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15th July 2022 (8 Topics)

Municipal Corporation of Delhi (MCD)- uniform tax rates for trade


The Municipal Corporation of Delhi (MCD) has announced uniform rates for general trade and storage licenses for establishments across the city.


  • Revised rates are aimed at curbing “disparities” in the earlier fee rates under three erstwhile municipal corporations.
  • As the Municipal governments rely heavily on property tax revenue to fund their operations and the new license rates are higher in comparison to the rates under the erstwhile municipal corporations.
  • There will be an increase of 15% in the license fee for all categories every three years from the date of implementation, starting from April 1, 2025.


What is a Municipal Corporation?

  • In India, the Municipal Corporation is the urban local government that is responsible for the development of any Metropolitan City having a population of more than one million people.
  • Mahanagar Palika, Nagar Palika, Nagar Nigam, City Corporation, and so on are some of the other names for it.

The Municipal Corporations are established in the states by the acts of the state legislatures, whereas in the Union Territories through the acts of the Parliament.

  • Municipal governments rely heavily on property tax revenue to fund their operations.
  • The first municipal corporation in India was created in Madras in 1688, followed by municipal corporations in Bombay and Calcutta in 1726.

The necessity for the creation of a Municipal Corporation:

  • The growing population and urbanization in India's cities necessitated the establishment of a local governing body.
  • A body is needed for collecting the property taxes and fixed grants from the state government in order to provide essential community services such as health care, education, housing, and transportation.

Constitutional Provisions:

  • In the Constitution of India, no provision was made for the establishment of local self-government, except the incorporation of Article 40 in the Directive Principles of State Policy.
  • The 74th Amendment Act, 1992 has inserted a new Part IX-A into the Constitution which deals with the administration of Municipalities and Nagar Palikas.
  • It consists of Articles 243P to 243ZG. It also added a new twelfth schedule to the Constitution. The 12th Schedule of the Indian Constitution deals with the provisions that specify the powers, authority, and responsibilities of Municipalities. It has 18 matters. Urban planning includes town planning.

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