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MANY TURNS TO THE TRUTH

When the West Bengal municipal (amendment) bill, 2003, was passed in the assembly way back in July to legalize water taxes in all urban areas, there was a faint apprehension that it would run into trouble. Charging user costs to a consumer is a perfectly logical economic exercise, but it can never be a popular one. And Mamata Banerjee, champion of the masses, did not fail to prove the point when she forced the mayor, Subrata Mukherjee, to roll back the proposed tax for filtered water.

Much has been made of the immediate fallout of such a decision. The first question is, what happens to the terms and conditions of the Asian Development Bank’s loan of Rs 1,245 crore for environment improvement in Calcutta' The poor mayor had invited trouble after he changed the Civic Act to levy water tax on the valuation of property rather than on the size of the ferrule. This meant that house-owners who pay a property tax of Rs 500 quarterly would have to start paying a water tax. But when such a prudent decision comes from the corporation after all these years, things can hardly be as simple as they are made out to be.

Charging water taxes is all very well and most municipal corporations across the country are charging it to consumers. It is unfeasible for the government to provide water free and cover the costs of such provision by general taxation. This is all the more true when expansion and upgradation of the water supply system have become an absolute necessity. In the face of it all, generating revenues by introducing user costs is the best thing to do.

Not by the rules

But things are horribly muddied when it comes to water tax in West Bengal, especially the property and water tax connection. Not that there are no existing water taxes. They do exist, but the anomalies in their incidence need to be kept in mind. The monthly water tax set by the state government is on the basis of the ferrule size. This has no bearing whatsoever on what the corporation charges. Also, as proposed by the new bill, water taxes would have been delinked from the taxable ferrule size.

That no clear-cut policy will ever be followed when it comes to taxes is substantiated by events over the last few months. When the Trinamool Congress-Bharatiya Janata Party board in the Calcutta Municipal Corporation decided to slash the valuation of landed property by 50p per square feet from Rs 1.20 after, the initial hike in the colony areas earlier this year, it drew much flak from left leaders in the civic body. The move, it was felt, would entail losses — directly from the reduced property valuation and indirectly from water taxes that the high property valuation would have entailed. Branding the exercise as a pre-election stunt, one leftist gravely noted that such “disparity in property tax should not be encouraged in the public interest”.

Murky waters

Well, the ruling left had been guarantor to the corporation when it signed the ADB agreement to charge a water tax on house owners paying a quarterly property tax of Rs 500. If the disparities in property tax caused concern during the attempt to link water taxes to property taxes, then so should have done other factors. How is it then that the government — even as it categorically stated that it wants at least 50 per cent of the maintenance costs of the water works to be borne by the users — had nothing to say about the bill which, when implemented, would have conveniently left out well-known areas of south Calcutta' The accusation about wooing voters made by the left leaders during the fracas over property revaluation, has to be reiterated, only this time pointed the other way round.

The water tax issue has confused the people enough to dissuade them from asking too many questions. As an afterthought, that seems to be exactly what the government and the mayor have been working towards. That it was the same mayor who had agreed to slash property valuation in colony areas and signed the amendment bill blurs the lines between parties and affiliations.

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