RBI report
Municipal corporations should charge adequate user charges on essential services like water supply and sanitation to raise non-tax revenues and provide quality public services. This was said in a report of the Reserve Bank of India (RBI). The ‘Report on Municipal Corporation Finance’ takes an in-depth look at the fiscal position of 232 municipal corporations (MCs) from 2019-20 to 2023-24 (Budget Estimates). In this, special attention was paid to the topic ‘Own Sources of Revenue Generation in Municipal Corporations: Opportunities and Challenges’.
You can increase revenue in this way
According to the report, “Municipal corporations can significantly increase non-tax revenues by imposing fair and adequate fees for essential services such as water supply, sanitation and waste management. “By doing so, uninterrupted availability of high-quality public services can be ensured.” These measures, coupled with more transparent and accountable governance practices, can contribute to strengthening the financial health of municipal corporations, the report said.
What charges can be imposed?
According to the RBI report, if this can happen, it will start a cycle of better services for the public, stronger revenues and continuous upgrading of urban infrastructure. The main non-tax revenue sources include user fees, trade license fees, layout/building approval fees, development fees, betterment fees, sales and rent fees, market fees, slaughterhouse fees, parking fees, birth and death registration fees. Sources of tax revenue include property tax, vacant land tax, water benefit tax, advertisement tax, sewerage benefit tax, tax on animals and tax on vehicles.
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