Few states have not been given the powers to levy this tax
Government's ambitious vision of setting up smart cities across the country could be derailed if the urban local bodies (ULBs), particularly the smaller ones who will be providing the various amenities from water to electricity, sewage etc., do
Mumbai: The government’s ambitious vision of setting up smart cities across the country could be derailed if the urban local bodies (ULBs), particularly the smaller ones who will be providing the various amenities from water to electricity, sewage etc., do not have the finances that are a critical factor.
While grants have been allocated, they are conditional and finally the smaller ones will have to depend on borrowing from the market. But they can only do this if their accounts are audited etc., which is not the case. Besides, their wage bills range from 32 per cent to 74.4 per cent in the case of Simla whilst expenditure in essentials like public health, safety, water supply, education is barely 0.4 per cent to seven per cent.
A study by Care Ratings which computes these details says, “Apart from identifying the quantum of finances required in order to implement the smart cities idea, it is also very critical to identify the financial resources which would remain to be the key to steer this massive agenda. “
Care’s study of 16 urban local bodes in eight states reveals their dependence on tax revenue that comes primarily from property tax and octroi duty. For property tax, this ranges from 15 per cent for Jabalpur (excluding Jodhpur and Pimpri- Chinchwad) to above 85 per cent for cities like Delhi, Rajkot, Bhopal and Lucknow.
The 14th Finance Commission has pointed out that there is considerable scope for the local bodies to improve revenues from own sources especially property tax. However, a few states have not been given the powers to levy this tax so far and in most states where the tax is being levied, the rates have not been revised periodically, the list of taxable properties is not being updated and a large number of properties remain outside the tax net. Octroi is another important source of tax revenue for ULBs.
( Source : deccan chronicle )
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