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Economic Survey 2017: Property Tax can be tapped to generate additional revenue at city-level

The survey stated that even today, every Indian city faces serious challenges related to water and power supply, waste management, public transport, education, healthcare, safety, and pollution.

BT Online   New Delhi     Last Updated: January 31, 2017  | 14:26 IST
Economic Survey 2017: Property Tax can be tapped to generate additional revenue at city-level

The Economic Survey 2016-17, presented today in the Parliament by the Union Finance Minister Arun Jaitley, stated that Urban Local Bodies (ULBs), having primary responsibility for the development and service provisioning of cities, face major and inextricably linked problems like large infrastructure deficits, inadequate finances, and poor governance capacities.

The survey stated that even today, every Indian city faces serious challenges related to water and power supply, waste management, public transport, education, healthcare, safety, and pollution.
 
The analysis carried out for the Survey has found that greater service delivery is correlated with more resources, own revenue, staffing and capital spending per capita. Analysis indicates no clear relationship between service delivery and governance.

The Survey mentioned that presently, tax revenues are not constrained by inadequate taxation powers of ULBs. One promising source is property tax. The study done for the Survey showed that property tax potential is large and can be tapped to generate additional revenue at city level.

Competition between the states became a powerful dynamic of change and progress, that dynamic should extend to competition between states and cities and between the cities as well.

Cities that are entrusted with responsibilities, empowered with resources, and encumbered by accountability could become effective vehicles for competitive federalism and, indeed, competitive sub-federalism to be unleashed.

 

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