Municipal Finance in India : Municipal Tax Revenue sources

Municipal Revenue generation through Taxation in India

“Local Self Government becomes meaningless in the absence of financial autonomy. It enjoys the power of imposition of local taxes. The municipal bodies must have a wider scope of collection of revenues”

(Source: UIDSSMT)


ULBs have invented many channels and instruments of revenue generation in course of time due to urgency of handling growth, some of the tax sources both conventional and non-conventional, are mentioned below.

TAXES/FEES

CONVENTIONAL MUNICIPAL REVENUE SOURCES

Composite Property Tax

Water Charges

Sewerage Charges

Conservancy Charges

Building Permit Fee

Development Charges

Trade Licensing Fee

Advertisement Tax

Shop Room Rent

OTHER GENERAL MUNICIPAL REVENUE SOURCES

House Tax 

Show Tax  

Building Plan Fee

Tax on the consumption of Electricity    

Sale of liquor     

Cess on the transfer of immovable property   

License for Dangerous and Offensive trades

Rates are varied in respective ULBs

Rehari License Fee

Tehbazari Tax

Slaughter House Fee

Cattle Pound Fees

Birth & Death Certificate Fee

Copying Fee

Tree Cutting Fee

Library Membership

Ground Tax

Vehicle License Fee

Death & Birth Reg./ Late Fee

Forest /Garden Income

Dog License Fee 

Animal Tax (Cattle Pound)

Trade License Fee

Tax on advertisement other than advertisement published in the newspaper.

NON-CONVENTIONAL MUNICIPAL REVENUE SOURCES

Vacant Land Tax

Service Taxes

Surcharge on Land Registration Duty

Water Supply Donations

Water Supply Connection Charges

Water Benefit Tax

Water Betterment Charges

Sewerage Donations

Sewerage Connection Charges

Sewerage Benefit Tax

Sewerage Betterment Charges

Bulk Garbage Collection Charges

Betterment Charges

External Betterment Charges

Open Space Contribution

Impact fee

Transferable Development Right

Premium FSI

Sub-division charges

Planning Permission Betterment

Road Cutting Charges

Street Tax

Frontage Tax

Cess on Infrastructure

Motor Vehicle Tax/Surcharge

Tax on Petrol and Diesel

Business License Fee

Hoarding Charges,

Advertisement Placement Fees,

Cable TV Fee,

TV Advertisement Charges

Royalty on Auctions

INNOVATIVE /UNIQUE MUNICIPAL REVENUE SOURCES

General Obligation Bond/ Municipal Bond

Awarding of development rights,

Town planning schemes (TPS)

Plot/layout readjustment

Additional FSI/FAR

Goodwill auctions

Bank linkages (for Urban Poor)

Capital-based property tax system

Land banking

Transferable development rights (TDR)

Special Education tax

Pilgrim

Octroi

Special and General Sanitation

Shows

Toll on Vehicles,

Timber

Terminal

Menial Domestic Servants

Artisans

Entertainment Tax

SOME OF THE UNIQUE REVENUE STREAMS (THROUGH FEES/ CHARGES) OF MUNICIPALITIES ACROSS MAJOR STATES IN INDIA

Registration Fee

Mutation Fee

Market Fee 

Trade License Fee

Compounding Fee

Slaughter House Fee

License Fee

Betterment / Development Fee

Fire Brigade

Public Health

Swimming Bath Fee,

Stock Registration

Cattle Pound Fee

Teh Bazari Fee

Pilgrim

Scavenging

Prevention of Food Adulteration Fee

Dangerous and Offensive Trade License Fee

Animal Registration Fee

Compounding Fee

Warrant Fee

Bus Stand Fee

Copying Fee

Cart Stand Fee,

Encroachment Fee

Fees from burning ghats

Birth and Death Registration Fee

Sources:

cgg.gov.in/  (http://bit.ly/Jb35C5),

UIDSSMT / http://bit.ly/IkNKk0,

RBI / http://bit.ly/J8i70d

Rural Development Schemes in India

Some of the Schemes launched by Government of India (GoI) at present and in Past under deferent department and mission for Rural Development are listed below with the website link or relevant resources. 

Ministry of Rural Development-MoRD (http://rural.nic.in/)

Department of Rural development-DoRD (http://drd.nic.in/)

• Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA) (http://nrega.nic.in/netnrega/home.aspx)
• Swarnjayanti Gram Swarozgar Yojna (SGSY) (http://sgsy.gov.in/)
• Pradhan Mantri Gram Sadak Yojna (PMGSY) (http://pmgsy.nic.in/)
• Indira Awaas Yojana (IAY) (http://iay.nic.in/netiay/home.aspx)
• National Social Assistance Programme (NSAP) (http://rural.nic.in/sites/downloads/right-information-act/06NSAP(F).pdf)

Department of Drinking Water Supply-DoDWS (http://ddws.gov.in/sites/upload_files/ddws/files/pdf/IECPlanwater2010-11.pdf)

• Total Sanitation Campaign (TSC) (http://tsc.gov.in/RuralSanitationNew/HomePage.aspx)
• National Rural Drinking Water Programme (NRDWP) (http://indiawater.gov.in/imisreports/nrdwpmain.aspx)

Department of Land Resouces-DoLR (http://dolr.nic.in/)

• National Land Records Modernization Programme (NLRMP) (http://dolr.nic.in/Nlrmp.htm)
• Integrated Watershed Management Programme (IWMP) (http://dolr.nic.in/iwmp_main.htm)

 Bharat Nirman (http://www.bharatnirman.gov.in/ )

• The Pradhan Mantri Gram Sadak Yojana (PMGSY), (http://pmgsy.nic.in/)
• Accelerated Irrigation Benefit Program, (http://wrmin.nic.in/writereaddata/mainlinkFile/File620.pdf)
• Rajiv Gandhi Grameen Vidyutikaran Yojana, (http://rggvy.gov.in/rggvy/rggvyportal/index.html)
• Indira Awas Yojana, (http://iay.nic.in/netiay/home.aspx)
• National Rural Drinking Water Program and (http://indiawater.gov.in/imisreports/nrdwpmain.aspx)
• Rural telephony. (http://cca.ap.nic.in/ruraltelephony.html)

By- Anoop Jha

“Smell Architecture”!! We have to accept non-tangible design elements as part of architecture and Urban Design!!

Walking down the buzzing food streets of the world is a thrilling experience for most of us, it’s a play field of light and shadow, sound and noise, colors, textures and smell. Smell of street, smell of variety of foods being baked, grilled, processed, and served with love from generations, aroma of spices in the air, that raw fragrances of freshly chopped vegetables, occasional breeze with hint of what is being cooked inside, looking at the faces of crowd apparently engulfed and hypnotized by the tempting aroma of food, all this combined together with the built architecture of street gives an experience which is complete and memorable.



Now take a few steps back and rewind the tour without “Smell” part of the whole experience, and you will realize how important these intangible elements like smell, sound etc. play in making architecture and urban design a complete experience.  Though Light is also an intangible element but it has been given an undue advantage in architecture since centuries, contrary  to its counterparts like smell,sound etc. Unfortunately they don’t teach this in architecture and planning school as well, probably they themselves have unable to understand the significance of such non-tangible elements of architecture. Unfortunately there focus has remained on mass-producing architects, designers and technical hands through proven formulas and they have confined themselves in the predefined boundaries of architecture like, form,  function, space, texture, colors, at most interplay of light and shadow. What about smell, noise, feelings and state of mind of users, experiencing and validating the existence of the architecture and urban design in the first place?

It’s not a hypothetical assumption but a fact that you can’t create a good architecture without a great user experience which involves variety of non-tangible elements, those elements which can’t be quantified in form of project specification items into a spreadsheet.  It’s high time that architects and urban designers should shift focus towards the ambient environment and users experience since they have already mastered the art of form and space through accumulative knowledge of centuries. It’s time to move on.

By - Anoop Jha

Why public transport system should reach breakeven much before projected

Dilemma of perceived order and actual chaos

A case of typical buzzing metropolitan city of any developing country

Ever wondered while travelling in a suffocatingly overcrowded metro or local train that whether they might have shown similar huge footfall numbers in their design and financial reports? Don’t think so. Because they can’t!!

No guideline in the world allows such high density of footfall per unit area within any public transport system, because that is insane, that is inhuman. But unfortunately its happening, because huge gap of demand and supply. And we accept it, we don’t mind, we don’t question, we don’t have option, we not only accept it, we often praise it, of course public transport is a wonderful system of mass transit, but no wonder why a huge segment of population still prefer to travel by their own car, spending money and time like anything, just to get a private breathing space inside their personal car.

When it comes to transport numbers and financial projections for mass public transport system in overpopulated cities of developing countries, it’s usually purposefully flawed. Why? There is a catch. Metro and rail coaches are designed to accommodate a fixed maximum carrying capacity based on standards and international norms. Sounds good!! Because these standards consider the acceptable optimum and comfortable footfall/ ridership density as there thumbrule with some inbuilt tolerance for unexpected occasional growth in ridership and of course while doing design and financial projections for the MRT projects, consultants take these standard thumbrules as there basis for calculation with some contingency/ margin and they model there business plan as per this acceptable norms. They can’t show realistic overcrowded scenario in their financial calculations and projections because no financing agency/ bank/ partner will accept the model which is prepared by breaking the rule- like standard acceptable ridership density. Technically and morally they can’t propose a transport system which will be operating at an efficiency of 150-200% of its design capacity even if it is an inevitable case, because its unsafe, because it’s not acceptable on many grounds, at least they can’t disclose it in public domain otherwise there would be too much of hue and cry on the subject.  So when they come up with a financial projection with specified breakeven point, that breakeven point might not be realistic, it might be far beyond the actual realistic date. In actual overcrowded scenario more footfalls should help achieve breakeven point much early than projected.

It’s high time for those metropolitan cities which are struggling to provide an adequate and morally acceptable comfort level to its people, either in its transit system or may be in domain of housing and who repeatedly fail to provide the same due to unmanageable population growth and financial constraints, should recognize their constraints, and devise an operational methodology which is more realistic and suitable to their specific need.



May be they should accept inevitable higher population density and need to revise the ridership density thumbrule/ standards, reflecting real life scenarios of the city accepting their limitations, and should use the same in design and financial calculation. Understanding its limitations and inevitability of growth, may be a high density city needs a tougher and much robust metro and rail coaches with robust inbuilt facilities, robust air-conditioning system, higher air exchange rate, temper-proof interior, with more sophisticated audiovisual information system for fast and safe passenger exchange to avoid chaos due to confusion, may be they need better imbedded security system, may be they need to be educated in the school itself how to travel and behave in an overcrowded public transport system. May be they need to be educated in the planning schools to take into account real life scenarios while learning projections, maybe planners should be taught to challenge the validity and contextuality of thumbrules, established norms, methods and age old theories rather than simply imitating and following them in decades of inertia.  We will definitely have more and more sophisticated simulation tools for better understanding of the situation and more realistic projections, but we will still need human perception and judgment for a holistic planning which is beyond those formulas.

Some thoughts on socio-economic projections can be found here in another post titled “How reliable are socio-economic future projections?” http://planningurbanoregional.blogspot.in/2011/11/how-reliable-are-socio-economic-future.html

By- Anoop Jha

Defying purpose of sidewalks: its story of many developing cities

They sleep, they socialize, they play, they construct, they're born, they die, they live, they beg, they sell and they do everything on that thin and broken strip of exposed sidewalks, but walking. They defy the very purpose of sidewalk.













Apparently It’s not their choice; for some its fate, for some its livelihood, for some its entertainment for some its greed. Sometimes it’s the only piece of land available in a big crowded city for those poorest of urban poor, sometimes it’s the most accessible everyday market place for those returning home from work, sometime its paradise for street food lovers, sometimes its playground for street kids, sometimes its breeding ground of crime, sometimes abandoned sometimes encroached sometimes its provider and sometimes victim of business greed, used for everything, but walking. It’s the story of almost every city of developing countries. In the absence of regular, appropriate, continuous and user friendly sidewalks and footpaths across the city and without better livelihood opportunities and ample urban housing, this phenomenon is going to inevitably present itself in different forms.

Walking down the memory lane of city

Walking down the memory lane, may be way different an experience now than actually walking down the old neighborhood lane you used to live decades back, while you were studying in that town, while you were on a social visit to your aunts place or on a vacation to that place, or the narrow street you use to travel to and fro from the school in childhood days.



City changes its form, experience; attitude like a person changes his appearance, philosophy and approach In course of time. Impression and impact of time can be seen on the city as we see in the human life. City reinvents itself and reflects contemporary life. Comparing present and past impression and memories of city is an emotional affair. Hence extra care needs to be taken in revitalizing and redeveloping cities because millions of memories and hopes are attached to these. 

What with urban farming? Can we make it happen?

Urban farming, a real good concept, something which might save the humanity from starvation. How far we are from autonomous urban system, system which generates enough food for itself, food affordable enough to reach the lowest economic strata of urban system, food pallet diverse enough to suite the heterogeneous  appetite of cosmopolitan city.  Why it is that we started doing agriculture thousands of years ago, but basic principal of agricultural has remained same apart from high-tech agricultural  machines,  tools, pesticides, genetically modified crops etc., why it seems stagnated, while in the course of evolution world population is shifting more and more towards urban centers but the source of food which was in the rural areas have remained there itself, of course it triggers economic growth, employment etc. through to and fro movement of processed and unprocessed food between urban and rural areas, which perfectly makes sense, but have we done it purposefully, or is it that we couldn’t devise a full blown method to get our food produced in the city itself,  apart from small experimental efforts of terrace farming etc. dotted here and there on the city map. Of course, city chooses its own priority activities in its core while pushing and spreading less important activities towards periphery and surrounding rural  regions. Is it that we are  treating urban farming as a luxury lifestyle item like terrace farming which can be shown to our guests with pride, is it that urban farming has just become a formula to get noticed in the race of green architecture, or a green USP to convince the client and sell the project to a wealthy end user, is it just a tool to prove that you are environmentally enlightened or has it really a potential to feed the city.

Can we make urban farming a concept easy enough  to be grasped by an average city dweller since gardening and farming involves skills and knowledge which is not taught in school,  a process easy enough to be implemented in the every balcony and every terrace of the city, can government provide training and  motivation to its citizen with supportive policies to make widespread urban farming a reality.



Can we expect array of fruit trees along the city streets in the near future, can we expect orchard and vegetable farming in the public parks and abandoned land parcels as a sustainable urban landscape effort. Can we expect urban farming in majority of houses,  apartment and premises of any city, implemented through training, stringent bylaws, tax saving policies,  subsidies and persistent efforts.  Can we give our child an opportunity to witness agricultural life cycle in their own private premises to better understand the process of life.     

Have we ever thought that urban farming might not be a luxury to showcase but an inevitable necessity for every city, which we are delaying and prolonging somehow?