Pune Municipal Corporation (PMC) finds itself grappling with a significant fiscal challenge as it endeavours to address the lingering issue of equitable GST revenue allocation, particularly concerning the inclusion of 34 villages within its jurisdiction.
Seven years since the integration of these villages into the PMC, the municipal body remains devoid of its entitled share of GST income generated within these areas, thereby impeding its ability to undertake comprehensive development initiatives. Despite the substantial development works undertaken annually by the PMC, amounting to approximately Rs 2000 crore, the municipal corporation is compelled to remit a considerable portion of its revenue, totalling around Rs 380 crore, as GST and other taxes to the government treasury. This substantial GST contribution directly impacts the PMC’s revenue stream, consequently constraining its capacity to fulfil its developmental objectives effectively.
The implementation of GST in 2017 ushered in a new tax regime aimed at streamlining taxation processes and curbing tax evasion. However, the subsequent imposition of GST on essential commodities and consumer goods has precipitated inflationary pressures, adversely affecting the common citizen. Moreover, the abolition of the Local Body Tax (LBT) led to the reallocation of GST income to municipal corporations, ostensibly to facilitate local development endeavours. Despite the infusion of GST income from the state government, totalling approximately Rs 2.5 thousand crore for the PMC, the municipal budget, which stands at Rs 10,000 crore, continues to face a deficit. With revenue generation pegged at around Rs 7,000 crore, after accounting for expenses and tax obligations, the PMC is left with a meagre sum of Rs 2000 crore for developmental projects.
The unresolved issue of GST revenue sharing from the newly integrated villages exacerbates the PMC’s financial woes, accentuating the disparity between revenue inflow and developmental outlay. Consequently, municipal officials are actively engaging with the state government to address this disparity and secure the rightful allocation of GST income, thereby bolstering Pune’s developmental trajectory and ensuring equitable urban growth.
