Shimla: The Himachal Pradesh Cabinet has approved a new lease policy to revise the rents of nearly 9,000 shops and stalls owned by urban local bodies across the state. The move is aimed at ending decades-old “dead rents” and strengthening the financial position of municipal corporations, municipal councils and nagar panchayats.
The policy will apply to 71 urban bodies, including five municipal corporations, 29 municipal councils and 37 nagar panchayats. These institutions rely heavily on rental income from commercial properties as a primary source of revenue. However, many shops in prime market areas are still operating under old lease agreements with monthly rents as low as Rs 100 to Rs 500.
In contrast, newer shops are being rented at rates between Rs 1,500 and Rs 5,000 per month. The wide gap has resulted in substantial revenue losses for urban bodies. The government has decided to re-evaluate rents and align them closer to prevailing market rates.
Urban Development Minister Vikramaditya Singh said that rents of shops operating at extremely low rates will be fixed afresh under the new policy. He said the policy will also ensure transparent lease renewals and recovery of long-pending dues, which will help improve municipal revenues.
Under the Himachal Pradesh Municipal Act, revised rents will be determined on the basis of circle rates and the location of the property. Different slabs will be fixed for shops located in main markets, link roads, suburban areas and residential zones. The nature of commercial activity — such as retail shops, banks or warehouses — will also be taken into account while fixing the rent.
The new policy also proposes a mechanism for regular rent increases at fixed intervals to prevent stagnation in income. The government believes that the decision will provide financial stability to urban local bodies and enable them to carry out development works more effectively.
