It was only due to the small municipal coverage area -- only 2.5 per cent of the total area of the Millennium City is under the civic body -- that no fund was allocated to Gurgaon under the Jawaharlal Nehru Urban Renewal Mission (JNURM). Instead, Faridabad got Rs 2,300 crore fund.

Not only that, the district administration estimates a loss of Rs 300 crore house tax because properties falling outside the municipal area are out of tax net. The present house tax collection by the municipal council is only Rs 5 crore. "Extending the municipal area has been long overdue. The delay is causing huge loss to the city as a whole and hampering the development. We have no right to collect property tax and thereby the city is incurring huge revenue loss. Even properties in licensed areas don't pay any tax since they have not been handed over to the council," said HUDA administrator S P Gupta.

Besides revenue loss, the infrastructure is also highly inadequate as water supply to the city is meant for only 6 lakh people -- the population under the municipal limit -- while the total population is approximately 17 lakh.

Keeping in mind the huge losses and non-uniform growth of infrastructure, the state government, administration and top consultants, including McKinsey India Ltd, are feeling the need for extending the municipal limits.

"The government is serious about strengthening and extending the limits of the municipal councils in the state. The process has started and fund allocation for the existing bodies has been increased. In next couple of years, these bodies will see a sea change," said chief secretary Prem Prashant.

But district administration officials feel that the change might not be as easy as it seems to be. Though the government guidelines make it mandatory for Haryana Urban Development Authority (HUDA) and private developers to transfer a sector to municipal council five and 15 years, respectively, after its development, the Authority and builders have never complied, officials say.

"The delay in handing over the HUDA sectors and colonised areas to the municipal council will make the the Authority and department of town and country planning (DTCP) financially sick. They are spending public money without generating any revenue," said a senior official. And they are not handing over their areas to municipality fearing that this might cause a fall in the property price, officials added.

Even the minister of state for urban development Savitri Jindal told Times City: "Though the government is committed to increasing the municipal limits, the authorities developing the residential and industrial sectors have not yet handed them over to the municipality."

However, citizens don't buy the government's argument that failure to generate revenue through house tax has affected the city's development. "It's fine that municipal limits should be extended and we know that's going to happen at some point of time. But keeping in mind the dismal performance of municipalities in our neighbouring cities, we don't welcome such a proposal," said DLF City RWA secretary general Sudhir Kapoor.

He added that if the government was serious about augmenting infrastructure, it could have used Rs 1,200 crore that has been lying with it for years. "This is the amount they accumulated for external development. We are also strictly against any free lunch, but the fact remains that the government must deliver to win the faith of stake holders," Kapoor added.