Skip to Content

Business of Governance

With concepts like Autonomy, Sustainable growth, Forward Planning, HRD, etc becoming buzz-words in management circles, government babu’s couldn’t quite stomach the idea of being left out. So, they managed sponsorships for themselves to attend various seminars, workshops, and even full-time MBA courses, and worse still started introducing these concepts into their respective domains/ departments, irrespective of whether they fitted in with the overall government policy or not. Now, very clearly, much of the content in an MBA course, for instance, at least in the earlier times, was tailored to Corporates, with very little of it being applicable to government administration (Later, of course, IIMs, particularly Ahmedabad and Bangalore, started specific courses tailored to government administration). But, with the babu’s pursuing with them all the same, the damage slowly started getting done.

Time was when the Electricity Board (the predecessor of the BESCOM), and the BWSSB would give their respective connections only after the Occupancy Certificate was issued by the local Municipal authority, thereby ensuring compliance with the building by-laws to a much greater extent than today. Down the years, with the babu’s turning into management experts, the Boards started looking at themselves as ‘profit centres’, and the checks and balances of the earlier regime just crumbled, bringing in in its wake the chaos of the present day.

The sad part however is that controls continued in many other areas, pushing these organizations to the receiving end on very many fronts. The KPTCL and the ESCOMS (successors to the Electricity Board), for instance, do not have the power to charge remunerative rates to the farming sector, this leading to a subsidy regime whereby they have become totally dependent on the government doles affecting the entire sectoral economy adversely.

And, this is not confined just to the power sector. The Transport Department, for instance, draws up its annual budget based on the growth plan for its staff, the revenue shortfall being made up by release of fresh licenses for autorickshaws, unmindful of the additional chaos that it wreaks on the already dismal city traffic scenario. The Pollution Control Board charges its so-called ‘consent fees’ in far higher proportion compared to the actual work it is required to do, and blows up the revenue generated in putting up fancy office complexes in prime commercial locations. And, so on.

The imperative need of the day is for the government to redefine its role to being a facilitator, and thereafter as the regulator, for which ideally it needs to give up its role as a player. Simultaneously, it needs to become far leaner in its operations, down-sizing drastically wherever required, as also evolving a cost plus approaches compared to the present-day revenue oriented approach.

Muralidhar Rao
PS: This was published in my personal blog in March, '08. It remains as valid today as illustrated by the example below.

murali772's picture

Vehicle tax collection example

The State government is not likely to reach the target in motor vehicle tax collection also, courtesy - economic slowdown. Against the budgetary target of Rs 2,098 crore for 2008-09, the Transport department has been able to collect Rs 1,366 crore till January 2009 end. The department has to mop up Rs 732 crore in the remaining two months of the financial year to reach the target. The Transport Department Secretary, Sri H S Shankarlinge Gowda, states that he has taken all necessary steps to plug the loopholes and ensure that the target is reached. “We are now working overtime to increase the revenue. Even if there is shortfall at the end of the year, it will be very marginal,” he stated.

For the full story, click on:

That motorised vehicles are being added on to the city roads at an unsustainable rate of over 1300 a day is of no concern to the Transport Department. Their job is to set ever-increasing targets and achieve them, very much like the Corporates. Atleast the Corporates are beginning to review their approaches; but, sadly, not the government departments.

The answer here perhaps lies in bringing the Transport Department under the BMLTA.

Muralidhar Rao

Muralidhar Rao
s_yajaman's picture

Vehicle tax collection - simpler solution

How exactly will hard work  and working overtime help here?  Private companies make and sell cars; consumers buy them.  By all accounts, car sales are down.

I offer him a simpler solution

a. There are 500,000 cars in Bangalore.  Put a Rs.10000 annual tax on each car starting this year.  That is Rs.500 crore

b. There are 15 lakh two wheelers in Bangalore.  Put a Rs.2000 tax on each two wheeler.  That is another Rs.300 crores. 

c. Put a Rs. 20000 tax on all yellow board cabs (they cause twice as much havoc as individual cars) - Rs.50 crores

He has his Rs. 850 crores.  And does not have to depend on any new car sales.


PS : BDA is another example of how a city can be ruined in search of government body profitability.  They have not left any space for playgrounds, parks, setoffs in the new layouts. 

Drive safe.  It is not just the car maker which can recall its product.

idontspam's picture

What loophole?

Sri H S Shankarlinge Gowda, states that he has taken all necessary steps to plug the loopholes and ensure that the target is reached

What loophole is he plugging?

Naveen's picture

Annual Vehicle Tax - A Must

I could'nt agree more with what Srivathsa says above.

Vehicle taxation was converted to life-time by Devegowda when he was CM with the idea that he could mop up huge amounts quickly during his tenure. The regimes that followed continued with this blindly, without analysing the disadvantages & long-term implications.

This has encouraged people to buy & use more vehicles than necessary as there are no annual costs for vehicle ownership, other than insurance.

What is now needed is the re-introduction of Annual Tax on Vehicles (at high rates, much higher than ever before) & spot checks at street corners & at signals, similar to scrutiny being carried out by the traffic police for licenses & insurance certificates, etc..

Rithesh's picture

A better way to collect road taxes

I am not sure if the the flat tax system suggested by Yajamana is the best. It simply penalizes anyone who owns a vehicle - irrespective of how much he uses it. It does not differentiate between a car owner who would use his car for 200 KM/month and a car owner who would use it for 2000 KM/month. Everyone wants to own a car these days :).

I completely agree that the road should be an annual tax. An alternative would be to tax the vehicle owner based on the usage. We could have different tax slabs, with taxes incrementally increasing (or even exponentially increasing) as usage increases. Something like our income tax slabs. This would encourage current vehicle owners also to switch to public transport apart from discouraging prospective car buyers.

The taxis could be taxed on a flat tax rates.
Sudhirgota's picture

Yes the idea of annual tax

Yes the idea of annual tax is good. But the better idea would be to look into Hongkong syndrome. 89% of people use public transport. Why? 1) Its accessible. By 1993, 50% of population was within 500m from a MTR station. 2) Fuel Price. It has the highest fuel prices in Asia :-) 3) Parking Costs - An average car owner spends 1920 $ on parking fees and 1620$ on fuel... With such a high parking and fuel costs, they simply don't use the private vehicles and use the public transport which is accessible. It also serves as a means to discourage ownerships. Now how many $/Rs we pay for parking???? If you make the ownership costly and make the driving cheap, there are chances of having rebound effect.
Naveen's picture

Many more Like HongKong


Thanks for the Hongkong stats. You could have included one more important point about Hongkong MTR - it's the only Metro system in the world that generates profits, year after year.

It is'nt just HongKong where fuel & parking are deliberately kept high to restrain road traffic.

Singapore manages by making purchase & driving cars expensive through a highly efficient Travel Demand Management (TDM) that includes an annual quota system & congestion pricing.

Many cities in Scandinavia (Norway, Sweden, etc) discourage cars with congestion /cordon pricing. London has congestion pricing charges, too.

Latin American countries, where the most successful BRT systems are in operation, discourage road traffic by offering top priority for bus movements.

NewYork (Manhattan), depsite it's recent failure to introduce congestion pricing, has very high parking costs apart from one of the most elaborate subway systems.

s_yajaman's picture

@ Rithesh


You have to also keep things simple enough.  How do we know how much a person has driven?  We then have to have a odometer check once a year.  Leaving too many things to an officer's discretion is not a bright idea.   Provide every car a sticker that needs to be put up on the windscreen.  Green for 2009, Red for 2010, Yellow for 2011.  That way not even a need to stop every car.

One can have weekend only cars for lower tax rates and have a Red license plate number as in Singapore.

The other way to tax based on mileage is to increase the price of petrol only within Bangalore.  That tax cannot be avoided and the cess goes partly to BBMP and partly to BTP and partly to transport department.  Considering that 200 million litres of petrol are sold each year in Bangalore there is scope to earn money by taxing petrol.

Parking is another very important source of revenue.  I just cannot understand how that is kept free.  There are very easy ways to manage this.  In Singapore one buys parking coupons and display them on the windscreen when parked.  Holes are punched to ensure that they cannot be re-used etc.  Parking wardens go around to check if cars have been parked without these.

Cars transport a 70 kg man in 1000 kg of metal.  They have to be discouraged or at least made to pay the proper social costs if they are to be owned.  They are a privilege and not a right.



Drive safe.  It is not just the car maker which can recall its product.

Rithesh's picture

Yes implementation might be a challenge

Yajamanare - rightly said, implementing the system that i proposed might be a challenge, considering that fact that we are morally very advanced and we wont attempt to tamper the odometers :)

But frankly if the system does not differentiate between a heavy user and low user, it may not be easily accepted by the public or the govt.

The ultimate aim here is to discourage private transport and there is not single way we can do it.

Your own suggestion of higer taxes on petrol can infact also solve the implementation issue of variable tax system that i suggested. What i intended was to tax a user based on his usage - so the tax could be part of the fuel cost. That way heavy users (with higher fuel consumption) will pay more taxes and less user will pay less taxes. Also this will encourage people to use more fuel efficient vehicles - since the tax will depend only the fuel consumed - helps the environment also.

In case of diesel vehicles - seriously i would want the govt to ban diesel cars - but since that wont happen we can alternatively impose high fixed taxes (payable every year) on diesel cars apart from tax on the fuel. The goods vehicles could be exempted from this fixed tax. The whole idea behind lower diesel prices is to subsidize goods and public transport vehicles and we should not disturb this.

Also parking charges should be made high as suggested by you and others. In any case at most places people are forced to pay parking charges by those illegal parking space maintainers. Why should the govt lose money? comment guidelines

Posting Guidelines apply for comments as well. No foul language, hate mongering or personal attacks. If criticizing third person or an authority, you must be fact based, as constructive as possible, and use gentle words. Avoid going off-topic no matter how nice your comment is. Moderators reserve the right to either edit or simply delete comments that don't meet these guidelines. If you are nice enough to realize you violated the guidelines, please save Moderators some time by editing and fixing yourself. Thanks!

about seo | forum