Coimbatore corporation goes belly up- time to pull up its socks on fiscal discipline

Coimbatore: The city corporation's fiscal deficit appears to rise with every passing year, increasing the burden on the civic body. However, there are enough avenues to improve the civic body's fiscal health. What is lacking, though, is a strategy and the required efforts on the part of the corporation to mop up revenue from the sources available.
To start with, the civic body shall come up with a time-bound plan to collect property tax arrears. Though the civic body has achieved much of the property tax demand meant for 2024- 25, there seems to be a lag in collecting pending arrears from previous years.
For the FY 2024-25, the corporation had collected only 33% of the property tax arrears. The arrear balance itself accounted for Rs 82.63 crore which is more than half of the annual deficit of the corporation.
In the past, making the defaulters list public had helped the corporation collect the arrears. But this year, the corporation has not disclosed the list.
The next avenue where the civic body could add several crores to its kitty is the vacant land tax. Only Rs 38 crore has been collected in 2024-25 though the total pending including the arrears accounts for about Rs 300 crore. Though the vacant land tax would be collected when a land is being developed for a project, the civic body could also collect them bi-annually.
Also, when the land lays vacant for several years, the tax could not be collected for all those years, pointed out an officer. "The maximum limit of tax levied for vacant land is for 13 half yearly assessment periods only,'' he said.
"In many cases, tracking the addresses and contact of vacant land owners is also difficult, making collection of tax an uphill task," he said.
Former councillor K Purushothaman pointed out that trade license, professional tax and track rent are the other three areas where the corporation could increase its revenue. "An approximate 2,80,000 commercial assessments are recorded under the corporation for which trade licence fee can be collected. Even if they impose a minimum of Rs 1,000 on each assessment, the total revenue comes to about Rs 28 crore,'' he said.
The track rent is collected for every kilometre of road occupied for the broadband cable. According to the norms, the present annual tariff for every kilometre is nearly Rs 6,200. The corporation's road stretch is more than 8,000 kilometres and every household has broadband. "Many telecommunication companies aren't paying this amount. Nowhere does the budget mention about this track rent," he said.
Consumer activist K Kathirmathiyon said the corporation's tax collection is limited to only the middle class. "Many large establishments have a lot of pending dues. The defaulters should be revealed. Also, the professional tax slabs should be revised,'' he said.
Acknowledging the fact that the city corporation lacks a refined revenue management plan, D Ramesh, AIADMK councillor of ward 90 said that the civic authorities focus only on property tax while neglecting other sources. "They are keen only to hike property tax, further burdening the middle class,'' he said.
A senior corporation officer stated that the civic body has been discussing various steps to increase the revenue generation and coming up with a strategic plan for the current FY 2025-26.
"The financial year has just ended. We are working on plans to mop up revenue in the new fiscal,'' the officer said.