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    Published On : Sun, May 12th, 2013

    Stung by LBT, NMC paying salaries to employees from development funds

    The NMC is being starved of much needed revenue as transactions worth crores of rupees  have come to a standstill due to traders’ protest against LBT since past few weeks

    Nagpur News:

    The Nagpur Municipal Corporation (NMC) Administration has started to feel the heat of Local Body Tax (LBT) sting as far as financial condition and revenue sources are concerned. The chain of events like traders’ prolonged agitation against the enforcement of LBT by Maharashtra Government from April 1, almost no income from Octroi duty and the unexpectedly low recovery from LBT have increased the woes of NMC financially.

    The month of April has put the NMC in a tight spot as the expenditure was well above the income for the month. The NMC with Rs 1300 crore budget is finding itself in the situation of a sort of bankruptcy, albeit, for short period, and the LBT is bleeding NMC white as far as financial condition at present is concerned.

    The NMC Administration, left with no choice, is paying the salaries, almost to the tune Rs 100 crore, to its employees from the development funds as has been witnessed in the month April thus starving the Orange City of its share of development targeted for April and even May if the worsening situation prevails for longer period. The longer the situation persists the longer the financial problems. Once the reserve fund of Rs 100 crore for salaries is completely exhausted the dark future stares the face of NMC and its employees on salary front.

    It may be recalled the NMC mopped up Rs 525 crore through Octroi duty which amounts to over 50 per cent of NMC’s total annual revenue. Apart from grants by Maharashtra and Central Governments for development purposes, revenue by way of recovery of loans, various other taxes like Property Tax, and other income sources, the NMC abysmally depended on Octroi duty for important activities including development and salaries of its employees.

    However, since the Maharashtra Government enforced the LBT in place of Octroi duty from April 1, transactions of crores of rupees have come to a standstill as the traders’ community has resorted to an intense agitation protesting LBT since the past few weeks directly triggering chaotic financial position in NMC and on city’s development front, too. The citizens, who are becoming victims of no-win-win situation is another disturbing aspect. However, the condition of citizens is not so serious as some of them have gone Online shopping and others are managing somehow by purchasing the essential goods and other stuff when shops or other establishments  open in the evening though the traders have been  facing shortage of essential goods due to “bandh”.

    The NMC Administration has failed to convince the adamant traders’ community of LBT benefits by holding meetings with them and discussing the LBT issue. The NMC even organized workshops for apprising the traders in details of the procedure for registrations for LBT and other finer points as well. But the traders’ community, who previously cheated and looted the consumers by taxing additionally on the products by their whims and fancy, refused to accept LBT theory as the LBT would “starve” them of the whopping “extra” money by way of cheating and looting the consumers. The LBT would also stop the traders’ earlier “dirty tricks” to “steal” the NMC revenue by evading the Octroi duty by indulging in any means like connivance with Octroi Department officials or by tricky ways. Of course, the proverbially exceptions are there and all the traders, businessmen and industries do not resort such “dirty deals”.

    However, till now only 2000 traders or businessmen have got themselves registered with LBT. The NMC has dispatched the LBT Registration Numbers directly to over 22,000 traders who were paying Value Added Tax (VAT) and got registered them with NMC. The move has somewhat eased the financial position of NMC but still over 70 per cent traders have been making faces over the LBT issue.

    The NMC received at least Rs 40 core per month but considering the prevailing situation over LBT the NMC could garner only Rs 2.50 crore through LBT. The NMC has put on record the expenditure incurred in the month April to the tune of Rs 65 crore as against income of Rs 40 crore. Now, it is obvious, the developments works have got a hard blow and the salaries are being paid from NMC contractors’ bills, some contractors charged. Looking to the situation, it would not be a shocking fact if the NMC goes into a sort of bankruptcy.

    POLITICAL PROTEST CONTINUES: The Ruling Party at NMC the Bharatiya Janata Party, too, has protested the enforcement of LBT. Even the Mayor Anil Sole had knocked the doors of High Court but in vain. The Ruling Party had brought a proposal in the General Body meeting of NMC urging Maharashtra Government to withdraw the LBT. Other parties like Congress, NCP, Shiv Sena, too, have protested the LBT, albeit, contradictorily.


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