CHANDIGARH, Feb. 18 -- In a setback to the cash-strapped Chandigarh Municipal Corporation (MC), the general House on Monday deferred two key revenue-generating proposals-hiking the sewerage cess and increasing penalties on shopkeepers for encroaching public spaces.

The MC, which had reduced the sewerage cess to 20% last year, was considering raising it back to 30%, a move that would have resulted in higher water bills for residents. However, the proposal quickly turned into a political debate, with AAP and Congress councillors opposing the hike and accusing BJP mayor Harpreet Kaur Babla of introducing an "anti-citizen" tax.

Raising slogans like "mayor of taxes" and "new mayor brings new taxes," opposition councillors attacked the ruling...