Tuesday, August 26, 2014

NMC borrowed Rs 100 crore that recovery could have brought in

Times of India: Nagpur: Tuesday, 26 August 2014.
The fiscal health of Nagpur Municipal Corporation (NMC) is a picture in stark contrast. While empty coffers have forced it to procure Rs 100 crore loan for executing various works, the civic body has failed to recover Rs100 crore property tax arrears from residents, educational and commercial establishments apart from government organizations and PSU offices in the city.
NMC wants citizens to timely pay property tax but it has been unsuccessful in recovering outstanding amount from the state government agencies for many years.
According to information obtained under Right To Information (RTI) Act by Sanjay Agrawal, the biggest defaulter among the government offices is Maharashtra Airport Development Company Ltd (MADC), which is developing Mihan and partly owns MIL, the company that runs the city airport. Property tax on airport has not been paid for several years, a senior NMC officer confirmed.
The tax was not levied when the airport was owned and operated by Airports Authority of India, a central government entity. MADC has a property tax outstanding of Rs10.75 crore including Rs 1.99 crore for the current year. Despite repeated reminders, MADC has not responded, the officer said.
Similarly, the second biggest defaulter is reality firm IPSEL, located near Harihar Mandir in Lakadganj. The reality firm has defaulted property tax to the tune of over Rs9.69 crore.
Standing committee chairman Narendra Borkar said that the process of recovering arrears has been slow but has now gained momentum. "I had also set a property tax collection target of Rs250 crore before the end of this financial year."
He pointed out some arrears have not been paid for over 15 years. "We have sent such defaulters many reminders but they haven't bothered to respond," he said.
The RTI reply also brought to fore arrears from educational institutions and commercial establishments having links with political leaders. Educational institution LTJSS, owned by ex-Maharashtra minister Satish Chaturvedi, had defaulted property tax to the tune of Rs85,76,372.
NIT too defaulted property tax of Rs2.23 crore on its six properties situated in different areas in the city limits. M/s Sell Ads figures in the defaulters' list with an outstanding of Rs3.35 crore.
Borkar said that NMC was pursuing the issue with senior officers of defaulting government offices and hoped that the money would be recovered soon. Civic officials, however, admitted it is difficult to collect the money from government departments.
He pointed out that the state government never provided any financial assistance to NMC. It even delays contributing its share for projects under Jawaharlal Nehru National Urban Renewal Mission, he alleged.