Himachal Pradesh stands to lose central grant funding

SHIMLA: Forgetting to revise the property taxes to appease the voter base might cost Himachal Pradesh’s urban local bodies (ULBs) to lose central funding. 

Under the 15th Finance Commission, four municipal corporations — Dharamsala, Solan, Mandi, and Palampur — 29 municipal councils, and 27 Nagar panchayats could lose Rs 419.40 crore in tied funds if they fail to prepare property tax regulations, reported the Tribune on Wednesday, February 23. 

The Government of India has made it essential for ULBs to rewrite their property tax regulations using the unit area technique, which takes into account a property’s plinth area. By March 2022, these bylaws must be notified in order to be eligible for the central grant. By evaluating characteristics such as location, structure, age, and occupancy of a building, a tax of up to 25 per cent can be imposed for various categories such as commercial, domestic, and so on.

Manmohan Sharma, Director of the Urban Development Department, Government of Himachal Pradesh informed the Tribune that all ULBs were required to notify property tax rules by March 2022, as stipulated by the commission. If this is not done, the company will lose Rs 419.40 crore. 

The budget allocation would have been utilised by the state in improving the state’s sanitation. In 2021’s Swachh Survekshan, the queen of hills dropped by 37 ranks landing at 102nd position. This is after the state government has crores in maintaining the municipal sanitation standards. 

He went on to say that all ULBs have been told to inform the bylaws in August and December 2021. These were not notified by any ULB other than the Shimla Municipal Corporation. “A week has been given to all Commissioners and Executive Officers, as well as municipal council Secretaries, to notify these.” Those who do not follow the instructions will have to face dire consequences,” Sharma added. There are 11,648 households in Solan, and property tax revenue is Rs 4.73 crore. This tax is charged once a year, and there are currently 862 defaulters owing Rs 3.02 crore. This points at the crying need for funding and the central grant in the state. 

The delay in the revision of the property taxes can be owing to how it might tilt the voters against the ruling party in the current election year. Previously, the state had two MCs in Shimla and Dharamsala. In October 2020, Solan, Mandi, and Palampur were upgraded ahead of the election, bringing the total to five.