Municipal Finances, Resource Mobilisation and Municipal Budget

B. RAMESH BABU ADDITIONAL DIRECTOR OF MUNICIPAL ADMINISTRATION , O/O C&DMA , ANDHRA PRADESH.

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General Trends of Constituents of Income in Urban Local Bodies 3

Municipal Own Revenues(Taxes and Non Taxes) Occupy

the Lions Share (54%)

*Non Plan Grants Include 13th Central Finance Commission Grants.

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Taxes and Non-Taxes in ULBSTaxes

* Property Tax

* Advertisement Tax

* Vacant Land Tax – 0.5%/0.2%

* Profession Tax

Municipality – 95%

Collection Commercial Tax Dept – 5%

* Entertainment Tax

Municipality – 90%

Film Chambers – 7%

Collection Charges to commercial – 3%

* Transfer duty on property

Municipality – 95%

Collection Dept.(Registration Dept)– 5%

Non - Taxes * Water Charges

* Fees from Markets and Slaughter Houses.

* Rents from shops

* Various Categories of License Fees

* Encroachment Fees

* Contribution for water supply connections

* Building permission Fee

* Layout Charges

* Leases from Tanks and lakes

* User Charges

Property Tax Rate of Property Tax not exceed including LC & ET.

- Residential Buildings 25% of ARV

- Non-Residential Building 33% of ARV

- Corporations Components of Property Tax

- General Purpose

- Water and Drainage

- Lighting

- Scavenging Assessment of Property Tax

- Based on ARV Fixation of ARV with reference to

- Location of the building

- Type of Construction

- Plinth Area

- Age

- Usage

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Property Tax Zoning based on location

The entire Municipal area is to divide into convenient territorial zones with reference to expected rental values based on;

- Civic Amenities

- Markets and Shopping Centers

- Education and Medical Institutions

- Banks and Public offices

- Factories and Industries Classification of Buildings

a. RCC Posh

b. RCC Ordinary

c. Madras Terraced or Jack Arch roofed or stone or slabs or states roofed buildings.

d. Mangalore tiled roofing or Asbestos roofing or G. I. Roofed buildings.

e. Country tiled buildings

f. Huts

g. Any other buildings not covered above

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Property Tax

Usage of the Buildings

a. Residential

b. Shops, Shopping Complexes

c. Public Use

- Offices complexes, public and private offices and banks

- Hospitals and Nursing Homes

- Educational Institutions

d. Commercial purposes

- Hotels, Lodges, Restaurants

- Godowns and other business establishments

e. Industrial purpose

- Factories, Mills, Workshops and other industries

f. Cinema theatres or places of public entertainment

g. Any other use not covered above

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Property Tax …. Contd… Allowances

Age of the building Allowances

25 years below 10 % of building ARV

25 to 40 years 20 % of building ARV

Above 40 years 30 % of building ARVRebate on owner occupied residential 40 % of building ARVbuildings Exemptions

- Public Warship

- Choultries

- Ancient Monuments

- Charitable Hospitals

- Hospitals and Dispensaries maintained by Railway Station

- Burial and burning grounds

- Municipal Buildings

- Irrigation Works vested with Government

-( Recognized Education Institutions )

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Property Tax … Contd…Exemptions.. Contd..

Owner occupied residential buildings are exempted from payment of property tax by a council resolution if ARV doesn’t exceed.

- Municipal Corporations - Rs.900/-

- Sel & Spl Grade Mpltys - Rs.450/-

- Other Mpltys - Rs.300/-

Houses constructed through weaker section housing programmes by State Government has to collect Rs.1/- for every half year.

Vacant Land Tax

- Mpl Corporations - 0.5% of Capital Value

- Mpltys/N.Ps - 0.2% of Capital Value

Advertisement Tax

- Hordings

- Uni poles

- Lolly Pops etc.,

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Non Taxes- WATER CHARGES

- FEE FROM MARKETS AND SLAUGHTER HOUSES

- RENTS FROM COMMERCIAL COMPLEXES AND SHOPS

- TRADE LICENSE FEE

- BUILDING PERMIT FEE

- ENCROACHMENT FEE

- BETTERMENT / DEVELOPMENT CHARGES

- CONTRIBUTIONS TO WATER SUPPLY CONNECTIONS

•OTHER NON TAXES

- FEES FOR ISSUE OF BIRTH & DEATH CERTIFICATE AND EXTRACTS OF RECORDS

- SALE PROCEEDS OF SWEPT MATERIAL / COMPOST

- LEASE AMOUNT OF WATER TANKS AND LAKES

- MAGISTERIAL FINES

- SALE OF FORMS

- AMOUNT REALIZED FROM AUCTION OF UNSERVICEABLE MATERIAL

- BURIAL GROUND CHARGES, ETC.

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Assigned Revenues• ENTERTAINMENT TAX - 90% OF ET COLLECTED BY COMMERCIAL TAX DEPT

• SURCHARGE & STAMP DUTY - 2% OF THE VALUE OF THE INSTRUMENT COLLECTED BY STAMPS AND REGISTRATION DEPARTMENT.

• PROFESSIONAL TAX - GHMC, GVMC & VMC

- REMAINING ULBS ARE NOT GETTING.

• NON-PLAN GRANTS - GHMC, GVMC & VMC

- PER CAPITA GRANT

- MOTOR VEHICLES TAX COMPENSATION

- PROPERTY TAX COMPENSATION

- OCTROI COMPENSATION

• NON-PLAN GRANTS COMMON TO ALL ULBS

  - MAINTENANCE OF ROADS

- ESTABLISHMENT COST OF MUNICIPALITIES / CORPORATIONS

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Plan Grants of ULBs• JAWAHARLAL NEHRU NATIONAL URBAN RENEWAL MISSION (JNNURM): 4

COMPONENTS

- UI&G

- BSUP

- UIDSSMT

- IHSDP

• (APMDP) – WORLD BANK-FUNDED PROJECT

- SJSRY/NULM

• INDIRA KRANTHI PADHAM (URBAN)

• STATE FINANCE COMMISSION (SFC) GRANTS

• MUNICIPAL INTERNAL ROADS

• ASSISTANCE THROUGH INTEREST-FREE LOANS

• ASSISTANCE TO NEW MUNICIPALITIES FOR DEVELOPMENTAL WORKS

• SUPPORT FOR PROGRAMME FOR WATER SUPPLY

• INTEGRATED LOW COST SANITATION (ILCS)

• SUPPORT FOR PROGRAMME FOR INFRASTRUCTURE

• PROVISION OF BASIC FACILITIES IN MUNICIPAL SCHOOLS

• FENCING OF PARKS AND PLAYGROUNDS IN ULBS

• GRANTS UNDER BACKWARD REGIONS GRANT FUND

• RAJIV AWAS YOJANA

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Other Sources / Initiatives

• LOANS - HUDCO

- BANKS

• TAX FREE BONDS

• TAX ON LAND VALUE INCREMENT (LVIT)

• SPECIAL ASSESSMENT DISTRICTS (SAD)

• VALORIZATION CHARGES

• DEVELOPMENT IMPACT EXACTION

• TAX ON INCREMENTAL FINANCING

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Improvement of Revenue Resources

• ENSURE ASSESSMENT OF ALL BUILDINGS AS PER NORMS • IDENTIFICATION OF UN-ASSESSED AND UNDER ASSESSED AND

CORRECT THEM.• ENSURE TIMELY REMITTANCE OF COLLECTIONS BY THE COLLECTION

STAFF.• ABC ANALYSIS OF DEMAND AND ARREARS.• FIXING OF TARGETS TO THE COLLECTION STAFF AND SEE TO

ACHIEVE THEM.• CROSS VERIFICATION OF ASSESSMENT WITH ELECTRICITY

DEPARTMENT CONNECTIONS LISTS AND WITH COMMERCIAL TAX DEPARTMENT.

• CO-RELATE NON-RESIDENTIAL ASSESSMENT DATA WITH TRADE LICENSES DATA

• EXTEND THE INFORMATION ON UN-AUTHORIZED CONSTRUCTION TO THE REVENUE SECTION AND VICE VERSA.

• COMPUTERISATION OF ALL TAXES AND NON-TAXES – SHIFT THE DATA ENTRY OPERATORS OF REVENUE SECTION THOSE WHO ARE LONG STANDINGS TO OTHER SECTIONS.

• ENHANCE THE COVERAGE OF TAX NETWORK OF THE MUNICIPALITIES.

• ARREST THE MISAPPROPRIATION AND LEAKAGES.

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Municipal Budget15

Budget Calendar for Municipalities

ACTIVITY NOT LATER THAN

•BUDGET INITIATION 25TH SEPTEMBER

•INSTRUCTIONS TO SECTION HEADS 01ST OCTOBER

•DRAFT BY SECTION HEADS 10TH OCTOBER

•COMPILATION AT ACCOUNTS SECTION 25TH OCTOBER

•DRAFT BEFORE COUNCIL 07TH NOVEMBER

•CIRCULATE AGENDA TO THE COUNCILLORS 08TH NOVEMBER

•COUNCIL APPROVAL 15TH NOVEMBER

•IF NOT APPROVED IN 1ST MEETING 22ND NOVEMBER

•SUBMISSION TO COLLECTOR 31ST DECEMBER

•FORWARDING BY COLLECTOR TO C&DMA 15TH JANUARY

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Budget Calendar for Corporations

ACTIVITY NOT LATER THAN

•BUDGET INITIATION 25TH SEPTEMBER

•INSTRUCTIONS TO SECTION HEADS 01ST OCTOBER

•DRAFT BY SECTION HEADS 10TH OCTOBER

•COMPILATION AT ACCOUNTS SECTION 25TH OCTOBER

•DRAFT BEFORE STANDING COMMITTEE 10TH NOVEMBER

•REVIEW AND APPROVAL OF STANDING COMMITTEE

AND PLACE BEFORE THE CORPORATION 10TH DECEMBER

•CIRCULATION TO CORPORATORS 15TH DECEMBER

•APPROVED BY THE CORPORATORS 20TH FEBRUARY

•SUBMISSION TO GOVERNMENT 01ST MARCH

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Income & Expenditure 2009-10 to 2013-14

18Rs.in crores

Property Tax Collection-2009-10 to 2013-14

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Rs.in crores

WORST PRACTICES20

NandyalaYemmignurMachilipatnamNidadavoleRajampetaKakinadaGajuwaka etc.,

Thank you

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