New fuel cess, stamp duty hike to fund Rs 2.3 lakh crore Comprehensive Mobility Plan

Officials have suggested a slew of measures to muster the estimated Rs 2.3 lakh crore to implement the Comprehensive Mobility Plan 2020.

The suggestions include additional cess on fuel and motor vehicles, hiking stamp duties and pushing for public-private partnership.

Parastatal agencies like BBMP, BDA, BWSSB, Bescom, BMRCL and others can increase their revenue collection by periodical hiking of taxes, fees or user fares while borrowing from the market to make up for the deficit.

About Rs 50,000 crore is envisaged to be spent on road widening, elevated corridors and the Peripheral Ring Road (PRR), while Namma Metro and dedicated suburban rail corridors will come up to Rs 42,925 crore.

Some projects are likely to cost more than the estimate since the calculations in the document are old. The estimate made for PRR, for instance, was Rs 12,012 crore. While it has already been revised to Rs 21,000 crore in the recent calculations, its costs are expected to escalate further.

Revenue generation

The CMP suggests increasing the cess on motor vehicles from the current 10% to 20% and hike the surcharge on stamp duty and registration fee on land transaction from 2% to 10%.

The Transit-Oriented Development (TOD) plan, which is in the works, is also seen as an important instrument for revenue generation. The government has been suggested to collect a part of the land value appreciation rates in the zones positively impacted by TOD. Floor area ration in this zone will also be increased, allowing for more development activities.

Commuters will be driven to public transport not only by the cess on motor vehicles and fuel, but also by congestion fee on select roads during peak hours and graded parking fees that goes up according to the location.

The CMP recommends the formation of a separate Bengaluru Infrastructure Fund (BIF) to which collections of the cess, taxes and extra budgetary resources should be transferred.