With a lot at stake for the Aam Aadmi Party (AAP) in the forthcoming municipal elections in Delhi, the party has promised to waive house tax (or residential property tax) if it gains control of the municipal bodies of the city, likening its campaign promise to its concessions on water and electricity.
However, data suggests that unlike the concessions on water and electricity, which penalise those who consume more, the promise to waive property taxes will end up benefiting the rich at the expense of the poor.
As the name suggests, a house tax exemption will only benefit those who own a house. According to the 2011 census data, almost a third of Delhi’s population will be automatically excluded from any benefits under this scheme. It is to be noted that the percentage of house-owning households in Delhi is much less than the national average of 87%.
Since house tax has a progressive structure (increasing with the size and value of residential property), a blanket exemption will benefit the rich more than the poor. Delhi house owners are a richer lot in comparison to average Indian house owners, and will gain from such a policy. A greater percentage of total households in Delhi (37%) have three or more rooms as compared to the rest of India (27%).
These numbers suggest that Delhi chief minister Arvind Kejriwal’s house tax waiver promise is targeted at placating the propertied class more than the aam aadmi (or ordinary citizen). Also, the consequences of such a promise goes much beyond a reversal in AAP’s class politics as it will damage the already fragile balance sheets of Delhi’s municipal bodies.
