Tuesday, January 23, 2018

PMC Budget, City & Citizens!

“Corruption is the enemy of development, and of good governance. It must be got rid of. Both the government and the people at large must come together to achieve this national objective”... Pratibha Patil.

No need to introduce this name our first Lady President who is also known for her strait forwardness which has been reflected in her above quote. No subject of sharing isn’t corruption as there is nothing I want to write or even think about corruption such is its existence in & around us but what I want to share is about later part i.e. development & good governance. And yes when these two terms are applied to our Pune city then PMC’s name is bound to get pop up! That way Pune is no more just PMC but it’s a big conglomerate of PMC, PCMC, Cantonments, PMRDA & ZP i.e. Zillah Parishad, yet PMC is always in lead role as big brother of the house or say big sister! The news which made me remind Hon Ex President’s quote is there will be hike in property tax by PMC this year. This isn’t a news actually, as before every budget may it be Country’s or State’s or PMC’s, all is about “Kya badhega?” i.e. which commodities prices or which taxes will be increased; as any govt thinks only on the lines of squeezing the existing tax payer because only a living & healthy person can donate blood! No, I am not saying don’t increase property tax or any tax, that’s not allowed to say by being a builder in this city or State or Country, I am pointing out towards what as a common man, one expects from the City, State or Country for the taxes he or she pays & in return what he gets.

Before going in to expectations of common man from the city budget (lets control our topic to the city at present), we must have a look on the logic given by PMC or city bosses for proposed hike in property tax. I don’t have exact count but last year’s PMC’s budget was some Rs 5000 crores & people were as festive or thrilled as share brokers gets when the share market's sensex touches new high. But as usual to make budget for some figure & achieving that figure, are two different things is what our rulers always forgets & that’s what happened to budget’s last year’s magic figure too! None of the departments was able to generate the targeted revenue resulting the budget fall short nearly by 30% in revenues is what experts are saying. No one will speak in open but even the PMC officers are saying the target itself was wrong & that’s the reason it failed. For that lets see which are the major revenue generating departments for the PMC; they are LBT (earlier it was octry), then Building permission, Property Tax, Water Ses (pani patti), Signage & Hoarding Permission, Encroachment are the departments through which PMC’s revenue gets generated. In above list, top three grocers are GST, Building Permission & Property Tax, so let’s see department wise what has happened for the revenue front.

LBT, now GST which is a Central Govt’s tax is applicable for ever transaction in this city on any commodity & whatever is charged part comes back to PMC as local body. I think only this front is somewhat nearing target as compare to any other city in the State, Pune still attracts many people for purposes like job & education to migrate here & it’s the sheer population which is required to purchase so many things for its day to day needs, which in turn gets reflected in generation of GST for PMC! At the same time we should not forget this ever increasing population if is a boon for GST revenue then it’s a curse (pardon me I am not using it in bad way) to city as the city is supposed to provide basic infrastructure to this population which is its right! And on one side if increased GST revenue from the city is good sign of growth then that growth has to be backed up by various services which PMC is supposed to provide, which unfortunately isn’t happening! At the same time strong follow-up is required to get the share from GST collection from Central Govt, so PMC gets its share in time to keep its system running or else like justice delayed is justice denied, same way, payment delayed is payment denied!

Then comes, the building permission dept, which till just few years back used to be a biggest revenue earner for PMC! Those who don’t understand how building permission can generate revenue for PMC, for them lets understand every sq ft of new permission in the city (PMC limit) given by PMC gets nearly RS 200 sq ft of revenue for PMC. This revenue comes via many heads i.e. development charges, various premiums for getting free of FSI portion of building like stair case, passages, balconies, double height terraces etc. At the same time TDR consumption also is being done with premiums & then there are charges like road development which are not allowed to be taken yet PMC is charging it. So if approximate say one crore sq ft of area new projects are sanctioned then this means nearly Rs 200 crores revenue for the PMC. But since last few years this graph is consistently declining & PMC bosses must look in to the basics of the entire building permission as well real estate scene if they want to take the graph up. As unless more & more proposals comes for sanction the building permission dept won’t be able to achieve the revenue target & for that some ground work is a must. Any businessman knows there are two ways to make money, less turnover but higher margins or more turnover with lesser margins & till now PMC was doing earlier way. Though the turnover was less yet the end product i.e. flats was being sold but slowly surrounding areas of PMC i.e. PCMC & now PMRDA started developing & people got option of buying home at cheaper price. At the same time PMC’s imbalanced infrastructure made some areas (suburbs) well developed with all basic infrastructure, naturally rates of lands as well flats in these suburbs went sky rocketing & beyond buying capacity of most clients!  And as rates of all premiums as well development charges are directly related to ready reckoner rates of the lands buildings in PMC become more costly than in compare with other local bodies. And then times were/are changing, there are migrants coming in this city & they do need home, but the home should be in their budget, which isn’t possible in PMC limit so there is no demand & as there is no demand there is no new proposals in the quantity there used to be earlier & this has reflected in reduced revenues of building permission!

At the same time our dear UD’s (urban development dept) amazingly clueless & ever-changing policies, is one more thing for less supply of new building proposals in PMC area. From banning construction in 100’ distance from foot of the hills to no development adjoining nallahs or streams to parking policy to not taking decision about DPR in Metro track, so many policies are framed in such a way that its becoming impossible to plan a building & build it without making it costly for the masses! If you want more buildings then you need to create more spaces for them is simple funda of urban planning & then if you want to make the homes affordable then see that basic infra like roads, water, drainage & public transport is evenly distributed in all parts of the city, so people won’t rush for some particular suburb. Right now even in smart suburb like baner-balewadi also there is no even distribution of water supply, roads are not marked & at any hour of time rickshawalas refuse to come & this is about smart suburb, so imagine what must be happening in other parts. Lets understand people won’t buy flat in two cases, one where is rates are beyond their budget & second is rates are in budget but no infrastructure is available! Making & implementation of development plan i.e. DP plays a vital role here & unless we won’t do it fast, it’s difficult to make the revenue graph of building permission grow up again! Though PMC bosses are trying hard & things like architects sanctioning plans & twenty four hours plan passing like things are moving up but when your hand is fractured just pain killer won’t do & you need to apply plaster to the hand & not leg!

On the top of it there is issue of development of infrastructure in newly merged villages as joke is all the developments of the buildings is mostly complete already, of which premiums has been either received by PMRDA or the Collector but expenses will be done by PMC! I think politicians & administration should take a very strong stand that they must get their share of premiums collected in these villages & not only eleven villages but all thirty four villages from right now!

Finally its Property Tax, talks of hiking the same has been done every budget but our dear elected members don’t want to make their voters angry so it’s always thrashed out & instead false targets are given to other departments to cover the deficit as that’s easier & win-win situation for all! I doubt whether all the properties in PMC limit are recorded in first place & then are they taxed & then is the tax from every single property is being collected. As I said at the start, its healthy person who always ends up donating blood but what about the person who is healthy but wearing mask of sickness? Unofficially it’s said that nearly forty percent of city’s population lives in slums (read illegal constructions) & which isn’t surely been taxed, this means sixty percent people paying property tax for hundred percent people! And then out of that sixty percent nobody knows how many are listed in tax list. Then there is issue of old establishments & new one, for e.g. a new two bhk flat has to pay property tax of nearly Rs 4000 per year while a flat some twenty years old has to pay one third of this rate & in some cases of old city homes, this rate comes to few hundred rupees but residents of all three establishments uses same infrastructure of the city is a fact! I really wonder who derived this property taxation system of ours; this must be unique in entire world! May be there can be some logic but to a plain mind like mine, simple thing is like income tax, there should be only one criteria for property tax & that is carpet area I am using & use of it i.e. commercial or residential. The problem every time why tax hike is opposed by the so called “mananaiyas” is recovery of dues but never they jointly comes together & see that there is no single due of property tax pending & a drive for recovery is never supported! Then issue is how we are going to collect property tax from slums, I never remember any discussion in PMC’s general body meeting about it, though there always has been heavy discussions about making fines to the developers whose projects actually runs this city via revenue they generates! And on top of it when there is hike in property tax by already burdened limited tax players, it’s bound to get opposed by all segments & sure eventually it will be withdrawn!

Instead it’s high time that PMC bosses must act on increasing net for taking more property tax payers in, as well apply a same platform to all the citizens for tax payment. One more aspect is giving services in lieu of property tax as when I don’t get proper water supply, no drivable roads or public transport, public toilets stinks & public schools& hospitals are below par; in such case how you are going to make people compel to pay the taxes or expect their willingness to pay the property tax, is the question I will ask to entire PMC rulers!

In the mean time I read that hoarding fees collection Hon. PMC Commissioner expects to be increased to Rs 200 crores from Rs 20 crores at present, well I admire positive thinking of Mr. Commissioner but when ninety percent of hoardings are illegal & of political leaders which are rulers of the city, I doubt even last year’s target will be achieved! Rather looking at the revenue heads like Encroachment fees as well Sky Signs (hoardings) charges, on one side it’s the citizens who encroaches on roads/footpaths for selling goods & it’s the citizens only who buy their things from the encroachers! Also the Punekar’s must understand one thing, nothing comes free in this world & if you expect PMC to serve you better, then your duty doesn’t ends at just paying property taxes but in many other ways, like keeping your surrounding clean, saving water, using public transport, not buying vegetables from illegal encroachmenters & many such as then only the you are entitled to call yourself citizens of this city or else there is no difference between you & an illegal migrant, mind it!!

Sanjay Deshpande 
Sanjeevani Dev.

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