Dr. A Ravindra Resource Mobilization Experience in India Resource requirement of ULBs/PSAs Resource requirement of ULBs/PSAs Resource Avenues Resource Avenues Reforms for Resource Mobilization Reforms for Resource Mobilization

Dr. A Ravindra Resource Requirement of ULBs Functional Responsibilities of ULBs Functional Responsibilities of ULBs - 74 th Constitution amendment 12 th Schedule - 74 th Constitution amendment 12 th Schedule Municipal Acts: Obligatory/core functions/services Discretionary functions/services Capital works Operation & Maintenance Cost of subsidy Cost of subsidy Debt servicing Debt servicing

Dr. A Ravindra Resource Requirement for infrastructure /services ( ) Estimates Source Requirement ( Rs. in Crs. Lakaria Committee Norms(1963)-Updated to (O&M) India Infrastructure report, 1996 (Rakesh Mohan Committee) (Capital cost + O&M) Ministry of Urban Devl. GOI (Revenue gap- O&M

Dr. A Ravindra Finances of Municipal Corporations 1. Own Revenues Grants and Tax devolution Total Revenues Total Receipts Revenue Expenditure Capital Expenditure Total Expenditure Source of revenue MumbaiHyderabadLucknowMizapur

Dr. A Ravindra5 Finances of Municipal Corporations (Per captia ) Own Revenues Grants and Tax devolution Total Revenues Total Receipts Revenue Expenditure Capital Expenditure ## Total Expenditure Source of revenue MumbaiHyderabadLucknowMizapur

Dr. A Ravindra Revenue Avenues Own source revenue Local Taxes- -PT, Octori User charges -Water, sewage Fees, fines, rent, etc. Receipt from Govt. Shared Taxes Grants SFC General Purpose Loans Financial Institutions External borrowing

Dr. A Ravindra Reforms for Revenue Mobilization Fiscal reforms: Property Tax, Octori Fiscal reforms: Property Tax, Octori Land-based non-tax reforms: Development charges, change of land use, enhanced FAR, transfer of development Rights (TDR) Land-based non-tax reforms: Development charges, change of land use, enhanced FAR, transfer of development Rights (TDR) Pricing of services: Cost recovery Pricing of services: Cost recovery Devolution: Intergovernmental transfers-norms, State Finance Commission, Central Finance Commission Devolution: Intergovernmental transfers-norms, State Finance Commission, Central Finance Commission Accessing capital market: Municipal Bonds Accessing capital market: Municipal Bonds Resource management: Reforming- Accounting System, Asset management, Cost reduction, capacity building. Resource management: Reforming- Accounting System, Asset management, Cost reduction, capacity building.

Dr. A Ravindra Property Tax Reform Existing System: ARV Existing System: ARV Legal infirmities Legal infirmities Low revenue productivity Low revenue productivity Arbitrary, non-transparent Arbitrary, non-transparent Reforms: Reforms: Area based system Area based system Capital value system Capital value system Site value system Site value system Area based system – Ahmedabad, Bangalore, Hyderabad, Lucknow, Patna, Area based system – Ahmedabad, Bangalore, Hyderabad, Lucknow, Patna, Location Location Usage Usage Structural quality of building Structural quality of building Capital Value system Capital Value system Tax derived from assessed value of land & improvements Tax derived from assessed value of land & improvements Karnataka model – System in practice in the US, Latin America, Germany, Japan Karnataka model – System in practice in the US, Latin America, Germany, Japan Tax Administration – Coverage – loss of base Tax Administration – Coverage – loss of base Collection Exemptions Collection Exemptions Tax information system Vacant Land Tax information system Vacant Land Monitoring Revisions-time lag Monitoring Revisions-time lag Training Commercial hoardings Training Commercial hoardings new/unauthorized new/unauthorized

Dr. A Ravindra Increase in No. of properties Cities No. of property assessed % of increase Growth Rate Mumbai Calcutta Bangalore Hyderabad Ahmedabad Bhopal Ludhiana Mizapur

Dr. A Ravindra Collection of Property tax Percentage of Revenue Collected Major Cities Ahmedabad Bangalore Bhopal Calcutta Chennai Hyderabad Jaipur Ludhiana Mirzapur Mumbai Patna

Dr. A Ravindra Collection of Property tax

Dr. A Ravindra Municipal Property /Asset Management Property Portfolio of ULBs Roads* Schools/colleges Roads* Schools/colleges Footpaths*Hospitals/dispensary Footpaths*Hospitals/dispensary Parks* Office buildings Parks* Office buildings Playgrounds*Staff Quarters Playgrounds*Staff Quarters Dumping sites*Commercial Property Dumping sites*Commercial Property Burial grounds(Shops, markets etc.) Burial grounds(Shops, markets etc.) Stray vacant sites* Vehicle depot/workshop Stray vacant sites* Vehicle depot/workshop Use of land/ properties Encroachments Valuation of properties Income from leased/rental properties Gap in revenue-potential

Dr. A Ravindra Municipal Bonds in India Sl.No.Authorityyear Ratin g Amount (Rs. Crs) Interest % 1 Ahmedabad Municipal Corporation Jan 1998 AA Bangalore Mahanagar Palike Dec 1997 A Ludhiana Municipal Corporation Sept 1999 LAA Nasik Municipal Corporation May 1999 AA Bangalore Water Supply Board Aug 2000 NA Kanpur Development Authority Dec 2000 LA Madurai Municipal Corporation Mar 2001 LA Ludhiana Municipal Corporation Jun 2001 LAA Tamil Nadu Urban Development Fund Aug 2001 LAA Nagpur Municipal Corporation Nov 2001 LAA Ahmedabad Municipal Corporation Mar 2002 AA Municipal Corporation of Hyderabad Mar 2002 AA

Dr. A Ravindra Thank you Thank you