Vadodara civic body announces 10% property tax rebate to tide over crisis

Deputy Municipal Commissioner SK Patel said the move is to benefit both the VMC and the citizens. "We are planning to make use of social media and newspapers to ensure that the message about the rebate reaches the people. Property tax is one of our biggest incomes," he said.

In a desperate attempt to replenish its dwindling funds, the Vadodara Municipal Corporation (VMC), for the first time, announced a 10% rebate for citizens who pay their advance property tax for the current financial year between June 1 and 30. The cash-strapped civic body is in further crisis due to the Covid-19 lockdown with several of its projects getting stalled.

VMC officials say that Tuesday’s announcement will encourage many residents to pay their property tax on time. Speaking to The Indian Express, Deputy Municipal Commissioner SK Patel said, “The rebate is an immediate relief. It is valid only for the current financial year for those who have no pending dues. Anyone who has cleared past dues or is willing to clear them along with the penalties will also be eligible for this rebate for the current year. The rebate will be calculated on the spot for physical payments in ward offices and by our online payment deals as well so that the citizens pay 10% less to begin with.”

Patel said the move is to benefit both the VMC and the citizens. “We are planning to make use of social media and newspapers to ensure that the message about the rebate reaches the people. Property tax is one of our biggest incomes,” Patel said, stating that in the last financial year 2019-20, the VMC earned Rs 454 crore against the estimated Rs 474 crore through property tax collections.

“This year too, we are expecting a similar income. We also have another major source of income through town planning and we will try to ensure that it is smoothly executed,” Patel said.

It was just recently that the VMC, which has been in a hand-to-mouth existence for several years now, managed to stabilise its finances. However, the lockdown and suspension of development projects exhausted all its funds and incurred a liability of about Rs 70 crore per month, including salaries of staff amounting to Rs 45 crore.

Chief Accountant Santosh Tiwari said, “We could sail through the months of March and April because we had reserves but the months ahead are tough. At the moment, there may not be issues in paying salaries as we have a monthly octroi grant of Rs 26.8 crore regularly given by the state government.”

However, several officials rue that the grant has been stagnant at the amount since octroi was abolished in 2003. Tiwari said, “Our annual growth with octroi was pegged at a compounded 18%. Had there been a corresponding increase in the octroi grant, we would have been self sufficient.”

According to Patel, the VMC has also planned to raise Rs 100 crore via bond sale to tide over the financial crisis. This sum, primarily, is meant for the ongoing Amrut Yojana that aims to link the water network in the city.

The suspension of development projects has affected several ongoing housing projects that are meant to rehabilitate over 2,000 displaced families in the city. While the VMC has a monthly expenditure of Rs 15 lakh towards the 480-odd families of Kalyan Nagar who were displaced in November 2014 and are awaiting their rehabilitation homes to be ready, Patel said that the liability of paying the rent allowances to other families lies with the developers under the Public Private Partnership (PPP) model.

“Ultimately, the VMC will have to compensate the developer by allowing some relaxation in the premium amount of the land. So the civic body will bear the cost. We are also planning to open up more of our commercial plots for development to generate income,” Patel said.

On May 6, Congress corporator and former deputy mayor Chirag Zaveri from Vadodara wrote a letter to Gujarat Chief Minister Vijay Rupani, seeking Rs 500 crore for the cash-strapped VMC.