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How should the govt finance infrastructure building in Bangalore?

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silkboard's picture

Context: Yeddy thinking about it

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Refer this DH article.

  • “Initially we need Rs 5,000 crore for investment on infrastructure. I have approached Union Finance Minister P Chidambaram for money.  ..."
  • "BSY reiterated that those Bangaloreans belonging to middle-classes and above might also have to shoulder a “bit” of the responsibility, financially. He said he is holding discussions with officials on the possibility of imposing a cess without affecting the poorer sections ... "

The # Rs 5000 crore figure is interesting. Contrast this with Rs 3000 estimated for High speed rail to the airport (though that controversial project is supposed to be PPP). Is Rs 5000 crore going to be enough? What projects does he have on mind?

Before asking for a new cess, would Yeddy like to review the state of fiscal responsibility of BBMP and other local bodies? Are these local bodies tight enough to raise every rupee they can from the public? Remember, BBMP's collections are lower when compared to some other cities of India.

My vote is for a project based cess, or a usage driven cess. Like it is for the airport, we will be funding part of it via a UDF. We may similarly be paying for the construction of Metro, or BRTS, and we will do that via some high usage fee for an initial period of 5 years or so.

Infrastructure is not air, we all value it enough that we will pay for it. But before asking for a cess, a proof or display of fiscal responsibility is must. 

A blanket cess (to create a general pool of money for any project) is a big no no. Tell us the projects, debate their merits, and then collect a cess for the project majority of citizens say yes to. We don't want to pay for more ad-hoc flyovers or elevated roads or blind road widening projects.

Where are my taxes?

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Read this for your answer:

http://timesofindia.india...

 

Bang on the point

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Dude.... where do my income taxes go? I work on the "graveyard" shift in namma bengaluru and i wonder why the govt which claims that bengaluru pays the second highest taxes in the country does not do anything.....

Ever thought like above before? We'll, to put in it simple terms, only a small part of your taxes are respent on infrastructure in our city. The state does not get much, and the rest of the money goes to "BIMARU" states....

This is what Swapan Dasgupta said in the above article:

"Some people, it would seem, pay their hard-earned money in taxes while a small, privileged minority squanders and loots it recklessly. Most important, the system is not geared to apportioning accountability for expenditure. A politician in, say, Jharkhand doesn't give a damn for fiscal rectitude because he knows that the funds at his disposal have actually emanated from somewhere else."

Pratap Bhanu Mehta on this topic

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http://www.indianexpress....

vmenon's picture

of taxes and cesses!!

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so we get more cesses and cesspools!!

The truth as I know it is as follows.

The predominant source of income for bangalore is the property tax of which we have an abysymal collection history.

This was one of the logics on the CVS resistance.when there are a whole load of non payers /under payers how on earth is it fair to hike the rates for those who pay.The estimates are 50% tax compliance.Talk of subsidy!!here property tax payers are subsidising an almost criminal constituency , not the downtrodden as is the normal case for subsidy .

On income tax , the story is different.Bangalore IT amounts are huge but this is a central collection and given back amounts to states is a small portion , which does not keep in mind the current urban issues and funding required.

And the party in power in karnatka is generally the opposition at the centre!!

But after all the rhetoric ,( mine) , all of the above are are good but theoratical arguments.

If we want infrastructure quickly we will have to pay a cess.

silkboard's picture

squandering tax rupees and decentralization

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Cadambi,

Talk at national level, your argument is a logically correct line to toe, but you first have to look at some stats.

  • 2.5 cr (out of 100 cr) people paid taxes (source: 2002).
  • The number is estimated to be 4 cr now
  • People paying more than Rs 5 lakh towards taxes was only 3.65 lakh (2002). I bet there may be that many people (making > 20 lakhs pa, so taxes > 5 lakh) in Bangalore alone

With just 4% of the population paying taxes, the attention should be more towards to expand the tax base, as opposed to fighting over whatever little change is collected and distributed today.

Moreover, as Mr Menon says, there are ways in which our city can collect more revenues from its citizens. Property taxes - low compliance, and the rates too are low. Road taxes - we pay lifetime taxes, not usage based. Land transactions - we all know what we show to the state government, and what we actually pay.

Coming to the distribution of tax collection downwards, the question should be about responsibility and authority at local levels. X% of my taxes should come back to my local area, with a clear and transparent formula. And locality should be the boundary, not state.

A politician in a BIMARU state guzzling tens of crores via corruption, and a state legally spending hundreds of crores on short sighted projects like flyovers and exclusive high speed rails, they both lead to the same end result. Solution for all of this is decentralization - so that local areas get the power to decide what to spend the money on. Along with this power will come the responsibility to be transparent. And to go with all this, of course there has to be a system that puts back a somewhat fixed percentage of revenue raised from the area directly back for the development of that same area.

small caps's picture

(No subject)

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A full scale international airport was planned at Devanahalli, 30 kilometers from Bangalore. The project, initially conceived in 1991, was repeatedly delayed due to red tape and tussles between the private companies involved and the Central and State Governments.

And its because of Red Tape!!!can you prove that it was Red Tape that delayed the project. AFAIK, the delay if any was due to the fact that the concerned parties had some dispute(details of the dispute is beyond the scope of this talk page and even the article) the resolution of which took time. everytime there is a dispute/litigation/delay in a public infrastructure project doesnt mean it is 'Red Tape'!!

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