VMC plans tax hike to mop up Rs 10 cr

Aloria told the Vadodara Municipal Corporation standing committee that these measures would hike octroi collections by Rs 6 crores.

Strangely enough, however, the budget has not taken into account the possibility of octroi abolition or the inclusion of the 21 approved villages within the VMC limits. When asked about this shortsightedness, Aloria only said that the budget had been prepared with “today’s scenario” in mind.

The civic chief later told reporters that moving away from the practice of levying 2.5 per cent octroi on all vehicles, the administration had suggested varying the tax on the basis of the kind of vehicle, with the minimum chargeable amount being Rs 300 and the maximum Rs 15,000 per vehicle.

Alongside, the administration has also suggested increasing the octroi on petrol, kerosene, cigarettes and video equipment, but Aloria claimed that the rates would still be lower or the same as that of other civic bodies in the State.

In yet another decision with far-reaching consequences, the administration has proposed to mop up Rs 50 lakhs each by taxing those using water and drainage lines outside the city limits; by increasing general tax and high-rise fire tax; and by hiking water taxes and rates.

While the fire tax proposal has already been approved by the standing committee, the VMC will require the State government’s consent to increase octroi charges.

The administration has also sought a Rs 3 crore-hike in vehicle tax; simultaneously, it put up a proposal to levy a one-time vehicle tax.

While Aloria claimed the taxes and rates were sought to be hiked to balance the Rs 10.66 crore loss in the Rs 228.62 crore budget, sources said the VMC had also used up Rs 32 crores of its revenue surplus. Moreover, the civic body apprehends an octroi shortfall of Rs 10 crores in 1998-99; it has also not been able to sell land worth Rs 7 crore. To top it all, the Fifth Pay Commission has increased its annual salary payments by Rs 18 crores.

Now for the expenditure. While Aloria carries forward the traditional emphasis on development, after years at the top spot, water has made way for roads as the highest priority, with a proposed allocation of Rs 40.39 crores. Water works receives Rs 21.38 crores; construction Rs 15.72 crores and drainage Rs 9.40 crores.

Of the Rs 103.27 crores earmarked for development, the VMC proposes to raise Rs 43.81 crores through loans, Rs 9.45 crores through grants and Rs 50 crores through the capital budget.

Aloria has also proposed to do away with the quota for administrative wards, for which Rs 7.30 crores had been allocated in 1998-99. While the councillors’ Rs 3 lakh-quota remains unchanged, the administration has suggested each of the 78 councillors give up Rs 2 lakhs for the works so long sponsored by administrative ward budgets.

Admitting candidly that the quality of services had suffered because of the VMC’s failure to keep pace with the city’s growth, Aloria placed clear emphasised on large-scale developmental works. Forty per cent of them will be carried out by the four zonal offices, while the rest will be project works.

Asked how the administration would cope if the elected wing nixed the proposed hike in taxes — as it has done in the past — Aloria said it was now up to the elected wing to plan the various budget heads. Describing the budget figures as realistic, the civic chief said all the amount earmarked would be spent in the financial year.

A revised budget for 1998-99, reporting a surplus of Rs 9.27 crore, was also presented to the Committee. The General Board will have to approve the 1999-2000 budget before February 20.