Arvind Kejriwal's promise to waive house tax and related arrears if elected to power has started a new debate among residents...
Arvind Kejriwal and his Aam Aadmi Party (AAP), after having offered free electricity and water to Delhiites in the last assembly elections, have this time decided to dangle another freebie for voters during the MCD councillor elections scheduled on April 23. Kejriwal now promises to waive house tax and associated arrears once elected to power.
But this freebie offer has started a new debate. Residents of Delhi are now questioning the intent of the political party and its chief minister. They say the cash-strapped MCD can hardly afford this step. Some have even labelled it a political gimmick. AAP has its defence ready, claiming to have carried out a detailed study of MCD's financial capabilities. One thing, however, is for sure — the educated Delhi has had enough of freebie politics.
When City Spidey contacted Dilip Pandey, AAP head for the Delhi unit, he defended the announcement saying the party had already cleared its view on the subject. Pandey reiterated Delhi Deputy Chief Minister Manish Sisodia’s statement, “Before making the announcement, the party has carried out a detailed study of the financial condition of MCD and the process of making amendments in the Delhi Municipal Corporation Act, 1957.”
“Residents of Delhi have been facing a lot of harassment because of the complicated and fraudulent process of house-tax assessment by civic bodies,” he added.
When asked if the announcement before the elections was yet another freebie, he said, “Before the Delhi Assembly elections, we had promised to provide free water and we stood by our promise. We also reduced electricity bills by half. We are in the process of providing free Wi-Fi throughout the city. There is a huge disparity in people's incomes in Delhi. Our government is determined to take care of poor people and ease their financial burdens to some extent.”
House tax is one of the major revenue sources for municipal bodies. According to the fourth finance commission report, only one-third of all residential properties in the city are liable to pay house tax. Three municipal corporations in Delhi — EDMC, SDMC and NDMC — collectively generate about Rs 1,600 crore a year as property tax, which is only 30 per cent of its potential.
According to official data, of the Rs 1,600 crore, SDMC collects nearly Rs 1,000 crore, while NDMC and EDMC generate their revenue through property tax of about Rs 400 crore and Rs 200 crore respectively. The other revenue sources for the MCDs are parking and advertisements.
However, when City Spidey discussed AAP's offer to waive property tax with the city's RWAs, CGHSs and individual households, most were not in favour of house-tax abolition.
What may surprise residents even more is that the AAP government had earlier opposed giving any rebate on tax. A letter (dated June 11, 2015) issued by the Delhi government to its Urban Development department regarding EDMC reads, "No concession or rebate is provided in taxes, fees or charges."
Many people were apprehensive that abolishing house tax would threaten their ownership.
"A tax receipt ensures ownership of the house," said Suresh Bindal, president of the federation of IP Extension Cooperative Group Housing Societies. "If house tax is abolished, how are we supposed to claim ownership over our residential properties?"
“Houses in unauthorised colonies and slum areas are not liable to pay house tax, and they comprise 30 per cent of the total house tax payers in the city. Owners of residential properties on government land, and DDA and CGHS flats are the ones paying house tax. The government should reform house tax instead of abolishing it,” added Bindal.
Ashutosh Dikshit, chairman of United Residents Joint Action (URJA), said, “This kind of decision will adversely affect the country's growth. How long can a government provide public facilities if taxes are abolished? Delhi is the model for other states in the country. We cannot afford to set a bad example for other states. We are not bothered about who wins the election, but if AAP wins and follows through on this offer, it will be an unfortunate decision.”
Many other residents commented on the contradiction of how the government is encouraging people to pay taxes on the one hand and offering to abolish them on the other. Several residents, however, are in favour of Kejriwal’s decision.
“If the state assembly wants to amend the Delhi MCD Act, it can," said KS Bhati, president of the Federation of RWA of Sector 9 (FORWAS) and a resident Ganpati Apartments. "But I hope the government keeps the long-term consequences of this decision in mind. It must have some alternative plans to generate revenue. Water bill was abolished but the government did not bear any financial loss. Similarly, electricity bill was reduced by half, but no financial loss was reported. I hope the government has a better plan if it is contemplating this decision.”