Backlash as MCD hikes trade licence fee by 15%

The Municipal Corporation of Delhi (MCD) has raised the trade licence fee across all categories by 15%, officials said on Thursday, a move that has triggered strong backlash from traders across the city.

The hike comes on the heels of a controversial decision to impose a garbage user fee on both residential and commercial properties for waste collection — another move that has drawn criticism from residents and business owners, who cite poor sanitation services and mounting financial strain.

Municipal officials defended the hike, saying it aligns with policy changes introduced after the 2022 unification of the erstwhile north, south, and east Delhi municipal corporations.

The revised licence rates apply across sectors including health trade, general trade (vegetables, fruits, cloth, etc.), and storage (warehouses, godowns).

“Consequent to the approval of special officer exercising the powers of corporation vide decision dated June 6, 2022 regarding revision of health trade licences including revision of annual license fee with 15% increase, the competent authority has consented to implement the increase of health trade license fee @15% of the existing fee for all the health trades applicable from April 1, 2025,” the order undersigned by Municipal Health Officer (MHO) states.

Health trade licences are issued to businesses such as hotels, restaurants, coffee shops, sweet shops, kiosks selling food, and five-star hotels.

An official from MCD’s licensing department said the revised rates would also apply to general trade and storage licences for showrooms, warehouses, cold storage units and other similar establishments. “These fee structures had not been revised in over a decade because the proposals were always blocked in the House. We have now taken a cue from NDMC’s policy that allows automatic increases every three years,” the official said, requesting anonymity.

The hike has sparked outrage among trader associations, who termed the move “unjustified” and burdensome amid an ongoing economic slump.

“A 15% hike in trade licence fees and imposition of ₹5,000 solid waste management charges is unjustified. It is yet another major blow to small traders who are already struggling due to inflation and economic slowdown. Now, a small shopkeeper running a 15-square-meter shop will have to pay approximately ₹8,900 as an annual trade licence fee. In addition to this, a mandatory solid waste charge of ₹5,000 has been added to the commercial property tax,” said Nitin Gupta, president, Kamla Nagar Traders Association, adding that the hike is another burden on taxpayers.

Gupta also pointed to other levies traders must bear. “MCD charges hefty fees for signage boards. Add to this the conversion charges and parking development fees that run into lakhs of rupees. What do we get in return? Broken roads, damaged footpaths, clogged drains, and rampant encroachments,” he said.

Brijesh Goyal, chairperson of the Chamber of Trade and Industry (CTI), blamed the ongoing political feud between AAP and BJP for the financial pressure on traders. “We are being harassed under the guise of new licence fees and garbage charges. Look at the state of sanitation and parking in markets—it’s appalling. No actual services are being provided,” he said.

Garbage user charge controversy continues

Meanwhile, mayor Mahesh Kumar has written to chief minister Rekha Gupta, objecting to the imposition of the garbage user fee. He alleged that the proposal was never placed before the House and was “quietly” enforced by municipal commissioner Ashwani Kumar.

BJP spokesperson Praveen Shankar Kapoor weighed in, claiming that a similar surcharge had been proposed in 2021 by the East Delhi Municipal Corporation commissioner but was stopped by the then BJP mayor. “Now the AAP mayor is simply issuing statements instead of acting. Why hasn’t she directed the commissioner to halt the collection of the user charge?” Kapoor asked.