Pune Municipal Corporation Struggles With Financial Burden From Newly Added Villages: Here’s Why
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The inclusion of 32 villages into the Pune Municipal Corporation (PMC) limits, a decision made by the state government, was expected to boost the corporation’s revenue through property taxes and development permissions. However, the move has placed a significant financial strain on the PMC due to restrictions imposed by the state.
The PMC relies heavily on property tax, building permissions, and water charges as major sources of income. For the fiscal year, the property tax department was tasked with collecting ₹2,700–₹2,800 crore out of the ₹9,000-crore budget. However, the state government’s decision to suspend property tax collection from the newly added villages has disrupted these plans.
Following their inclusion, these villages required infrastructure development, including roads, water supply, waste management, sewage systems, and public amenities like parks and health centers. To meet these needs, PMC allocated substantial funds, but the anticipated revenue from these villages has yet to materialize.
Adding to the complications, just a day before the state assembly elections code of conduct came into effect, the MahaYuti government led by then-Chief Minister Eknath Shinde issued a stay on property tax collection from the 32 villages. Consequently, PMC’s projected income from these areas has been significantly affected. While the corporation has managed to cross the ₹1,500-crore revenue mark from property taxes overall, the restrictions have hindered further growth.
Further, the state government decided to exclude Uruli Devachi and Fursungi villages from PMC limits and establish them as separate municipal councils. Until these councils are functional, PMC remains responsible for providing essential services in these areas. To oversee their development, a committee chaired by the Divisional Commissioner has been set up, with a report to be submitted to the state government.
Newly merged villages such as Undri, Pisoli, Keshav Nagar, Wagholi and many others are still facing absence of basic infrastructure but the Pune Municipal Corporation has been collecting property taxes diligently.
The suspension of property tax collection isn’t the only issue. The PMC has also been stripped of its authority to grant building permissions in these villages. This has not only led to a lack of control over new developments but also deprived PMC of an important revenue stream. Currently, the PMC is owed ₹1,200 crore in pending dues from nine of these villages. From Uruli Devachi and Fursungi alone, the expected revenue was around ₹250–₹300 crore, but this remains unrealized due to the state government’s directives.
The dual blow of losing revenue from property taxes and building permissions, coupled with the responsibility of funding infrastructure in these villages, has left PMC in a challenging financial position. While expenses in these areas run into crores, the absence of corresponding income has further strained the civic body’s finances.
With the MahaYuti government now back in power, there is growing hope that a positive decision will be made regarding the reinstatement of property tax collection and development permissions, alleviating PMC’s financial burden.
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