Mumbai: BMC plans to levy property tax on commercial slums

Commercial establishments in Bharat Nagar slum. Pic/Nimesh Dave

The Brihanmumbai Municipal Corporation (BMC) has initiated a survey of commercial slums and plans to start collecting property tax from the next financial year. After waiving property tax on residential properties up to 500 square feet, the civic body has been losing around R300 crore in revenue annually. Meanwhile, it has launched various mega projects worth approximately Rs 1.5 lakh crore. To fund these projects, the BMC is now exploring new revenue sources, including collecting property tax from commercial slums.

Until 2006-07, the BMC charged Rs 100 annually as a service fee for residential slum structures and Rs 250 for commercial ones. In 2016, it revised these charges to a range of Rs 2,400 to Rs 18,000 annually, depending on the area and type of hut. At that time, then-BMC Commissioner Ajoy Mehta proposed levying property taxes on slum properties in the budget. However, in 2018, the BMC abolished property tax for residential properties up to 500 square feet, putting the collection of property tax from slums on hold. Now, the BMC has decided to resume this tax collection for commercial slums.

The survey of commercial slums is currently underway. Deputy Municipal Commissioner Vishwas Shankarwar said, "Yes, we have started a survey of the commercial slums for property tax. After the survey, we will know how many commercial slums are in the city." Another official explained that the property tax will be calculated based on the size and ready reckoner rate of the area. The BMC estimates that this tax could generate around Rs 200 crore in revenue.

As of December 2024, the BMC has collected Rs 5,847.68 crore in property tax, achieving 68 per cent of its target for the financial year. The collection target for 2024-25 is approximately Rs 6,200 crore. Notably, the BMC collected Rs 433.87 crore in just two days - Rs 173.59 crore on Monday, December 30, 2024, and Rs 260.28 crore on Tuesday, December 31, 2024.

However, the decision to tax commercial slums has drawn criticism from stakeholders. Sureshchandra Rajhans, president of the Congress Slum Cell in Mumbai, said, "At the moment, not much is known about this proposal. However, this decision will be unfair to a slum dweller who runs a small shop in his house. It is wrong to compare a shop being run in a slum house with one being operated in a building."