Over 50,000 Commercial Units in Amritsar Operating Without Trade Licences
In the historic city of Amritsar, a significant regulatory gap has emerged, with more than 50,000 commercial establishments operating without valid trade licences. Despite over 70,000 businesses falling under the mandatory licensing system, only approximately 14,000 have obtained the necessary permits from the Amritsar Municipal Corporation. This widespread non-compliance poses a serious challenge to municipal governance and revenue collection in this major commercial hub of the region.
Revenue Implications and Enforcement Challenges
The trade licence system serves as a crucial revenue stream for the municipal corporation, yet lax enforcement has led to a substantial shortfall. Officials report that while income from the trade licence department increased by about Rs 25 lakh compared to the previous year, this rise is primarily attributed to the recovery of pending dues rather than new registrations. The municipal corporation had set an ambitious revenue target of Rs 3.75 crore for the current year from trade licences, a goal now jeopardised by the low compliance rate.
Staff shortages are a key factor behind the slow pace of new registrations. With only three inspectors who also handle other responsibilities, one clerk, and no dedicated recovery staff, the department is severely under-resourced. Officials estimate that at least five inspectors and five clerks are required for efficient operations. This manpower deficit has crippled field visits aimed at identifying and registering new businesses, allowing many traders to avoid obtaining licences without fear of penalty.
Fee Structure and Penalty Provisions
The municipal corporation has established a clear fee structure for trade licences, setting the licence fee at Rs 500 along with an annual conservancy charge of Rs 300. To encourage timely renewals, penalties have been instituted: a 25 per cent penalty will be imposed from May 1 for unrenewed licences, while conservancy charges not deposited will attract a 10 per cent penalty from April to September and 20 per cent thereafter. However, without effective enforcement, these measures have had limited impact on compliance.
Historical Context and Digital Initiatives
Ironically, around two decades ago, the municipal corporation had nearly 25,000 registered trade licences, indicating a higher level of compliance in the past. In recent years, the MC initiated a door-to-door Geographic Information System (GIS) survey intended to digitise mapping, enhance tax collection, and assess urban infrastructure. However, this exercise remains incomplete, further hampering efforts to streamline licensing and revenue recovery.
Former councillor Gurpreet Singh has proposed practical solutions to address the issue. He suggests that the municipal corporation should deploy teams to markets not only to facilitate trade licence registrations but also to recover pending dues. "Teams equipped with Point of Sale (POS) machines can visit commercial units and carry out on-the-spot recovery," he added, emphasising the need for proactive field operations to bridge the compliance gap.
The situation in Amritsar highlights broader challenges in municipal governance, where regulatory frameworks are undermined by inadequate resources and enforcement. As the city continues to grow as a commercial centre, addressing these issues will be essential for ensuring sustainable revenue and regulatory compliance.
