[image: The Financial Express] <http://www.financialexpress.com/>
*States*
*Saffron municipality safely populist*
Sanjay Jog
* * The Maharashtra government has attracted the Centre's wrath for its cart
wheeling act on the total abolition of outdated urban land ceiling and
regulation act (Ulcra) and reforms in rent control and property tax in urban
areas. The government's slow progress on this front has weakened its case to
press for more funds under the JNNURM.
Estimating the need for over Rs 31,000 crore to strengthen Mumbai's fast
decaying infrastructure, the state wants special consideration under the
Mission.
Although the Centre hailed the state's move to launch the much delayed
Mumbai Metro Rail project last month and assured funding of Rs 500 crore
under the Mission, it is grilling Maharashtra for not being prompt in
abolishing Ulcra. The Centre has short listed the state's sea link project
for viability funding. Maharashtra is one of the few states where Ulcra is
still in place in Mumbai, Thane and Pune. Chief minister Vilasrao Deshmukh
says Ulcra would be phased out after taking the opposition parties into
confidence.
However, critics allege the government has been inactive mainly due to
strong pressure from the builders' lobby. The union minister for urban
development S Jaipal Reddy has attacked the Maharashtra government for
dilly-dallying. He said, "I do not know why the state has a mental block
against the discontinuing an act that is antiquated and has no rationale."
He was supported by petroleum minister Murli Deora, Mumbai's voice in
Parliament for over 25 years.
Deshmukh affirmed his commitment to abolish Ulcra on Wednesday in the state
legislature.
Amending the rent control act is another contentious issue that may hamper
the state's chance to get more funds under the Mission. Opposition parties
and critics claim the government is not arguing its case well enough in
various courts, as it wants to protect the interests of landlords. The
government denies such allegations and argues that it is in the process of
reforming rent control norms for the benefit of city as a whole.
Another issue is reluctance to reform property taxes. Though the state
recently decided to raise the tax in old areas protected by the Maharashtra
Rent Control Act, 1999, the Mumbai municipal corporation controlled by the
Shiv Sena-BJP combine decided not to implement it. The saffron alliance
preferred a populist stance with the civic elections due in 2007.
According to a recent NIPF report, "Though many urban local bodies have
initiated reforms process, these efforts mask significantly underlying
structural problems that limit elasticity and buoyancy of the property tax.
In case of Pune, adoption of rental values would increase revenue yields by
an estimated 55%."
URL: http://www.financialexpress.com/fe_full_story.php?content_id=134983
*States*
*Saffron municipality safely populist*
Sanjay Jog
* * The Maharashtra government has attracted the Centre's wrath for its cart
wheeling act on the total abolition of outdated urban land ceiling and
regulation act (Ulcra) and reforms in rent control and property tax in urban
areas. The government's slow progress on this front has weakened its case to
press for more funds under the JNNURM.
Estimating the need for over Rs 31,000 crore to strengthen Mumbai's fast
decaying infrastructure, the state wants special consideration under the
Mission.
Although the Centre hailed the state's move to launch the much delayed
Mumbai Metro Rail project last month and assured funding of Rs 500 crore
under the Mission, it is grilling Maharashtra for not being prompt in
abolishing Ulcra. The Centre has short listed the state's sea link project
for viability funding. Maharashtra is one of the few states where Ulcra is
still in place in Mumbai, Thane and Pune. Chief minister Vilasrao Deshmukh
says Ulcra would be phased out after taking the opposition parties into
confidence.
However, critics allege the government has been inactive mainly due to
strong pressure from the builders' lobby. The union minister for urban
development S Jaipal Reddy has attacked the Maharashtra government for
dilly-dallying. He said, "I do not know why the state has a mental block
against the discontinuing an act that is antiquated and has no rationale."
He was supported by petroleum minister Murli Deora, Mumbai's voice in
Parliament for over 25 years.
Deshmukh affirmed his commitment to abolish Ulcra on Wednesday in the state
legislature.
Amending the rent control act is another contentious issue that may hamper
the state's chance to get more funds under the Mission. Opposition parties
and critics claim the government is not arguing its case well enough in
various courts, as it wants to protect the interests of landlords. The
government denies such allegations and argues that it is in the process of
reforming rent control norms for the benefit of city as a whole.
Another issue is reluctance to reform property taxes. Though the state
recently decided to raise the tax in old areas protected by the Maharashtra
Rent Control Act, 1999, the Mumbai municipal corporation controlled by the
Shiv Sena-BJP combine decided not to implement it. The saffron alliance
preferred a populist stance with the civic elections due in 2007.
According to a recent NIPF report, "Though many urban local bodies have
initiated reforms process, these efforts mask significantly underlying
structural problems that limit elasticity and buoyancy of the property tax.
In case of Pune, adoption of rental values would increase revenue yields by
an estimated 55%."
URL: http://www.financialexpress.com/fe_full_story.php?content_id=134983