Ahmedabad residents may have to bear extra tax burden

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AMC commissioner Vijay Nehra presents the draft budget in Ahmedabad on Friday. (Express photo)

Nearly 60 lakh residents of Ahmedabad city will have an additional tax burden of Rs 244 crore in the financial year 2020-21, with the capital expenditure of the Ahmedabad Municipal Corporation (AMC) going up by 2.5 times.

The AMC’s draft budget of Rs 8,907 crore for financial year 2020-21 presented by municipal commissioner Vijay Nehra on Friday aims to increase city’s per capita budget from the existing Rs 10,724 to nearly Rs 12,000. Elections to the municipal corporations are due in the end of this calendar year, which makes the budget significant.

The draft budget on the lines of cities like Pune, Mumbai, Bangalore and Surat, on the theme, ‘New Amdavad for New India’, stresses on green mobility, renewable energy and affordable services, including health, education, housing, drinking water and night shelter.

Affecting high-end owners of properties and vehicles, the AMC has proposed an increase in property tax rates between Rs 300 and Rs 6,600. For instance, for residential units in pol or gamtal areas will face an increase of Rs 300, which goes up to Rs 500-700, Rs 600-700 for a flat (70 sq mt) and Rs 4000-6600 for a bungalow (100 sq mt), depending on the location.

If approved by the elected wing led by the BJP, to be increased after a period of six years, this will include the base rate of residential property that has been proposed to be increased Rs 16 to Rs 22, while for commercial properties the proposal is Rs 28 to Rs 34.

In addition to the base rate, which is a multiplying factor per sq mt, the property tax is calculated on the basis of four factors-location (based on jantri rates), age of the property, type of use and self use or tenant.

With an estimated total 21 lakh property units — 16 lakh residential and 5 lakh commercial property units — in the city, which includes 5,000 bungalows and 2,000 residential societies, these are expected to generate an additional income of Rs 40 crore and Rs 178 crore for residential and non-residential properties, respectively.

Another major provision in the draft budget to bring city’s per capita budget at par with other cities includes an increase of Rs 3,000 crore for development projects, against last five-year trend of a capital expenditure of nearly Rs 2,000 crore. In 2019-20, the estimated capital expenditure was Rs 2,400 crore, while it is Rs 5,014 crore in 2020-21.

While most of this additional Rs 3,000 crore will be sourced from state and central grants under different development projects, a part of it is to be done through taxes — property tax (Rs 218 cr non-residential and Rs 40 crore residential) and Rs 26 crore from increased rates of vehicle tax. Even for the “grant and other sources” of Rs 2,756 crore from state and Centre, the AMC has to raise its own funds for development projects.

“At a per capita budget of nearly Rs 10,000, we are underspending because we are collecting less... After brainstorming, it has been proposed to put no burden on the poor but only on those who can afford,” Vijay Nehra said in a media briefing after the draft budget was tabled before the standing committee on Friday.

For vehicles, the draft budget has proposed no hike on two-wheelers, which is used by over 70 per cent of the city’s population. Stress is curbing the number of autorickshaws and high-end vehicles that lead to traffic and air pollution.

For instance, the incentive given to autorickshaws has been brought at par with two-wheelers. “This has been proposed keeping in mind the Gujarat High Court directives of putting a check on the burgeoning number of autorickshaws as well as Gujarat government’s committee suggestions,” said Nehra.

For vehicles below Rs 15 lakh, a marginal hike has been proposed while for vehicles above it the existing 2.25 per cent vehicle tax has been increased to 3 per

“One of the biggest infrastructure development scheme to be floated by any city is the Smart Society Scheme. Based on five parameters of sustainable development, societies fulfilling all five would be given a 100 per cent exemption from property tax. An exemption of this extent has never been offered anywhere,” added Nehra.

The five parameters include sold waste management, energy conservation and renewable energy, water conservation and rain water harvesting and environment protection. Societies fulfilling all the five will be awarded five stars and complete exemption in property tax followed by 50 per cent exemption against four stars, 25 per cent against three stars.

AMC draft budget highlights

Focusing On Roads

The AMC in October 2019, came under heat at the Gujarat High Court owing to a contempt petition filed for “little or no compliance” with regard to the directives issued earlier over a public interest litigation (PIL) on the condition of roads. The city's roads had deteriorated in the aftermath of heavy monsoon downpour this year. This year, when the urban local body goes to polls, the draft budget has dedicated Rs 700 crore towards road modernisation.

This includes an estimated 11.20 km of pavement quality concrete or cement concrete roads, and microsurfacing over an estimated area of 3.30 lakh sqkm (square kilometre), in the financial year 2020-’21. In the ongoing financial year, AMC claims to have done road patchwork over an area of nearly 52,800 square metre using jetpatcher and infrared technology.

Focusing On Pedestrians

In the current financial year, Rs 36.94 crore has been spent on redesigning and redeveloping the CG Road, which saw a wider pavement equipped with seating area in a bid to encourage pedestrians. Alhough no specific amount has been mentioned yet, the draft budget, however, lays down that in each of the remaining six zones under AMC, a similarly designed pedestrian-friendly road is planned.

Deputy Municipal Commissioner RK Mehta said that the underlying principle is to make it pedestrian-friendly, built at AMC's cost and with AMC's ownership. The construction work shall be awarded on a tender-basis, according to Mehta.


While the onging financial year saw the inauguration of two flyover bridges, both by the Union Home Minister Amit Shah, and three other flyover bridges under construction, for the financial year 2020-’21, the AMC has grown ambitious manifold, aiming for 20 flyover bridges at an estimated cost of Rs 968 crore.

Another Rs 152 crore of expenditure has been proposed for 15 rail over bridge and under bridge

For Every Ward...

For an election year, especially when three new areas - Bopal, Ghuma and Shela – are expected to be integrated within AMC limits before the city goes to polls, the draft budget proposed seven elements for all the 64 wards as of now. These include a swimming pool, a mini-sports complex, an air-conditioned gymnasium, an air-conditioned reading room, a vegetable market, an outdoor gym attached with a 'model garden' and a health & wellness centre.

Sports, A Priority

Apart from setting up sporting elements chalked out for every ward (swimming pool, indoor and outdoor gymnasiums and mini sport complex), the draft budget also proposed a formation of an 'Ahmedabad Sports Promotion Company' in a 50-50 partnership of AMC and the state government.

For the ongoing financial year, the AMC stated that construction of eight tennis courts have already been completed while 12 others are under construction.