The civic budget on Saturday is set to exempt 98 per cent households from paying water tax. New constructions in the city will, however, become dearer, with the introduction of a labour welfare cess.

After the tax waiver for households with 10 mm and 15 mm ferrules, only about 50,000 households in the city — which have 20 mm and 25 mm ferrules — will have to pay for water, said a civic official.

The previous civic board of the Trinamul Congress had de-linked water tax from ferrule size and collected it on the basis of property valuation, before withdrawing it in 2004.

The civic body is bound by an agreement with the Asian Development Bank to collect water tax.

The labour welfare cess — at one per cent of the project cost — will be introduced on the directive of the state labour department. The cess, for both residential and commercial constructions, will be deposited with the state government for the benefit of workers in the unorganised sector. Construction proposals of less than Rs 10 lakh have been kept outside the purview of the cess. A similar cess is being introduced in Sector V.