A new report by Bloomberg suggests that Mumbai’s civic body is looking for new ways to boost tax income for the state. This comes as real estate earnings for the State Government have fallen dramatically due to the economy. It is said that the authorities are planning to implement a “garbage tax” in order to increase revenue while also increasing the fees for issuing birth certificates.
Reports suggest that tax revenues dropped by 5% over its target to Rs 23,850 crores in this year through March 31. Given the slow pace of recovery, authorities are also said to be considering new measures and penalties for defaulters.Economists from Care Ratings believe that these measures will seek to “recover outstanding dues of property tax and water tax by way of issuance of notices to defaulters, disconnection of water connections, attachments and auction of properties.”The Brihanmumbai Municipal Corporation (BMC) is reportedly expecting its income to fall by 11% on Rs 78,670 crores worth of investments primarily due to low bank interest rates set for the next financial year.
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The implementation of GST (Goods and Service Tax) has also hurt the state’s income, as per the report. Prior to its implementation, nearly a third of the city’s earnings came from entry tax or octroi. This revenue stream was removed after GST came into effect, although the Central Government promised to make up for a part of the losses in revenue. Moreover, the Central Government has been unable to send funds to state governments due to the waning economy.
However, Junior Finance Minister Anurag Thakur, announced early last week that the Central Government will release funds soon in two portions. Starting April 1, Mumbai is expected to increase spending by at least 9%, particularly for the coastal road project that connects Marine Lines to the northern suburbs of the city. This may prove to be a hard task given that property tax collections have fallen by 12% over the current year’s estimates.
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