Ensure better services to encourage people to pay taxes: Naidu

Urban Development minister M Venkaiah Naidu on Thursday said that Urban local bodies should be made viable and use taxes collected from the people to ensure quality services.

New Delhi: Urban Development minister M Venkaiah Naidu on Thursday said that Urban local bodies should be made viable and use taxes collected from the people to ensure quality services.

The Union minister also said populism is not sustainable in the long run and if the bodies are providing good services people will not hesitate to pay more taxes as evident in Gujarat.

"We have to make our urban local bodies, viable, sustainable by participation of people. But if you increase tax and do not use that money for that purpose there is a reaction. So you have to guarantee services," Naidu said.

He said that if services are assured, people will pay taxes. "That is the lesson of Gujarat Model. Taxes, when compared to other states, to my knowledge are a little high in Gujarat. But still there is no protest. Why because service is assured," Naidu said.

He said free power is promised to people and then there is no power. Naidu said that while weaker sections, downtrodden sections need to be supported overall the issue needs to be thought about.

"But unfortunately the political system, I am not trying to blame anybody, that has become part of our lives... populism, populism, populism... Populism can sustain temporarily. But for long term development you need to take certain bold decisions, some bitter medicine," he said.

He said that a situation arose where municipalities would look at states for funds, who would turn to Centre which would look to World Bank or Asian Development Bank. Naidu said that the loans that are taken need to be repaid.

"I was just going through the earlier Finance Minister`s interim budget speech of 2014. He said 43.3 per cent is going for interest repayment," Naidu said at a conclave here where ministers from various states were present.

Naidu said that the government gives a lot of priority to housing for all and added that it was being considered how funds can be arranged.

He said that there has been a suggestion of channelizing tax revenues generated through enhanced economic activity on account of massive housing scheme back into housing sector through an escrow account. He said the suggestion is being examined.

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