Calcutta, May 23: The Trinamul government has decided not to collect water tax from the states 127 municipalities, which goes against the rules laid down by the Centres Jawaharlal Nehru National Urban Renewal Mission (JNNURM).
Urban development and municipal affairs minister Firhad Hakim made the announcement today during a meeting where chairpersons of 68 municipal bodies out of the 98 Trinamul-run municipalities were invited.
None of the municipalities across the state will collect water tax from next month. Our government is against collection of water tax, Hakim said during the two-hour meeting at Town Hall.
Sougata Ray, the junior minister in the Union urban development department, Sishir Adhikari, the minister of state for rural development, and Subrata Mukherjee, the public health engineering minister, attended the meeting convened by mayor Sovan Chatterjee.
No representatives from the 29 Left Front-run municipal bodies received invitations to the meeting.
The decision to abolish water tax runs contrary to what the Left Front government had done after agreeing to take a loan of Rs 3,570 crore from the Centre for various projects under the JNNURM. One of the conditions for the loan the memorandum of understanding for which was signed in 2003 was imposition of user charges to realise the overhead and operational costs of water supply in municipal areas.
In 2003, the state government had announced a decision to levy tax on filtered water and issued a circular directing the municipalities and corporations to impose the charge. The government had fixed the tax rates for the civic bodies, ranging between Rs 15 and Rs 120 a month, depending on property tax applicable to households.
The Calcutta Environment Improvement Project, run by the civic body, had signed up with the Asian Development Bank (ADB) for a loan of Rs 1,870 crore with the condition that the state government would levy water tax on residents of Calcutta.
As water tax remained a political hot potato because of Mamata Banerjees resistance, the CMC both during Trinamul rule between 2000 and 2005 and Left rule between 2005 and 2010 never collected water tax from residential connections.
Other metros like Mumbai collect water tax. The Brihanmumbai Municipal Corporation collected around Rs 708 crore a month in 2007 resources that can be used for development projects. The Calcutta corporation spends around Rs 180 crore on water supply every year.
Although several Left-run municipalities like Bally too were not collecting water tax, the governments intent on collecting tax was there at least on paper. After todays formal announcement, the government has made its intention clear. This could have an impact on funds flow from the Centre and the multilateral funding agencies, said a senior bureaucrat.
Out of the Rs 3,570 crore for JNNURM projects in the state, the Bengal government has got Rs 2,570 crore till now. With the state government moving away from water tax, the disbursement of the remaining Rs 1,000 crore may become uncertain, said the official.
An official in Delhi, however, had a different opinion. Central help for urban renewal or for water and sanitation projects do not come with conditions. But we try to put forward an economic or fairer model to state representatives when they come to discuss state plans, he explained.
Planning Commission advisers who favour charging water rates said the waiver could affect Bengals ability to access soft loans from multilateral agencies.
The next phase of the ADB loan of Rs 2,500 crore for which the government has already applied may become uncertain as the new government has decided to breach one of the key clauses in the agreement.
Trinamul leaders who are aware of the difficulties the government would face in accessing funds following the decision said they were trying to work out a solution.
I am requesting all the chairmen of the municipalities to pass resolutions that they cannot collect water tax as it does not feature on their party agenda. Once the resolutions reach me, I will take up the matter with the Centre, said Sougata Ray.
While the Trinamul leaders claimed that their plan was foolproof, convincing the Centre to change its policy would be easier said than done, said another senior bureaucrat. This will set a precedent and other states may approach the Centre with similar requests, he said.
The state government will take up immediate steps to supply safe water in 89 blocks afflicted with arsenic contamination.