J&K, Property Tax & Levying Power

Tikender Singh Panwar

The union territory administration of Jammu and Kashmir notified rules for levying property tax in towns and cities in the region. The Lieutenant Governor and the officers of urban development are leaving no stone unturned in convincing the people that this is a ‘progressive tax’, and the values are abysmally low and hence there will be hardly any burden on the people.

Comparative tax collection rates of Shimla, Ambala, Dehradun, etc., are also shared to build a narrative that the people of J&K will be paying very less compared to other urban centres.

The people of J&K and the major political parties, including the Gupkar Alliance, have condemned the decision of the administration saying that it undermines the spirit of the Constitution.

Flawed Process

The outcry is not about paying property tax per se, but rather it’s about the unconstitutional way this has been imposed. This is taking place at a time when there is a much-hyped propaganda that Kashmiris do not pay tax while people in other urban centres across India pay. Nothing can be further from the truth. How is possible that the people of the region were not taxed by successive regimes to run their administrations?

The history of municipal administration in J&K is quite old. The Dogra rulers established municipal governance in both Jammu and Srinagar in 1886. Even before the 74th constitutional amendment came into being in 1994, there were municipal councils established in the region, and in 2003 the J&K legislature made the two municipal councils into corporations. The major source, like in all the urban centers, was from octroi even in the Valley.

The collection of property tax is also quite old. The property tax was levied under the J&K Urban Immovable Property Tax rules of 1962. In 1997, property tax was levied on individual property owners with a minimum rental income of Rs 500 per month. 

Centre Intervenes

Then why is there objections this time? The ire is legitimate, and genuine. As French philosopher Henry Lefebvre points out, it is like reclaiming the right to the city; he says the right to the city “manifests itself as a superior form of rights: the right to freedom, to individualization in socialization, to habitat and to inhabit.” The flaw in the current order is ‘who decides for whom’. There is a violation of the Constitution on two folds. First, urban development is a state subject, and the state is supposed to take a call on the way urbanisation must unfold.

The state governments must and should take into consideration the hard reality of urbanisation and urbanism, and only then build their urban designs and plans.

However, in the recent past, there has been a strong interference from the Centre. Successive Union governments, particularly after 2014, have linked the central flow of money to some basic changes in the structures of urban governance.

Some of them are good. Take, for example, the dual accounting system, which is very much required. But most of the decisions taken at the local level are structured in the process of urban reforms —like the smart city model where the urban governance structure of the council has been taken over by the bureaucrat-driven business models, etc. These are not sustainable ways of urbanizing India.

In J&K, even the liberty of urban planning at the state level has been robbed, and usurped by the Centre. The elected state legislature should take a call on the form in which tax collection is to be made in the urban centres.

Empower Local

The second flaw is the violation of the 74th Constitutional Amendment. The basic spirit of this amendment is that the cities should plan for themselves.

Hence when the Lieutenant Governor or other officers are holding press conferences and saying that the tax collection will be very meagre, it is subjugation of the principles of the 74th amendment.

When the new format of property tax was to be introduced in Shimla while I was the deputy mayor (2012-17), even the state government could not decide how to collect the tax. It was after a long debate within the council and with the people that we deliberated upon the subject. Every value of the property tax was decided by the elected council, i.e., the Shimla Municipal Corporation. No wonder the tax collections surged phenomenally during that time.

This space of elected councils deciding for themselves has also been robbed.

The Right Value

When the J&K Lieutenant Governor says that Shimla collects more per capita tax than Srinagar, it is true. However, the untold fact is that the tax value was not decided by the Chief Minister or the Governor; it was decided by the urban council. In the council, we knew which area and space has a larger capacity to pay, and which should be exempted. It is quite interesting to note that in Shimla even the designated slums are paying property tax. In fact, they were the first ones to demand to levy of property tax — for obvious reasons.

The value of tax imposed is also important because this is linked with the United Nations Sustainable Development Goals (SDGs). What about land use change; likewise, what concession should be given to the green spaces ensuring that the lungs of the city further develop? Likewise, what about the policies towards water bodies, etc.? All of this should be kept in mind and such detailing in planning can only be done when it is highly decentralized and democratized—not when it comes from up above.

In the absence of a process where the ‘people decide for themselves’, the introduction of property tax is seen as another onslaught of the Union government on the democratic rights of the Jammu and Kashmir residents.

The article was first published on the Deccan Herald as J&K | A flawed way to levy tax on March 15, 2023.

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  • Tikender Singh Panwar

    Former Deputy Mayor of Shimla and Visiting Senior Fellow at IMPRI

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