People's Democracy

(Weekly Organ of the Communist Party of India (Marxist)


No. 37

September 11, 2011



Neo-Liberalism Now Attacks People’s Dwellings


IF one goes through the guidelines of running the urban bodies as transcribed in the Jawaharlal Nehru National Urban Renewal Mission (JNNURM) or the 13th Finance Commission, among others, one could easily smell the odour of neo-liberalism therein.  These bodies lay stress on the generation of resources from the people and ensuring that no service by the urban municipal bodies is rendered loss-making. Such services include sanitation, healthcare, water supply, sewerage, maintenance of roads, street lights etc. User charge is the buzz word in case of all such services now.


Secondly, outsourcing of services to private parties is another novel way of launching blatant attacks on the people’s right to these services. Would one believe that in a small town of Shimla, with a population of over 1.5 lakhs, mere outsourcing of the municipal toilets to the Sulabh International generates an income of over Rs 2 lakh everyday? In other words, the residents of the town and the tourists thronging the erstwhile summer capital of the country have to pay an amount for pissing and defecation.


Yet another form of user charge has been the collection of garbage at the doorsteps. The charges levied are Rs 35, 50, 200 and Rs 800 per month for collection of garbage from residential houses, shops, commercial establishments, and hotels and restaurants respectively.   


Of late, yet another major attack has come in the form of privatisation of water supply. Everything is being privatised or outsourced --- from the lifting of water to its distribution.




But the buck does not stop here. The master of all attacks comes in the form of a change in the method of taxation in Shimla town. Now the house owners are being taxed not on the basis of the rent collected but on the basis of unit area, irrespective of whether the property they own is for personal or for commercial use.  


In its budget session in March 2011, the Himachal Pradesh Vidhan Sabha amended, in fact altogether changed, the previous HP Municipal Corporation Act and the HP Urban Bodies Act (Bill No 10 & 12 of 2011). Recently, in August, the governor too gave her assent to the bill and the act will soon become operational. As it is, this act too amounts to a severe neo-liberal attack on the common people. The aims and objectives of the act speak for themselves. It states that the urban bodies must generate their own resources and it is only then that these bodies would get a matching grant under the guidelines of the JNNURM and the 13th Finance Commission. Though the JNNURM is to come to an end by 2012, it may continue in a metamorphosed form and dominate the broad guidelines of governance and administration of the urban bodies.


Take the case of the Shimla Municipal Corporation. It has an annual expenditure of over Rs 50 crore and its resource generation is almost Rs 30 crore. Thus, for the rest Rs 20 crore, it is dependent on the state government. But now the state assembly has passed an act that coerces the corporation and other municipal bodies to raise their tax limits and thus put burdens on the common man. The alternatives as suggested by various forums --- for example of taxing the rich, especially those who pay a rent of over Rs 25 lakh per month for shops in the mall --- have all fallen on deaf ears. Instead, both the MC and the state government have decided to force the people to pay this additional amount in the form of various taxes, which include user charges, property tax and so on.




It was in such a background that the Shimla Nagrik Sabha, a broad organisation of the people of Shimla town, was formed in a militant convention held in Kali Bari Hall and attended by over 500 people. The membership of the organisation will be open to all the citizens of the town who have attained the age of 16 years. At present, a membership campaign is going on. The convention issued a call for mobilisation in front of the Vidhan Sabha on August 29, demanding the repeal of the abovementioned act and stopping the rampant drive of privatisation of basic services in Shimla town.


On August 29, the protesters gathered at the Panchayat Bhavan before the gherao of the state assembly started. Then they came out for a march through the Cart Road, with participation of a large number of people from different walks of life. Senior citizens, youth, college going students, working people, middle class employees, women, Meera Sharma and Dhani Ram Kashyap (councillors of the Municipal Corporation), former councillor Rajeev Thakur, members of different social and cultural organisations et al participated in the action. The rallyists then laid a siege of the Vidhan Sabha and condemned the assembly for passing laws against the will of the majority of people of the town. 


The main speakers included Kuldeep Singh Tanwar, Sanjay Chauhan, Meera Sharma, Rajeev Thakur, Vivek Kashyap, Falma Chauhan and Tikender Singh Panwar. The speakers condemned the government for passing such a draconian law that will impose tremendous burdens on the residents of Shimla town. They said that the government’s claim that a handover of the basic services to the private sector would improve the quality of these services is quite contrary to the experiences in different urban centres, in the county as well as in the world. The speakers further lambasted the government for making structural changes and outsourcing almost every service in the urban bodies. That the amendments to the act very amply demonstrate and substantiate the fears expressed, was the unanimous voice of the speakers.


It needs to be mentioned here that both the BJP and the Congress were at one in passing this law. No member either from the party in power or from the opposition spoke against the draconian provisions of the bill when it was placed for discussion during the budget session.




The act speaks of the changes in the pattern of generating tax in urban centres. The following are the main provisions of the act after the recent amendments.


1) The basis of tax collection has been changed from the rent collected to the unit area. The unit area will be calculated on the basis of the plinth area and the cost at the time of calculation. After evaluating the value of the structure for a year, a tax equal to 1 to 25 per cent can be levied on a houseowner irrespective of whether the house is in his personal use or in commercial use. Further, the earlier provision of a relaxation of 100 square metres in case of personal use has been set aside and now every occupant will be coerced to pay a tax that, on all accounts, shall be too exorbitant for the people staying either in Shimla or in other urban centres of the state. Another new provision is that Shimla town will be divided into various zones and tax per unit will be calculated for each zone. To compound the miseries of the houseowners further, the act speaks of 5 variables to be added in the calculation of tax. These are (i) location, (ii) occupancy, (iii) age of the building, (iv) use of the building, and (v) the type of structure.


2) Another amendment speaks of levying user charges from the people. These will be in the form of more charges on water, sanitation, sewerage etc.


3) The act also gives a green signal to the privatisation of various essential services that will ultimately mean more burdens on the common man and outsourcing of the MC services.


One of the major demands that were raised during the demonstration in front of the state assembly was that the government must immediately repeal the said act and that rent must be the basis of tax collection. Further, stress should be for a one-time settlement of the houses that have been constructed but not regularised, especially in the case of the houses which were constructed prior to the merger of their areas in the Municipal Corporation. The houses should be regularised on the as-it-is-where-it-is basis. The dharas too should be regularised on the similar pattern. Since the merged areas lack even the minimum basic facilities like sewage, roads, street lights, water supply and so on, these areas should be developed and in the meantime should be kept out of the limits of Shimla Municipal Corporation.