Resource Mobilization Experience in India

1
Resource Mobilization Experience in India

• Resource requirement of ULBs/PSAs
• Resource Avenues
• Reforms for Resource Mobilization

2
Resource Requirement of ULBs

• Functional Responsibilities of ULBs
• -74th Constitution amendment 12th
  Schedule
• Municipal Acts
• Obligatory/core functions/services
• Discretionary functions/services
• Capital works
• Operation Maintenance
• Cost of subsidy
• Debt servicing

3
Resource Requirement for infrastructure
/services (2000-05) Estimates
4
Finances of Municipal Corporations
5
Finances of Municipal Corporations (Per captia)
6
Revenue Avenues
7
Reforms for Revenue Mobilization

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

8
Property Tax Reform

• Existing System ARV
• Legal infirmities
• Low revenue productivity
• Arbitrary, non-transparent
• Reforms
• Area based system
• Capital value system
• Site value system
• Area based system Ahmedabad, Bangalore,
  Hyderabad, Lucknow, Patna,
• Location
• Usage
• Structural quality of building
• Capital Value system
• Tax derived from assessed value of land
  improvements
• Karnataka model System in practice in the US,
  Latin America, Germany, Japan
• Tax Administration Coverage
  loss of base
• Collection Exemptions
• Tax information system Vacant Land
• Monitoring Revisions-time lag

9
Increase in No. of properties
10
Collection of Property tax
11
Collection of Property tax
12
Municipal Property /Asset Management

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

13
Municipal Bonds in India
14

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