Urban bodies marked 31% improvement in property tax collection: Govt

The Union government on Monday told the Rajya Sabha that 3,695 urban local bodies (ULBs) across the country reported a cumulative improvement of property tax collection of 31% in the financial year 2022-23 compared to the previous fiscal.

This revelation came as minister of state for housing and urban affairs (MoHUA)Tokanu Sahu was replying to a question by TMC MP Nadimul Haque on steps taken by the ministry to address stagnancy in municipal finance.

The MoS said that the 15th Finance Commission (15th FC) has introduced reforms such as linking grant disbursements to property tax collection growth and encouraging transparency through the publishing of audited and provisional financial statements for public accountability.

Based on their performances, cities across states have got grants worth ₹76,580.90 crore in total during 2020-21 to 2024-25. He said 18 states were also incentivised by the ministry under Scheme for Special Assistance to States for Capital Investment 2022-23 – Part IV.

Further, the MoS said that under the flagship Atal Mission for Rejuvenation and Urban Transformation (AMRUT) 2.0, property tax reform is a mandatory condition focused on notifying property tax calculation, containing guidance value/ circle rate along with provision for its periodic increase. He also mentioned that under AMRUT, incentives of ₹315.83 crore have been given to cities for raising money through bonds between 2018 to 2024, which indirectly ensures efficient financial management.

Additionally, Sahu said aligning property tax floor rates with market rates, with periodic revisions in line with GSDP as recommended by 15th FC is a mandatory entry condition to be fulfilled by State/ UTs for availing Swachh Bharat Mission Urban (SBM-U) 2.0 funds. He also cited that the Smart Cities Mission (SCM) had pushed for innovative financing through which 195 projects amounting to ₹9,193 crore have been completed using public-private-partnership (PPP) models across 51 cities.

On the question of slow utilisation of central funds by cities, Sahu said that the ministry said funds are released only after satisfactory report from independent review and monitoring agencies. He said the utilisation of central assistance for AMRUT and Smart Cities Mission stood at 92% and 94% as of date since their launch in 2015.