Property tax is the single largest source of revenue for municipalities, and compliance in India is not anywhere near 100%, whereas cities in advanced nations take universal compliance for granted. Bangalore, for example, has around 5.4 lakh properties in the system (the census estimates provides a number closer to 7 lakh properties). With only around 60% of the properties paying taxes, the 2002-3 collections were around Rs.200 crores, well below what the revenue stream should be. The situation is similar in other municipalities all over the country, state to state.
A new public-interest partnership in Karnataka is addressing precisely this problem. Only one year old, and founded by Srikanth Nadhamuni (a 14-year Silicon Valley veteran) and Infosys CEO Nandan Nilekani, Bangalore's technology non-profit eGovernments Foundation is working with the Directorate of Municipal Administration (State government coordinator for Karnataka's Municipalities) and the Survey of India, the apex central government mapping authority. The partnership aims to improve the tax collections using geographical information systems (GIS) based property mapping and has already begun seeing results.
"Many processes within our municipalities are arcane. Older slower technologies and communications tools are in deployment and there is also the general absence of relevant specialized technologies that make systems work better," says Nadhamuni, software architect for the new system and also the managing trustee of the eGovernments foundation. He then refers to the fact that none of the municipal governments on India are using systems such enterprise resource planning (ERP) and customer relations management(CRM) -- customized for governments -- even though it simply is in the public interest that they do so.
Nilay Mitash is the top bureaucrat at the DMA, the state government's representative in this partnership. "This project is a big ticket item. It is not a simple computerization project. The entire business process of the revenue departments at over 50 municipalities in the state is now being reengineered. Until now municipalities did not have a comprehensive property register that listed all properties (legal or otherwise) and their accurate details. The current registers are used for assessing legal properties and there is no way to track illegal properties. Assessment targets have always been around 50% off the mark. A complete listing of all properties for 57 municipalities is being developed. It will be fairly straightforward to identify illegal properties, after that. Recreating the property books is a crucial part of the entire effort", says Mitash.
Survey of India's Karnataka Geospatial Data Centre, Bangalore.
"The Survey of India is developing comprehensive maps of the urban areas that span the municipalities. Digital photographs of all properties will be added to our database. A methodology for tracking legal and illegal properties is being worked out", says Mitash. As per the Karnataka Municipal Act, illegal properties are to be taxed at twice the amount as legal ones. Since a large number of properties are yet to be legalized, it is not surprising that Mitash is optimistic and unhesitating about forecasting revenue increases across the state.
P V Rajasekhar, who oversees responsibilities for this project at the Survey of India's Karnataka Geospatial Data Centre (KSGDC), exudes the same optimism as his counterparts at the eGovernments Foundation and the DMA. "While the SOI has done large mapping projects in the scale of 1:1000, 1:2000, 1:5000, etc. in the past, some even in Karnataka, our focus was mainly on the 1:25,000 and 1:50,000 scale topographical mapping", admits Rajasekhar. (Small scales have less detail and areused for district and state level maps). "We could have done detailed surveys for municipalities before, but there is little point of that unless the government bodies are able to use the data in a system. This project is meaningful and historic because it is the right combination of the right people at the right time. We are currently surveying over 50 municipalities (excluding Bangalore) at the level of individual properties and their boundaries. This sort of data has never been collected before anywhere in India, with perhaps few exceptional special projects".
Along with property surveys, the KSGDC is mapping roads, footpaths, power lines, trees, and even manholes for the 56 municipalities. The SOI has the professional expertise for the job, but not the manpower. The field staff is coming from the municipalities themselves and the state government. Rajasekhar's group at the KGSDC is conducting the training and back-ending the data collection. The data will be used to build a geo-database for urban Karnataka. eGovernments foundation is building the software technologies so that ULBs (urban local bodies -- municipalities) and other government organizations can access this database for activities ranging from assessment of taxes to public policy planning. Mapping at this level of detail is new in India, and will result in a database which provides far greater leverage for planners and decision makers. It will also remove the various information blackholes that are being exploited by several quarters in society.
Rajasekhar with members of his team at the KGSDC.
The SoI has had its challenges. Early on, the KGSDC ran into a hurdle in the dissemination of collected data due to a national-security rule. This is because exact geographic positioning information has to cleared for availability before it is placed in a geo-database for public consumption," Rajasekhar points out. Developing a system that gives the exact locations of any installation could compromise national security because this could get into the wrong hands, he says. The surveying is being managed in such a way that the positioning information (for example, for corners of buildings) would be located on an internally consistent local coordinate system for each city, even though the true geographic position will be hidden. Rajasekhar and Nadhamuni have jointly designed a special Urban Data Model that takes Indian conditions into account.
Technology interventions are not new to our governments. They often come in the form of 'computerization'. But there has always been a huge mismatch between the demands of newer systems and the capacities of those who turn the wheels within, and this hurdle has never really been crossed in India. This partnership is different on that front as well. Matched with the new software and process for the municipal governments, a fairly significant capacity building exercise has been mounted by the partners and is ongoing.
One serious problem is that our governments do not have human and knowledge capital of high calibre, and capacity building is a dire necessity, is Nadhamuni's general assessment. In line with this, the tech-NGO is doing training for several levels of staff within the municipal system. Bill collectors, assistant executive engineers, mayors and presidents of municipalities, commissioners, revenue officers, nodal officers, and senior/junior programmers are being trained in a series of programs.
In addition, the government's Urban Development Department (UDD) has hired 60 Infotech staff to be positioned in the 56 cities as the reengineered property tax program takes off. They are being trained on the eGov applications and technologies which they will help deploy and manage. Also a 'Nirmala Nagara Computerization & GIS' workshop for over a thousand revenue dept officials from 56 cities was held on Feb 18th.
eGovernments foundation conducting a training session for the state government's new hires.The DMA agrees. "For the first time there is the acceptance that the quality of human resources within our governments and municipal bodies is poor", says Director Mitash. He points out that engineers from the 56 municipalities have been trained in this project. "New engineers have been appointed on 2-month contracts for field work such as street surveys and numbering. There was a shortage of 300 civil engineers as well and these positions are now being filled. Cadre and recruitment clearances have been taken from the government. We expect to complete the survey work for all 56 municipalities that we have taken up by March-April."
All of this costs money. The state government's Urban Development Department (UDD) is participating through the Nirmala Nagara Yojana. The Asian Development Bank (ADB) is also funding Nirmala Nagara to the tune of US $5 million. But the partnership itself is rooted in the public-interest. eGovernments Foundation is providing 21st century based open-source software technologies and IT consulting services free of cost to the governments as part of its non-profit proposition. The Survey of India is footing half its own bills, and the state government is paying the rest. Interestingly, because Bangalores municipality is not part of the states Nirmala Nagara program the GIS system is not being developed for Bangalore. (The states apex city though has already deployed the eGovern property tax system, without GIS).
"The cost of training human resources will work out to around 5% of the total increase in property taxes we are going to see. This is a return well worth the investment. Municipalities are not paying for this now, maybe later", quips the DMA Director.
Systems for better governance
Still, this is only the beginning. The real results are assessed best when they come. Public life and government projects generates so much cynicism in India that there will always be the skeptics who argue that even the best systems will be run into the ground from within. What is eGovernments' response? "The systems we are building for Karnataka' s municipalities are to simplify running of the city itself. A system will not run into the ground if the citizens like it and it has been relevant and useful in their lives -- whether it has to do with property tax filing or birth and death certificates or public grievance handling. We'd like to enable governments to serve citizens better", asserts Nadhamuni, upbeat about the prospects.
But if there is one thing about this approach that stands out and perhaps cannot be overemphasized enough, it is the capacity-building exercise. "The challenges of problem-solving are immense at every level", says Nadhamuni. Right from the beginning, when the foundation created the partnership, it has been focused on not just delivering technology but bringing better capacities into the municipal system.
The unique promise of the initiative for its breakthrough level low-costs has already attracted attention from other states. The project also caught the attention of Joseph Stiglitz, Nobel Laureate in Economics (2001). Best known for his book "Globalization and its discontents", Prof. Stiglitz was recently in Bangalore. Visiting the eGovernments foundation, he endorsed the development the new municipal revenue systems.
The intervention is already beginning to pay off for the Bangalore and Byratyanapura municipalities. There is an increase in collections, and there is serious expectation that revenues may double in 2004-5. By itself, this isn't surprising. A back of the envelope calculation : 3 lakh properties in a city like Bangalore alone are now paying 200 crores annually to the city municipality. As the other 3 lakh properties are made to comply, revenues are bound to rise significantly.
The 21st century is seeing India turning a new corner in its development process. Technology and high-calibre professionalism are now being made available to our municipalities and state governments in ways that have perhaps never been seen before. In turn, responsive and equally progressive officials within governments and government agencies are stepping forward to stomach the scaling challenges.