District Improvement Charges

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Urban DevelopmentGovernance

With BBMP running out of money & unable to present a coherent budget, city improvement programs have reached a dead end. While congestion charging can provide money for development programs & also reduce congestion it needs technology investment & infrastructure work to plug holes in the congestion chaging cordon. There is also this additional question of how do we ensure the money goes to Public Transport or NMT & not to more flyovers & congestion causing schemes or worst into the personal pockets?

One way to have a quick start is to focus on generating money by starting a CBD levy. This levy will be a fixed yearly fee of lets say Rs1000 on Private 4 wheel vehicles. Autos, commercial yellow board vehicles, taxis, 2wheelers will be exempt. They will be given a permit sticker which will be put on the dashboard & will be enforced like a parking violation. All vehicles which enter a predefined area in the CBD will need to have that sticker or pay a fine for not having the sticker. The money generated can be used to procure buses which will run inside the charging area. People who dont have a sticker can park along the periphery of the area, hop on to these buses & travel within the ideitified area. The money can also be used to fund NMT works within the area. For people already living within this cordon the sticker can be given at a discount or free provided they promise to park in their garage & not on the street. We need to ensure that the agency collecting this levy has a seperate fund which is used only for this purpose.

Once the infrastructure has stabilised, the area of this levy can be increased & also the payment moved to a per use basis so true congestion reduction can occur. 

What say?

Comments

Challenges

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1. Identify the area so that people can get across without having to compulsorily cross this charge zone. 

2. Ensure that appropriate measures are put in place for the money to be put to the right use. 

3 Stickers should be tamper & copy proof

 

reliable PT necessary

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as discussed earlier..we will need a reliable and fast PT option available before we can start congestion taxing vehicles..think metro phase I completion is atleast necessary for this..

also about the point 1 above, its way too difficult to carve out reliable alternate routes in this poorly planned city..so not sure we can stop ppl really from crossing CBD area..

Re-introducing annual motor

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Re-introducing annual motor vehicle tax that is under state govt's ambit should go a long way in improving finances by sending a certain percentage to BBMP and remaining to transport dept. When nothing (roads, signages, bridges etc.) lasts forever nor is interest paid one-time, what is the point in collecting "life time" vehicle tax? Whether corruption is one-time or yearly doesn't matter as it will always exist. It is like having life-time property tax ... Also, the fines for traffic violations should be tied to inflation and increase yearly or twice-yearly to fill the traffic polices' coffers (than the constant and pathetic Rs. 100; how about minimum Rs. 1000 with 5% annual rise). Again, simple tweaks than drastic solutions.


Simple revenue genarating solutions

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N: Quite correct.

Though the city has the second largest number of vehicles in the country, revenue generation through fines & parking is very poor & needs far more attention.

Instead of preparing annual budgets with castles in the air, strict & simple day to day enforcement has the potential to bring in huge revenues, but ways to address corruption to prevent siphoning off of revenues is being neglected as it is made out to be more difficult than it actually is. It isn't just corruption in BBMP - the powers that control it, including the advisors /experts /panels all get drawn in for capital-intensive solutions, apart from playing into the hands of the car lobbies, to leave the city crippling & over-run by excessive traffic & rampant building code violations.

For eg. cars were allowed on MG rd during Metro work whilst buses were re-routed, causing distress to so many bus users.

The need of the hour is to intensify property tax collections (especially commercial properties), enforce building bye laws with annual recurring penalties (until violations have been set right), bring about an annual vehicle tax (including a cess for flyovers & bridges) & increase fines to levels that actually deter people from habitually violating rules.

This apart, the re-routing of revenues generated into infrastructure projects must be in a closed loop & not with the usual "aggregate" approach that is dependent on the state govt which controls funds as convenient for 'vote-bank' schemes.

Road tax vs DIC

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While road tax applies to all vehicles the purpose of a seperate district improvement charge is to target them only to private 4 wheelers for now & use it to expand flexibly to vehicles that we deem cause congestion from time to time. The other benefit is to keep this out of formal tax channels which go elsewhere & create a new fund which can be pushed where it is needed.

Once people get used to the idea of paying a fee we can convert it over time to a pay per use cordon pricing. Easing ourselves into this is better than thrusting cordon pricing down the throat of people who dont get the concept in whichever way it is communicated & will always look at it with conspiratory eyes. People dont even get the concept that road widening doesnt solve problems, cordon pricing will just go over their SUV tops.

Cess ?

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target only private 4 wheelers for now 

A cess collected with road taxes to take care of this might be the best. Additionally, the 2nd hand car (& 2-wheeler) market is now very huge (even bigger than the new car market). Some checks are necessary here - for example, charge an environment cess for vehicles older than a certain period & also at each ownership change.

Vehicle taxes in India are already high & ownership of a corolla is equivalent to owning a mercedes abroad in terms of purchasing power parity & additional taxes (when combined), but unless recurring costs for ownership are imposed, their numbers will always remain out of control.

This wish ... how about

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This wish

... how about minimum Rs. 1000. ...

has been granted.

Extracts from DH article:

Besides increasing the fine for using mobile phones or iPads while driving to Rs 500 for first-time offence and Rs 2,000-5,000 for subsequent instances, ....
For over-speeding, it has been proposed to increase the fine from Rs 400 to Rs 400-1,000 for first offence, and from Rs 1,000 to Rs 2,000-5,000 for the second. Subsequently, the penalty could be as high as Rs 5,000.

In case of a death in a road accident, the compensation is proposed to be hiked from Rs 25,000 to Rs 1 lakh. In case of serious injury, compensation will be Rs 50,000.

The wide-ranging proposals also include a Rs 10,000 (first-time offence) fine for vehicles plying without valid registration plates and Rs 20,000 for second offence which, under this category, will invite jail for six months or Rs10,000 fine or both or cancellation of licence.

The hefty fines’ regime has been proposed as the country has the dubious dictinction of more than 1.4 lakh deaths caused in traffic related accidents.

Very spooky when govt. grants wishes this quick again ;-) Now, if they just link all fines to inflation to auto-increase ...