Under the Central Government’s flagship Smart City Mission, Bhubaneswar was ranked first in the Smart Cities challenge conducted by the Government of India in the year 2016. Undoubtedly, it is one of the fastest developing cities in the country based on feasibility and potential social and economic impact.
Moreover, the recent Ease of Living Index (EOLI) -2020 released by the Union Ministry of Housing and Urban Affairs (MoHUA) in the first week of March-2021 placed Smart City Bhubaneswar at the second position under less than a million (10 lakh population) category. It provides an all-inclusive understanding of participating cities across India based on four main columns, i.e. quality of life, economic ability, sustainability and citizens’ perception survey.
The four pillars of EOLI are further divided into 14 indicators and 49 sub-categories that become the whole basis of accessing or analysing the urban development outcomes. One among the EOLI indicators is housing and shelter which directly or indirectly affects the quality of life and economic ability of a city as a whole.
One of the main reasons for Bhubaneswar city being considered as a hotspot destination for education, IT parks, entrepreneurship and sporting hub is its affordable and accessible housing and rent as compared to several other metro-cities and smart cities in the country. Housing here not only refers to the residential complexes but also includes shops, hotels and lodges, mandaps, banks, companies and showrooms or any buildings for commercial purposes.
In India, the municipal corporation of a particular area assesses and imposes the property/holding tax annually on the owners of any land, house, office buildings and any other tangible real estate property etc. The tax amount varies with the location, area, type of buildings etc.
The citizens of Bhubaneswar (who hold a land/real estate property) were shocked to learn just after the Covid-19 lockdown that their property taxes have been increased exponentially, that too, with effect from 2019-2020 financial year. Various media reports publish contradictory data with regard to the percentage of hike of the tax. Thus, let us take an example based on facts to view a clear picture of the situation.
An owner of a 100 decimal duplex residential plot near Saheed Nagar area had to pay holding tax of Rs 650 annually to the Bhubaneswar Municipal Corporation (BMC) before 2019. Now as per the new property tax regulations, he/she will have to pay a whopping amount of nearly Rs 13,650 annually.
This is an upsurge of approximately 2000 per cent in simple mathematical calculations or 20 times the previous amount though this calculation is location specific and may change to higher side or lower side in different areas under BMC. Also, the tariff levied on the buildings used for commercial purposes is more as compared to the residential plots.The outcome of this arbitrary and steep increase of property tax is a blatant economic burden that is going to hit the common man badly. There may be a simultaneous rise in the rents of various residential to commercial structures owned by the respective citizens in the city, to overcome such massive burden of property taxes.
This will impact the cost of living, quality of life and economic prosperity of lakhs of tenants who rely on affordable housing in this fastest developing city. Especially, the young students and professionals who come to the capital city from various remote places of the Odisha and other neighbouring States for quality education and jobs will suffer immensely. The rise of housing rents will surely discourage startups, small businesses and entrepreneurship programmes in the city. The cost of services like lodging and boarding, rents for mandaps, hostels accommodation, nursing home charges etc will rally up to the higher levels.
Though lately, the decision has been strongly criticized by residents of the city, opposition party leaders from both BJP and Congress with the likes of Sura Routray demanding revocation of the amended property tax rules. Several petitions have also been filed in the Orissa High Court seeking immediate rollback of the decision.
Thus after facing condemnation from various corners, the State Government has put on hold BMC’s decision to collect holding tax at an increased rate. The BMC must release a transparent and detailed framework of the property tax calculations in the city. The Municipal Corporation as a part of Local Self Government is duty bound and must reach out to people who voted them and approach and convince them if there is a dire necessity of enhancing holding taxes.
The increase must be reasonable, reliable and affordable and in agreement with the general public. If a common man has to suffer under the load of taxes, every political party offices that are spread on large patches of land in the heart of the city must come under the purview of property tax regulations.The Congress Bhawan near Master Canteen area, BJD party office near Unit-6, BJP party office in Unit-3, CPI party office near Jaydev Vihar etc are present in the most costliest and busy areas of Bhubaneswar. The parties concerned must be charged with taxes for the property they hold.
As stated earlier, a citizens’ perception survey is one of the four pillars of EOLI, where citizens of a city cast their opinions on various parameters set by the MoHUA such as availability of affordable housing, education, cleanliness, health, governance, safety and security, transportation, public service and others. These decisions if not overturned will surely decline Bhubaneswar’s rank in the ease of doing business and ease of living index in the near future.
(Faculty of Physics, CBSH-OUAT)
