BBMP's apathy cost Bengaluru Rs 7662-crore property tax revenue loss
- The Finance ministry’s Economic Survey 2016-17 report has put BBMP in a spot.
- The report found that Bengaluru has failed to tap 80% of property tax revenue potential.
- The Economic Survey found that the city collected only Rs 1,031 crore in taxes.
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The Finance ministry’s Economic Survey 2016-17 report has put the Bruhat Bengaluru Mahanagara Palike in a spot, after it revealed that the city municipal corporation failed to tap 80% of its property tax revenue. In short, the report found that BBMP has lost out on a revenue potential of Rs 7662-crore.
Bengaluru, which depends on property tax as its main source of income, manages to collect no more than 5-20%, according to the Finance ministry’s Economic Survey 2016-17. The city but has a phenomenal potential. "The estimate indicates Bengaluru has potential of collecting upto 4 to 7 times of its current property tax revenue," the report revealed.
At present, BBMP collects no more than Rs 1031.8-crore in taxes and it can go as high as Rs 8,693 assuming minimum floor space index (FSI) value.
Satellite imagery of Bengaluru, spanning 784 square km, show near 50 per cent built-up area. The potential property tax is estimated by fixing a ward as the basic unit for identifying net built-up area, property tax unit (guidance values) and FSI ratio.
“The major factors contributing to poor realisation from property tax are the poor assessment rate, weak collection efficiency, flawed methods for property valuation, loss on account of exemptions and poor enforcement,” the report said.
The Central government's Economic Survey, which for the first time has embraced Big Data, emphasised that cities such as Bengaluru should use satellite imagery for improving urban governance by facilitating better property tax compliance.
"Municipalities also need to make the most of their existing tax bases. There is a need to adopt the latest satellite-based techniques to map urban properties. The
Government should leverage the Indian Space Research Organization (ISRO), National Remote Sensing Agency (NRSA) to assist the urban cities with GIS mapping of all properties," the survey said.
"Property tax potential is large and can be tapped to generate additional revenue at city level," the report added.
