Pune: A political tug-of-war over property taxes in Pune’s newly merged areas has left Pune Municipal Corporation (PMC) staring at a Rs 2,500-crore revenue hole, raising questions over who will ultimately pay for the city’s expanding infrastructure. While suburban residents continue to resist tax payments citing poor civic services, the mounting burden is increasingly falling on taxpayers within the old city limits.The financial crisis has its roots in an Oct 2024 decision by state govt to halt tax recovery in the 32 merged areas, along with a directive that civic taxes should not exceed twice the rates previously charged by gram panchayats. Politicians, keen to protect suburban vote banks, have strongly opposed tax collection efforts, creating a policy deadlock that has crippled revenue recovery.The issue came up during a meeting convened by Baramati MP and NCP (SP) member Supriya Sule recently. “The administration and state govt had promised to provide tax relief to these areas. It should be continued. PMC is not able to provide adequate facilities for these areas, so charging heavy property tax is not justified,” Sule said.According to PMC officials, the arrears have accumulated over nearly a decade across two phases of municipal expansion. The nine villages merged into PMC limits in 2017 account for around Rs 1,400 crore in unpaid property taxes, while the 23 villages added in 2021 have contributed another Rs 1,100 crore.Of the total outstanding amount, Rs 1,650 crore is the principal tax due, while accumulated interest has swelled the bill by another Rs 850 crore. “The recovery is delayed due to a policy deadlock. State govt has put brakes on the recovery, leading to an increasing tax burden,” a senior PMC official said.The official said PMC had followed due process while introducing property taxes in the merged areas. “Discounted tax rates were levied for nearly five years. As per the law, regular municipal rates were implemented after that period,” the official said.Residents of the merged areas, however, argued that they should not be charged full municipal rates without receiving corresponding civic amenities. “Years have passed since our areas were merged into PMC limits, but civic infrastructure has not improved. We are struggling to get even basic facilities like drinking water,” Shrirang Chavan, a resident of one of the merged localities, said.Consequently, PMC’s revenue projections have taken a major hit. The civic body had estimated property tax collections of Rs 675 crore from the newly merged areas in 2026-27. Of the 4.40 lakh properties spread across the 32 merged areas, however, only 1.10 lakh property owners have cleared their dues voluntarily. The remaining 3.30 lakh property owners have withheld payments, pushing arrears to the current Rs 2,500 crore level.
