30 Years on, No Change in Civic Bodies' Rent

UT municipalities lose out on revenue as lease agreements of 80s yet to be renewed.

Published: 24th July 2015 04:37 AM  |   Last Updated: 24th July 2015 04:37 AM   |  A+A-

PUDUCHERRY: At a time when municipalities in the UT are finding it difficult to pay salaries of its employees from their own resources and the government having to chip in with grants, municipalities are failing to collect proper revenue from their assets.

Municipalities continue to charge nominal rent for the marriage halls, buildings and shops it has leased out decades back in 1983-84. Over the years there has been hardly any effort on the part of the municipalities to renew the lease agreement entered some time in 1983-84 as per the guideline rates (GLR) of land at that time and revise the lease amount by enhancing it periodically. Moreover, even that meagre rent has gone uncollected in some cases, leading to a piling up of arrears. Pondicherry Municipality has rented out 564 shops in the main shopping area comprising Nehru Street, MG Road and other areas who pay a very nominal rent of around Rs 750 to Rs 1,300 as per the rent fixed in 1983-84, whereas private owners are charging several thousands of rupees. Out of the 91 shops in Nehru street alone, only three shops pay a rental of around  Rs 3,000, Rs 2,200 and Rs 1,500. Despite the meagre rent there are pending arrears from these shops. A similar scenario prevails for shops near the new bus stand leased out in 1986 and new bus stand annexe in 1994. Except for one shop -- Karthik Hotel -- pays a rent of around Rs 36,000, the other shops pay below Rs 1,300. Even for two petrol bunks in the main town area the lease amount is Rs 3.64 lakh and Rs 9 lakh annually.

As per the provisions of the rules, the municipalities have been raising the rentals by 10 per cent once in three years, said municipal authorities. However, that is meagre considering the fact that the lease amount was fixed in the 80s and 90s and raising it by 10 per cent, once in three years is nowhere near the actual value. Understanding this the  municipalities have attempted to raise rental through mutual cooperation with the lessee, but have not been successful as they have been reluctant to raise it in accordance with the prevailing rates taking the GLR into consideration. “We have moved a proposal to the government for renewing the lease agreement by fixing the rent as per the present GLR value of land and  the proposal is under consideration of the government,” Local Administration Director Rudra Goud said.

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