Work > Municipal Finance > Own Revenue Augmentation

Own Revenue Augmentation

2021-ongoing

Building financially sustainable cities through policy reform

Janaagraha partners with union, state, and city governments to augment city revenues through a ‘Whole of Systems’ transformation of the property tax lifecycle rather than a piecemeal approach. This is currently adapted to improve fees and user charges too.

Program Details

Janaagraha worked with the Ministry of Housing and Urban Affairs to develop the Property Tax Reform Toolkit, a comprehensive study of property tax in India that offers a reform roadmap for the future. The toolkit adopts a ‘whole of systems’ approach, recommending reform for all five stages of the property tax lifecycle – from enumeration, valuation, and assessment to billing, collections, and reporting. It also includes best practices in each stage from cities across the country.
Through our work, we created an assessment framework for additional borrowing of 2% of GSDP under the AtmaNirbhar Bharat Scheme and offered policy design support to 13 states to reform property tax valuation. Of these, 11 states qualified for additional borrowing eligibility of INR 16,000 crore 

We partnered with the Municipal Administration and Water Supply Department to draft property tax and professional tax rules for all 780+ Urban Local Bodies under the new Tamil Nadu Urban Local Bodies Act reinstated in 2022 (June 2022 onwards). The objective was to bring procedural clarity to citizens and tax administrators to prevent revenue from being trapped in legal disputes and to enable tax compliance. We created strong administrative provisions for recovery of tax dues from defaulters, improved the assessment and valuation methodology, increased the property tax net to cover leased municipal lands, unauthorised buildings, and government revenue land allocated under various schemes, and also introduced enabling provisions for self-assessment etc.

Janaagraha also conducted the Municipal Premier Leagues (MPL) across the cities of Odisha and Coimbatore (Tamil Nadu). MPL is a competition for revenue collectors across 4 revenue streams, including property tax and water charges. The key objectives are to facilitate data-driven decision-making by city leadership, increase own revenues, improve the tax-paying habits of citizens, and recognize the contributions of revenue officials. 

impact

  • Unlocked additional borrowing eligibility of INR 16,000 crore for 11 states qualified through the AtmaNirbhar Bharat Scheme
  • MPL in Coimbatore led to an 11.1% increase y-o-y in total revenue across 4 competition revenue streams and an absolute increase of Rs. 32.9 crores to reach Rs. 329.4 crores in FY 21-22. 
  • In Odisha, it led to a 35% increase in property tax in 2020-21 over FY 2018-19 with an increased fiscal headroom of Rs. 37 crores in 2 years.

learn more

A Toolkit for Property Tax Reforms.

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