Property taxes in Indian cities are low. A typical well-managed global city would expect its citizens to pay somewhere between 0.6 to 1.2 per cent of the value of a property each year as taxes. For example, if your flat is worth Rs 1 crore, then it’s quite likely you’d cough up somewhere in the neighbourhood of Rs 75,000 a year to the local body. In Bengaluru, we barely manage one-tenth of this. Other Indian cities fare better, but still do not approach world standards.
At the same time, the public is quite unlikely to support a hike in property taxes, beyond the small increases that are introduced every few years. There is wide-spread anger at the BBMP for ‘wasting’ the little money that it already collects, and most taxpayers are certain that they would only be contributing to more corruption by paying more taxes. The fact that nearly half the property owners don’t pay tax at all further inflames this anger.
So, what’s the way out? The answer lies in letting people spend money without giving it to the municipality, through self-management arrangements in neighbourhoods. Hundreds of parks in the city, and some lakes too are already managed by local RWAs. More than a million residents who live in managed apartment blocks and communities already pay significant amounts of money as maintenance fees that are self-administered. These suggest a way forward -- people are willing to spend money on positive outcomes, if they believe the processes to get to those outcomes are credible.
A few years ago, the BBMP did introduce a scheme for local management of public spaces, but it was aimed at corporates and their CSR money. That’s bound to be concentrated in specific localities. Instead, what would be more useful is a council-authorised scheme in which all localities can participate with consent and monitoring being the responsibility of the newly proposed ward committees. The BBMP council and the state government could find a lot of new money for the city by choosing this path.
(The writer is an urban expert who works on finding solutions to governance issues)