UN Awards Bihar's Failed Tax Model

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Bihar tax model gets UN award, and many takers

Nirmala Ganapathy

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Patna, December 24: The Patna Model of Taxation that won a UN award

this year and is being adopted in other Commonwealth countries today

fetched $30,000 for the cash-strapped Bihar government.

 

State Chief Minister Rabri Devi — on behalf of the Patna Municipal

Corporation (PMC) — accepted the cheque which was part of the award

given by the UN-Habitat's 2002 Dubai International Award for Best

Practices to Improve the Living Environment.

 

The model, which is among the ten award-winning initiatives selected

this year, has not only been adopted in Uttar Pradesh, Karnataka,

Gujarat, Madhya Pradesh and Tamil Nadu but also in other countries

like Sri Lanka and a host of African countries now.

 

A committee has now been constituted in Delhi to study how it can be

adopted in the national capital. Union urban development ministry

director S.K. Singh, who pioneered the system when he was

administrator of the PMC in 1993, had collected the award in November

for the property tax system and presented it to the government today.

 

``We received a gold trophy and cash award. An offer has been given to

the National Museum to house the trophy and it was decided that the

cash award should come to the state which pioneered the system,'' said

Singh.

 

RJD chief Laloo Prasad Yadav announced at a press conference that the

money would go towards building a hostel for women in Patna. But he

also pointed out that the system was not being implemented properly

and said that certain localities still didn't fall within the ambit of

the property tax system.

 

The system — that was notified in 1993 and implemented in 1995 in

Patna — introduced a model of 3x3x3 assessment system by which

properties were classified according to location (main road or side

road), construction and use (commercial or residential). So those

owning a commercial property on a principal main road had to pay Rs 54

per square feet. The rates varied according to each classification.

People in Patna paid from the highest property tax in the country at

43.5 per cent to the lowest at 9 per cent, Singh said.

 

However, PMC administrator A.B. Prasad said that though revenue has

gone up every year, the PMC is still not able to sustain itself and

that collection needs to be increased.

 

In 1993, evaluation for the collection was set for Rs 35 crore but it

only jumped up from Rs 4.53 crore to Rs 16.5 crore. Till November last

year, the collection was Rs 6.5 crore while this year it has jumped to

Rs 12 crore. He said that efforts are being made to plug the

loopholes. Singh said this award had been given to Ila Bhatt in 1996

for the Self-Employed Women's Association, in 1998 to Surat for

becoming a model city and in 2000 to Sulabh International.