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Kerala Kaumudi Online
Wednesday, 12 May 2021 11.26 PM IST

Increase in water tax without anybody’s knowledge?

water

Only this too was left be done. An order from the centre of administration said that the people should be prepared to pay more for drinking water. Interestingly, the order was issued without the knowledge of the Minister of Water Resources or the head of the Water Authority in charge of water supply. The Additional Chief Secretary of the Water Resources Department himself has issued the order, perhaps because the rein of the government is coming to an end.
However, if anyone asks whether this isn’t something that the Minister and the Water Authority MD need to know, there is an answer. The minister assures that the water tariff would not be increased immediately. This is a ploy to hoodwink the Centre. The state government has to take loans to find more money for development activities and so on. If the loan is to be taken surpassing the existing limit, it will require sources to generate revenue commensurate to the loan amount. Only after convincing the Centre and the Reserve Bank will the credit limit be raised. Not only water tax hike but also taxes will have to be increased in many areas. Part of this is the huge increase in building taxes. If, till date, only the area and facilities of the building were the criteria for tax assessment, the tax assessment will be based on the fair price fixed by the government for the land on which the building stands. The Center has also proposed reforms related to rations, power supply and subsidies.

Minister of State for Home Affairs K Krishnan has said that the water tariff will not be increased immediately. According to Krishnankutty, the order issued by the secretariat, however, indicates that it will not be delayed for long. The order says the hike will take effect from April 1, the start of the financial year.
The minister has mentioned it vaguely, perhaps because he is in the middle of an election. He reassures that the water charged will not be hiked without a formal decision by the cabinet. We need to know how many more days it will take. The order proposes to increase the water tax by five per cent every year. The Water Authority was set up to make the supply of drinking water more efficient and to provide clean water to more households. Even in areas where fresh water was available at low rates, there has been an experience of water scarcity since the Authority came into existence. The water charge doubled many times in two decades. There is widespread criticism that efficiency is declining significantly.

The tax and water levy will be increased to create an environment for the state government to borrow more than Rs 18,000 crore.

The Center is also allowing the states to take additional loans only because create conditions for it to cope with the Covid situation. The State has already implemented many of the conditions laid down for this. The ration system has already been made flawless. Procedures for starting new industries have also been liberalized. Many of the proposed reforms in the power sector are yet to be implemented. In addition to this, there are measures to increase water tax and property tax. These are things that should be done with caution as they directly affect all sections of the people. The recommended criteria for determining the building tax cannot be said to be scientific. There is no doubt that instead of levying tax on the type of building, it is fraught with a number of inaccuracies in determining the rate based on the fair value of the land on which it stands.

Another important point is the need for intensive effort to collect tax arrears in bulk instead of frequent rate hikes. Take the case of the Water Authority itself. How many crores can be collected by it takes the efforts to collect arreas. Big business and government departments are in the forefront among the debtors. The same is true in the case of electricity arrears. Are there any government departments that pay building tax? The income for the government from effective collection of arrears will be much higher than the additional revenue generated by the tax increase.

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