CHENNAI: Municipal Administration Minister KN Nehru has alleged the annual revision of property tax in the state stems from the AIADMK government’s acceptance of a stringent condition imposed by the 15th Finance Commission.
Nehru was responding to a statement from former Chief Minister Edappadi K Palaniswami condemning the DMK government for its decision to increase property taxes in village panchayats across the state from the financial year 2025-26.
Taking a dig at CM Stalin, Palaniswami said unlike former Chief Minister MG Ramachandran, who offered free electricity to huts, the Stalin-led government has been burdening the rural poor further with steep tax hikes.
Nehru, in his response, said Palaniswami had agreed to link property tax revisions with the Gross State Domestic Product (GSDP) during his tenure, which has now resulted in the present system of annual hikes.
“Out of selfish motives, Palaniswami signed the condition laid down by the finance commission and that decision has led to the current situation,” Nehru said.
He also warned failure to adhere to this condition could result in the Union Government withholding grants worth `4,36,361 crore meant for urban local bodies for the period 2021-26, along with funds under the Swachh Bharat and AMRUT 2.0 schemes.
Palaniswami, in his statement, had said the Stalin-led DMK government has already increased property taxes more than twice in municipalities and municipal corporations since coming to power in 2021. Now, he alleged, the government has extended this burden to rural areas.