1. 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

2. 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

3. Dr. A Ravindra Resource Requirement for infrastructure /services (2000-05) Estimates Source Requirement ( Rs. in Crs. Lakaria Committee Norms(1963)-Updated to 1997-98 72000 (O&M) India Infrastructure report, 1996 (Rakesh Mohan Committee) 125000 (Capital cost + O&M) Ministry of Urban Devl. GOI 18500 (Revenue gap- O&M

4. Dr. A Ravindra Finances of Municipal Corporations 1. Own Revenues202516122272850103 2. Grants and Tax devolution13133077314834463 3. Total Revenues333846199587684567 4. Total Receipts385025255807685567 5. Revenue Expenditure378269160227274626 6.Capital Expenditure69158581021 7. Total Expenditure385184246037274647 Source of revenue MumbaiHyderabadLucknowMizapur

5. Dr. A Ravindra5 Finances of Municipal Corporations (Per captia ) Own Revenues 1312 24213453 Grants and Tax devolution 851 151218239 Total Revenues 2164 393352292 Total Receipts 2495 504352292 Revenue Expenditure 2451 317342323 Capital Expenditure ## 45 170011 Total Expenditure 2496 486342333 Source of revenue MumbaiHyderabadLucknowMizapur

6. 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

7. 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.

8. 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

9. Dr. A Ravindra Increase in No. of properties Cities No. of property assessed % of increase Growth Rate 1998-99 1998-9999-00 Mumbai2499542499990.027.58 Calcutta3411983621876.1512.66 Bangalore3809563889562.1027.03 Hyderabad4349084526354.0826.49 Ahmedabad9379619452280.77-1.98 Bhopal1230001243001.064.35 Ludhiana1842551933074.9130.62 Mizapur24058244171.4970.00

10. Dr. A Ravindra Collection of Property tax Percentage of Revenue Collected Major Cities 1998-991999-00 Ahmedabad15.6112.46 Bangalore54.9063.78 Bhopal17.5919.42 Calcutta50.0055.00 Chennai63.2263.05 Hyderabad66.5674.78 Jaipur43.3458.95 Ludhiana60.0070.00 Mirzapur19.0031.00 Mumbai57.4355.56 Patna56.0066.00

11. Dr. A Ravindra Collection of Property tax

12. 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

13. Dr. A Ravindra Municipal Bonds in India Sl.No.Authorityyear Ratin g Amount (Rs. Crs) Interest % 1 Ahmedabad Municipal Corporation Jan 1998 AA100.0014.00 2 Bangalore Mahanagar Palike Dec 1997 A125.0013.00 3 Ludhiana Municipal Corporation Sept 1999 LAA17.8014.00 4 Nasik Municipal Corporation May 1999 AA100.0014.75 5 Bangalore Water Supply Board Aug 2000 NA10.0012.90 6 Kanpur Development Authority Dec 2000 LA+50.0013.50 7 Madurai Municipal Corporation Mar 2001 LA+30.0012.25 8 Ludhiana Municipal Corporation Jun 2001 LAA+2.0013.50 9 Tamil Nadu Urban Development Fund Aug 2001 LAA+106.0011.85 10 Nagpur Municipal Corporation Nov 2001 LAA-31.1013.00 11 Ahmedabad Municipal Corporation Mar 2002 AA100.009.00 12 Municipal Corporation of Hyderabad Mar 2002 AA+82.508.50

14. Dr. A Ravindra Thank you Thank you