Sena's promise of tax rebate may deprive BMC of Rs 350 crore

MUMBAI: Sena chief Uddhav Thackeray's election sop to property owners may burn a hole in the BMC's pockets.
On Thursday, Uddhav announced that if the Sena won the civic polls, then property tax would be waived for all homes having a carpet area up to 500 sq ft in Mumbai. He also said that there would be a steep rebate in property tax for all homes between 500-700 sq ft.The grandiose scheme may have adverse financial implications on the BMC, which earns Rs 5000 crore annually from property tax.The announcement comes at a time when the civic body already stands to lose out on one of its biggest levies, the octroi revenue, since the goods and services tax (GST) may come into effect this year.
In the year 2015-16, the BMC garnered around Rs 350 crore from homes below 500 sq ft.There are around 14 lakh units having an area of below 500 sq ft. A civic official requesting anonymity said that Rs 350 crore is around 1% of the BMC's budget, which in 2016-17 was Rs 37,052 crore.
Observers have termed Uddhav's declarations as poll sops. “By announcing it at this time when the civic elections are at the doorstep it only appears to be a populist slogan.With the BJP being so aggressive in its election campaigning, the Sena probably fears that the middle class may shift to the BJP and therefore it is trying to attract the attention of the lower middle class,“ said political analyst Surendra Jondhale.
Politicians claimed that the Sena's announcement was aimed at wooing its traditional voters especially those in chawls. Samajwadi Party leader in the BMC Rais Shaikh hit out at the Sena, saying that the real problem of the residents in these chawls in not being looked into. “Most of these chawls are so dilapidated that they are in need of redevelopment,“ said Shaikh.