Just before the Assembly elections, when Smt Vasundhara Raje, the then state BJP president, released the party'selection manifesto, in which a promise to abolish the house tax was made, the Congress party leaders said that BJP was making such tall promises, which it would not be able to fulfill if it comes to power. They went further to say that no government could do away with the house tax, which is one of the major sources of income for 181 municipal bodies in the state. But, just on the eve of Republic Day, the cabinet, which met in Kota, decided to abolish the tax with an immediate effect. Thus, the ruling BJP has fulfilled one of its major election promise so. The decision to abolish the house tax was similar to the decision of previous Bhairon Singh Shekhawat-led BJP government, which, with one stroke, had abolished the octroi.
Though it was again a major source of income for the local bodies, at the same time it was a big irritant for the business community which was feeling harassed, in the hand of some corrupt official of the bodies, in the name of this tax. After thorough homework, the Shekhawat government came to the conclusion that expenditure on collection of this tax was much more than its collection. Though it is a debatable point whether the party was able to cash it in the elections, it certainly provided a big relief to the trading community.
According to financial experts, these municipal bodies in the state have the potential to collect about Rs 250 crore annually by way of house tax, but previous records show that in the past total realisation on account of house tax never crossed Rs 43 crore, which again is much less than expenditure incurred by the municipal bodies on the collection of this tax.
Though under the local body act, the municipal bodies are empowered to take action against the defaulters, in the past, barring a few major cases, no proceedings were initiated against the house owners. There was always slackness on the part of administration of these local bodies to collect the tax. Some of the bodies in the past came out with rebate schemes to encourage the house-holders to clear their dues. But even this did not have desired impact and house tax dues kept mounting over the years.
About little over a year back, during the elections of these bodies, house tax became a major issue. The Congress party leaders left no stone unturned to tarnish the image of BJP and its government for not fulfilling its promise. Just before these elections, there was a thinking in the party that its government should abolish the tax, as it would help the party in continuing its supremacy over its rivals. But the decision could not be taken for one or the other reason. BJP'sperformance in the elections of local bodies was commendable, but the newly elected office-bearers of these bodies, under the control of BJP, wanted that government must take an early decision on the issue.
Three months back, Congress party leaders started an agitation, asking the people not to deposit their house tax, as ruling BJP had promised to abolish it. Some of the local bodies, controlled by the Congress, refused to collect the house tax. Even some of BJP-controlled bodies did not show much enthusiasm in collecting the house tax in their respective limits.
Since house tax is a major irritant for a common man, all the political parties were of the view that steps should be taken to do away with tax. But unlike BJP, Congress government in the state could not muster the courage to take such a drastic decision.
When Shekhawat government was planning to abolish the octroi, this was opposed by the municipal bodies, as they would lose one of their major sources of income. Average earning of municipal bodies from this tax, at that time, was little over Rs 200 crore with an average annual increase of about 15 to 20 per cent.
Since at that time it was a major election promise of BJP, Shri Shekhawat was determined to abolish the octroi in the state. While abolishing the octroi, the government made budgetary provisions to compensate the municipal bodies to make up their loses of income form this tax. These bodies, since then have regularly been getting funds on this account.
Though Vasundhara Raje government, while abolishing the house tax, has not come out with plans how to compensate the bodies, it is almost certain that government would make a provision in the budget to compensate these bodies on this account.