BBMP can generate 6 times more revenue: Study

The Bruhat Bengaluru Mahanagara Palike (BBMP) can generate six times more revenue compared to its present earnings, researchers have found, an outcome that once again points fingers at the crippling inefficiency of the tech hub's civic body.

Researchers at the Institute of Social and Economic Change (ISEC) came to the conclusion by analysing the Bruhat Bengaluru Mahanagara Palike (BBMP) budget and the Karnataka Economic Survey from 2013-14.  

Their analysis found that the BBMP’s revenue from its own sources (predominantly property tax) is on average close to 1% of the city's GDP.

The poverty of the BBMP stood out in contrast to international cities such as London, Tokyo, New York, Johannesburg and Sao Paulo whose civic bodies, according to researchers, are generating close to 6% of the city's GDP.

The results were outlined in the research paper ‘Are Indian Cities Generating Sufficient Revenues? The Case of Bengaluru’.

“As the city’s GDP grows, there is pressure on the local government to provide better infrastructure to match the growth," Sukanya Bhaumik, the co-author of the research paper, told DH. "Considering this, ideally, it is said that the local government’s revenue through its own sources should increase with an increase in the city's GDP. But that is not the case with Bengaluru.” 

The BBMP's litany of failures include lower valuation of properties, failure to bring all properties under the tax net and a lack of will to crack down on defaulters. 

“The basic problem, at present, is that there are no fixed standards to judge the city’s revenue capacity. We need to follow normative principles for assessing the city's revenue capacity," Professor Kala S Sridhar, co-author of the research paper, told DH.

To buttress her point, Sukanya pointed to the central government’s economic survey of 2016-17, which said that Bengaluru was collecting way less revenue than its potential.

“The economic survey included satellite images and such data that showed that many properties were not even being assessed,” she said. 

A citizen survey by the researchers also showed that nearly 70% of the respondents were willing to pay higher taxes if the civic body provided better infrastructure.

Experts said that a lack of accountability and transparency had kept many citizens away from paying taxes since many of them perceived that there was hardly any infrastructure development.  

“It has now become a vicious cycle. The BBMP is not able to improve the infrastructure since the revenue is low and people do not want to pay till the infrastructure is better. This has to be broken with a structural reformation,” Sukanya said. 

In 2023-24, BBMP collected close to Rs 3,900 crore in property taxes. Going by the analysis, the revenue gap for just this year comes up to Rs 19,500 crore.