Hyderabad: ULBs hike trade licence fee to bridge fund gap

Hyderabad: In the current Corona crisis, a steep hike in trade licence fee has come as a bolt from the blue for lakhs of traders in many municipalities in Telangana.

With the State government giving a free hand to 130 plus municipalities (except GHMC) to increase trade licence fee at their wish, the Urban Local Bodies (ULBs) had started hiking trade fee by 5 to 10 times to meet the growing financial requirements. Some municipalities adopted a resolution to collect trade licence fee more than the existing amount from this year.

The revised trade licence fee structure will have to be approved by the elected General Body in every cash starved municipality. The urban bodies finalise the enhanced licence fee in accordance with the local business conditions and required financial needs on a yearly basis.

The existing trade licence fee structure has been finalized a decade ago and the local bodies are struggling hard to generate revenue and meet the financial requirements at local level.

Under the new Municipal Act, the urban local bodies would have to achieve self sufficiency by creating new revenue generating avenues. After property taxes, collection of trade licence fee is second biggest revenue source, top officials said, adding that some municipalities already adopted a resolution in support of hike in trade licence fee.

For instance, Peddapally municipal body in the recently held general body meeting through a video conference gave its nod to increase the licence fee by 10 times. Some more municipalities in the erstwhile Nalgonda, Khammam, Warangal and Karimnagar districts have also decided to increase the trade licence fee.

"Municipal bodies will not sustain financially with the current fee collection structures unless the government extended financial aid. The government is in favour of promoting the ULBs as autonomous bodies in financial and administrative aspects under the new Act," officials said, adding that the increase of trade licence fee by 10 times is a suggested measure to all financially poor urban bodies from the government.

All the municipal bodies also decided to collect the fee from the traders annually. Those failed to pay the fee in time, will have to cough up 50 per cent on the total fee.

The collection of hefty licence fee by urban bodies was drawing strong opposition from the traders community in the crisis time. Traders say that the business activity has been hit badly after the lockdown was imposed in Telangana. Instead of extending some relief to the trading community to overcome the crisis, the government has been trying to put more financial burden and the traders bore the brunt of the spiked licensed fee.