In a significant move for Delhi's residents and businesses, the Municipal Corporation of Delhi (MCD) has proposed its budget for the upcoming financial year without increasing any existing tax burdens. MCD Commissioner Ashwani Kumar, on Friday, presented budget estimates worth Rs 16,531 crore for the fiscal year 2026-27, marking the third consecutive year with no hike in property tax rates and no introduction of new taxes.
Revenue Growth and Taxpayer Base Expansion
The civic body's financial health appears robust, backed by a substantial increase in its taxpayer base and tax collections. The corporation reported a 19.8% rise in the number of property taxpayers until September, compared to the previous year, successfully crossing the significant milestone of 12 lakh taxpayers. This expansion translated directly into higher revenue, with property tax collection witnessing a remarkable 30% jump. The agency collected Rs 2,270 crore from property tax until September, a significant increase from Rs 1,589 crore collected in the same period last year.
Commissioner Kumar credited a major part of this growth to a one-time property tax amnesty scheme launched on June 1. This initiative offered rebates on outstanding dues from the last five years and current tax across categories. The scheme garnered Rs 600 crore and benefited nearly 1.4 lakh taxpayers. By December 4, the total revenue collection had reached Rs 2,410 crore, with the civic body projecting a final tally of around Rs 2,800 crore for the year.
Key Reforms and Ease of Doing Business
A cornerstone of the proposed budget is a continued push for administrative and financial reforms aimed at simplifying processes. A key proposal is the abolition of separate health trade licences for establishments like hotels and restaurants. As part of its ease-of-doing-business initiative, the MCD is working to subsume these health trade licences with property tax, a model it previously successfully implemented by merging factory and general trade licences.
To further augment income, the corporation plans to leverage technology and existing data. The focus will be on increasing property tax revenue through geo-tagging and utilizing records from power distribution companies (discoms). Additionally, the MCD aims to boost revenue streams from advertisements and licenses.
Infrastructure and Pollution Control Initiatives
The budget outlines several concrete plans for city development and environmental management. On the infrastructure front, the MCD has set an ambitious target of constructing 600 km of roads by March 2026, utilizing funds from various government schemes. It is also progressing with plans to construct 20 multi-level parking facilities and redevelop properties at prominent locations like Minto Road.
To tackle the persistent issue of dust pollution, the corporation is procuring 60 mechanical road sweepers and 60 litter pickers for internal roads narrower than 60 feet. In waste management, efforts are directed at enhancing processing capacity at the Okhla, Ghazipur, Tehkhand, and Bawana waste-to-energy plants. For animal welfare, the plan includes developing new shelter homes for stray dogs at Bijwasan and Bela Road, following the completion of the first such facility in Dwarka.
Fiscal Realism and Outstanding Liabilities
In a shift towards more realistic projections, the proposed budget of Rs 16,531 crore is nearly Rs 500 crore lower than the estimates of the last budget. Officials clarified that this reduction reflects a conscious move to set achievable revenue targets. For instance, the earlier ambitious target for property tax income of Rs 4,000 crore has been revised downwards, along with the revenue goal from conversion charges.
Commissioner Kumar also presented a candid picture of the civic agency's fiscal stress. The MCD's total liabilities stand at a staggering Rs 15,792 crore. This includes Rs 7,009 crore towards employee benefits and pending dues from the sixth and seventh pay commissions. Furthermore, contractor payments amount to Rs 520 crore, and the corporation carries an outstanding loan burden of Rs 8,262 crore.
In a tech-driven enforcement move, the MCD, in collaboration with the Delhi Development Authority and the Survey of India, has completed a drone survey covering 1,000 square km. This exercise aims to identify illegal constructions, remove unauthorized extensions, and improve house tax collection. Efforts are currently underway to obtain detailed 3D data from this extensive survey.
