The Bruhat Bengaluru Mahanagara Palike (BBMP), the city’s municipal body, has presented a total outlay of Rs 11,163 crore in its annual budget for 2023-24. The budget underscores greater focus on flood mitigation measures, and targets a revamp of the property tax collection procedure for commercial premises.
Presenting the budget, Jayaram Raipura, Special Commissioner (Finance), BBMP, said that by way of flood control, Rs 55 crore has been earmarked for repairs and maintenance of primary and secondary drains, and Rs 35 crore for reviving 12 lakes.
For repairs and maintenance of stormwater drains, BBMP's budget estimate for 2023-24 is Rs 7,020 crore, while the revised budget estimate for 2022-23 is Rs 12,030 crore, almost 41 percent higher.
Property tax
According to his budget speech, property tax has been a major source of BBMP’s revenues. The property tax collected by BBMP, along with sundry cess, has increased significantly.
"In 2021-22, the property tax collection was Rs 3,033 crore, which increased to Rs 3,758 crore in 22-23, about a 24 percent increase year-on-year (YoY)," Raipura said.
He said a study was conducted to identify properties where homebuyers were paying commercial rates to Bangalore Electricity Supply Company (BESCOM) and other state agencies, but had not declared their premises as a commercial property to BBMP and was continuing to enjoy lower residential property tax rates.
"This has resulted in the identification of 12,699 cases and the imposition of a fine of Rs.134 crore. We will further levy about Rs. 250 crore of additional taxes on this amount," Raipura said.
Revamp of tax collection
"The property tax collection procedure in BBMP needs to be completely revamped. It is proposed to take up all self-assessment declarations by all major commercial buildings for detailed verification during 2023-24," Raipura added.
These self-assessment documents will be compared with corresponding documents of other state agencies with the help of specialised software. This is expected to lead to a substantial increase in property tax collection, he explained.
BBMP expects to collect property tax worth Rs 4,790 crore (including cess) in 23-24 . Excluding cess, which needs to be transferred to other government departments like health, education, etc. the property tax collection target has been set at Rs 4,412 crore. This target is 27 per cent higher than the amount proposed to be collected per the revised budget for 2022-2023.
Flood mitigation
BBMP has reserved Rs 55 crore for the repair and maintenance of primary and secondary drains to mitigate flooding.
The 183 lakes under BBMP's jurisdiction includes 35 new lakes that have already been developed. Further, 67 new lakes are being developed at a cost of Rs 200 crore. The development of 12 lakes will be taken up in 2023-2024, at a cost of Rs 35 crore.
Raipura said a total of 195 km of stormwater drains are being constructed, with concrete retaining walls to help speed up the flow of water. About 152 areas that were encroached upon near stormwater drains have already been cleared so far this fiscal.
"Apart from the incident of Savala Kere lake, near Sarjapura in eastern Bengaluru, overflowing and flooding the Outer Ring Road, there has not been any other major flood incident, in spite of a record rainfall of 1,958 mms in Bengaluru," Raipura said.
He added that there are 860 km of primary, secondary and stormwater drains under BBMP's jurisdiction, 580 km of which are stormwater drains. These have already been reconstructed and strengthened.
"Of the remaining 280 km, about 195 km has been taken up for development in 2022-2023, at a cost of Rs 1,920 crore. This is expected to be completed by the end of 2023-2024," Raipura added.
Experts welcome the BBMP budget
Namita Aggarwal, manager of municipal finance at the urban affairs thinktank Janagraha, says that the self-assessment verification for commercial properties was definitely a step in the right direction, but feels the same should have been extended to residential properties as well.
"Every property has its own unique identifier and based on that we can know the property value and the property tax value. BBMP should have had a simple website where one could’ve easily compared one’s property tax with the property," she added.
Additionally, Aggarwal said that BBMP should have increased the property tax component. "In developed countries, the property tax is 1 percent of the property’s market value. In Bengaluru's posh areas, where properties are priced between Rs 1-1.5 crore, residents are hardly paying Rs 4,000-5,000 as property tax, less than 0.1 percent of the market value," she added.
Sandeep Anirudhan, Convenor of the Citizens' Agenda for Bengaluru, welcomed the budget allocation for lakes, but added that detailed project reports for lake restoration need to be put out in the public domain, and that public consultation is essential before execution.
He also said that concrete retaining walls are best avoided as this prevents the percolation of water into the ground, worsening the flood situation. "BBMP needs to take technical advice from specialists and modify its stormwater drain design," he explained.
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