub-committee, however, agreed with most of the
suggestions of the Municipal Valuation Committee (MVC) on
upward revision in factors for designating tax rates in
commercial properties. The panel rejected the proposal for
downward revision of factor for three-star hotels in the city.
The upgrading of colonies to higher-tax slot and revision
of other factors coupled with new tax rates announced by MCD
in 2010-11 "are estimated to more than double the revenue of
Rs 696.49 crore per year to Rs 1,660 crore per year," the
report of the four-member Delhi government-appointed MVC,
tabled in the MCD Standing Committee in July, had said.

The MVC had decided to upgrade 168 colonies on account of
proximity to Metro lines and a number of DDA developed
colonies and special commercial properties.

Areas under the jurisdiction of MCD are at present
divided into categories A to H depending on infrastructural
facilities there. Among the 168 colonies, 12 were proposed to
be upgraded from B to A, 20 from C to B and 42 from D to C.

The councillors` sub-committee headed by BJP member V P
Pandya, which went into the MVC report, said it did not find
any merit in the proposal to upgrade colonies to higher-tax
slot for being located within one km of Metro lines.

"We think earlier parameters like capital value of land,
rental value, social and physical infrastructure and proximity
to commercial centres are enough to categorise the colonies.
There is nothing to suggest that proximity to Metro lines have
led to infrastructure upgrading in colonies," Pandya said.
"We have agreed with most of the proposals on commercial
areas," he said.

He said the members` panel also rejected the proposal to
upgrade trans-Yamuna DDA colonies and to downgrade the tax
designating factor for three-star hotels. It recommended a
clear policy for industrial areas citing "lack of clarity" on
the issue in the MVC report.

Standing Committee Chairman Yogender Chandolia said the
report of the MVC, if accepted without amendment, could have
created trouble for Delhiites and increased their burden. He
said the revenue must be increased by widening tax net and
focusing of 4,816 properties owners of which are liable to pay
Rs 500,000 a year in taxes to MCD but are defaulters.

Nine lakh properties are paying tax to MCD but officials
estimate 22 lakh more can be brought under the tax net.

The amended proposals will now be put on a public notice
and suggestions will be invited from people after which it
will be brought back to the Standing Committee.

PTI