The Greater Hyderabad Municipal Corporation (GHMC) is poised to receive partial financial relief while simultaneously facing a significant revenue setback following the state government's latest decision on pending property tax dues from government departments. Government buildings across various departments had accumulated nearly Rs 6,000 crore in pending property taxes and interest arrears over the decades. Of this total, the principal property tax dues are estimated at around Rs 1,700 crore, while accumulated interest arrears have surged to nearly Rs 4,300 crore.
One-Time Settlement Scheme Details
As part of a One-Time Settlement (OTS) scheme, the state government has implemented a 90% waiver on the accumulated interest arrears, effectively writing off more than Rs 4,000 crore owed to GHMC. However, the state government will bear the burden of clearing the pending principal property tax dues owed by several departments. Around 50 departments have not cleared their taxes for years.
Major Defaulters
Some of the major defaulters in GHMC include the Telangana secretariat, roads & buildings department, revenue department, health & medical department, prohibition and excise department, and the south central railway. Surprisingly, the outstanding dues from the secretariat have remained unsettled since 2001, dating back to the united Andhra Pradesh period, while the R&B department has not cleared its dues since 2009.
Impact on GHMC's Financial Health
The decision comes shortly after the state government announced plans to clear GHMC debts amounting to around Rs 5,000 crore, a move expected to help the civic body become debt-free after many years. While the debt clearance is likely to strengthen GHMC's financial position, the waiver of massive interest arrears from government buildings could result in significant revenue loss to the corporation.
Official Statement
Officials said that the latest move is aimed at improving GHMC's fiscal health while resolving long-pending dues involving government departments. “The main objective is to clean up the financial balance sheet of the corporations. The borrowings and pending dues have been reflecting negatively in the financial records for years. To address this, the state government has decided to clear outstanding liabilities and make the corporations free from dues and debts,” said a senior official in the Municipal Administration and Urban Development (MAUD) department.
