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| National Institute of Urban Affairs (NIUA), New Delhi

Titl e of Best Pract ice:

Aasthi - GI S Based Propert y Tax I nformati on System

State/City: Karnataka State Municipal Administration

BP Code: URF-##-09-1400-0511

Previous Status

Property tax is the largest source of revenuefor most Urban Local Bodies (ULBs) in India.Yet in many ULBs the system for collection ofproperty tax remained far from optimal.Therefore State of Karnataka initiated a projecton Property Tax Information based onGeographical Information System (GIS), tointroduce reforms across these municipalbodies in order to improve administrativeefficiency, transparent and to provide bettercitizen services. The, the primary objective of

the e-governance component was to:* Streamline the processes and standardize

them across all the municipal bodies in thestate

* Roll-out a standardized software solutioncovering all the bodies

* Digitise records and make them availableto all stakeholders online

Prior to introduction of the project there wereseveral issues which were faced by the ULBs.They are:

*

Issues faced by the Department Low rate of filing the property tax

returns

High accumulation of arrears

Negligible penalty for not filing thereturn.

Improper assessment of Property taxby ULB Officials which was causinghuge revenue loss to the ULB

Large number of properties wereunassesed and not brought under Taxnet

Delay in preparing the list of defaulters

No uniform procedure of taxation

Lack of procedural compliance to theact, as Taxation principles followed bysome ULBs were not in accordancewith the Act

Tampering of records

Inaccurate and inconsistent detailsand data provided by ULB

Monitoring of ULB Tax performance

Property records were maintained inmanual Development Credit Bank(DCB) registers

Wrongly assessed properties.

* Issues from the perspective ofcitizens/service users

Delay in issuing property tax extract tocitizens

Non service of hand written propertytax notices to the Property owners byBill Collector every year

Possibilities of tampering the propertydetails entered manually in paper form

Calculation and clerical errors inTaxation by Bill Collectors andRevenue Officers.

* Issues faced by the government

Discrepancies in reported figures fromULBs

Lack of timely information aboutproperty details from ULBs

Inaccurate projections of Property Taxdemand which was one of the mainsource of revenue of ULBs.

The New Approach

State of Karnataka in an endeavor to ensuresustainable urban centers embarked on setreforms in urban sector. The first generation ofreforms mainly pertained to setting up of arobust system in three broad categories.Broad classifications of the reforms are:

* Institutional or structural (Accounting,application of IT),

* Revenue generation (Property taxation,User charges, SWM PPP),

* Service deliveries (Birth and deathregistration, Public Grievances redressal)

One of the key components of this initiativewas the e-governance component of theproject called Aasthi that covered PropertyTaxation with GIS.

The project was rolled across the state in aphased manner. In Karnataka there are 213Urban Local bodies (ULB) which are

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National Institute of Urban Affairs (NIUA), New Delhi |

Implementation Strategies

Beginning in fiscal year 2002-03, thegovernment of Karnataka implemented a setof far reaching reforms to its system forcollection of property tax in urban areas. Themethod of assessing property value for

purposes of calculating property tax due waschanged from one based on estimated rentalvalue to one based on the total capital value ofland plus buildings. Responsibility forcalculating property tax due was shifted fromcity officials to property owners themselves. Acomprehensive survey of all taxable land of allmunicipalities (excluding Bangalore) wasconducted. The new IT system for trackingand managing property tax collections wasimplemented in all municipalities across thestate.

Steps taken-up towards implementation of ICTenabled GIS based Property Tax Systemalong with its salient features are:

* Field Survey of all the properties in theULB.

* Preparation of digitized ward maps withindividual properties having a uniqueproperty ID Number.

* Sound Database of all the properties.

* Automatic calculation of the property taxdemand based on the CVS methods. Property tax Demand Calculation from

2005-06

DCB report from the year 2005-06

DCB Report at Different ULBBoundary levels

Demand Adjustment due to PropertyModifications

Demand Adjustments due to any Writeoffs

Auto Rebate and Cess calculation ifany.

Penalties are auto calculated.

* Generation of Bank Deposit Challans andthe Daily Collection reports.

* Citizen friendly, pay anywhere system.

* Automated Online Tax Calculator to thecitizen.

* Auto generation and issuing of Tax Paiddetails i.e. FORM III and Khatha Extract tocitizens at any point in time.

* All Property details of the ULB is availableto the citizen through GIS search pan,hence the citizen can cross verify thedetails in case he wants to do atransaction.

* Easy tracking of the Tax defaulters.

* Automatic generation of demand noticesand seizure notices.

* Information of various types of propertiesin each ULB.

* Can handle Office, Bank and Fieldpayments, with the ability to integrate withCredit Card and ATM systems.

* MIS reports at City, Ward, Street levels asdecision support tools for the revenuedepartment and citizens (e.g. DefaultersReport, Ward-wise collections).

* GIS Enabled till Parcel Level.

Web based application makes the platformmore interactive from the point of view ofservice delivery. This platform enables fasterdelivery of property tax extract which isgenerated automatically. Additional featureslike Demand Calculation, Penalty Calculation,etc are being implemented as enhancementsto the existing application based on this robust

database created through parcel mapping ofevery property. This software has beencertified and audited by Software Testing andQuality Centre (STQC), Ministry ofInformation.

In these 213 ULBs there is an estimated 35lakh properties. These properties are ofdifferent categories which include Residential,Commercial and Industrial .These are ownedby Public, Business organizations andGovernment entities. Levying of Property Taxand its collection is an ongoing annual activityat the state. The implementation process is

followed are given below:

* In Karnataka the method of taxation is SelfAssessment Scheme (SAS) based oncapital value system which involvesseveral computations to calculate Tax fora property which a citizen may not beaware. The Automated Online TaxCalculator is user friendly and is easilyunderstood by a common man as allcomputations are auto calculated.

* In the manual system citizens would takethe help of so called tax analysts whoposed as middle men at ULBs to fill up

SAS form and pay tax. For these servicesthey had to pay a hefty sum. Withcomputerization this has been eliminatedas citizens are able to get auto generatedtax details.

* The Online Tax Calculator has a userinterface which is similar to a SAS formhence a citizen can print the details andupdate the SAS tax form without anyhassles. It is time saving as well.

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| National Institute of Urban Affairs (NIUA), New Delhi

Challenges / Constraints Encountered

Following are the bottlenecks overcome /delays avoided by the new system:

* Updation of total tax collection by ULBs

* Issuing property tax extract

*Preparing the list of defaulters

* Preparing notices to defaulters

* Possibilities of tampering the propertydetails entered manually in paperform/registers

* Problems in identification un-assessedproperties.

* Removal of irrelevant steps as in the oldsystem every year Bill Collector wassupposed to serve property tax notices tothe Property owners, which has been doneaway in the new system. In the presentsystem, computerized notices are beingserved only to the defaulters who fail to

pay property tax through self assessmentby end of June.

Achievements and Results

* e-Governance initiatives through processreengineering within this domain hasparticularly helped with improving theinternal workings and bring about: Cutting process costs, improving the

input - output ratio by cutting financialcosts and/or time costs.

Managing process performance:planning, monitoring and controlling

the performance of process resourcessuch as human, financial and others.

* As it is a web-based application, wherebroad-band is used with very high speedconnectivity, the time taken to processevery transaction will be almost negligible.Accuracy of the output has increased.There is no delay in service delivery.Information about collection of property taxis available at any point of time. The statusand stage of action on defaulters isavailable property wise to ULB officials atany given point of time.

* It has streamlined the process involved inproperty tax collection, has improved therecord keeping of properties, increase taxcompliance rates and enables theGovernment Officials to make informeddecisions, bringing transparency inProperty Collections in ULBs. It is also GISEnabled up to Property Parcel Level forbetter Tax administration, because of

which an additional 30-40% of propertiesare brought under Tax net.

* The volume of transactions varies fromone ULB to other ULB. Since, centralizeddata server is being used, a totaltransactions pertaining of 35 lakh

properties is being handled in a year. Inaddition to this, the system will be handlingprocesses related to mutation, bifurcationand amalgamation of properties.

Outcome of the project

This initiative was the first of its kind in Indiawhere a state-wide model of reforms wasimplemented. Traditionally, municipal e-governance reform initiatives have been drivenat the local level, which have made themdifficult to replicate. The vision was to create astandardized set of systems and processes

across the state which would not only providethe benefit of knowledge sharing across theindividual bodies but also create a commonplatform on which comparative evaluationbetween municipalities could be undertaken.Under this framework, some of the mostinnovative decisions taken on the e-governance front were:

* Creation of a centralized system whichwas common in terms of process and datamodel across the state.

* The centralized approach enabled thetechnology team to leverage the internet todevelop an application that was accessed

by the individual municipal bodies over theinternet.

* The applications are now hosted centrallyat an independent entity (KarnatakaMunicipal Data Society) which providesthe applications to the individual municipalbodies for an annual subscription feeunder the Software as a Service providermodel. This is also a first under the Indiangovernment context.

Budgetary Implications

The cost of creating a GIS and MIS database

per property is estimated at an average of ` 24per property for the whole process of GISimplementation in a ULB, which includesSurvey of properties by Nodal Engineer andhired Survey Assistants, data entry andprintouts of property details by hiring DataEntry Agency, preparation and digitization ofULB maps by the digitizers. The time taken tocomplete the implementation of GIS basedproperty tax system in ULBs varies depending

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on size of the ULBs, number of properties, etc.The most time consuming is the physicalsurvey of the properties and verification of thesame by involving citizens, which takes about6 months. Six months is required for data entryas well as polygon drawings, digitization of themaps, integration of MIS and GIS database,

putting hardware in place, etc. Another 5-6months is required for correcting the databaseat the time of implementation on the feedbackreceived from citizens who is the Owner of theproperty. Generally, a time frame of 18months is required to implement GIS basedcomputerized property tax system in a ULB.Number of personnel involved is directlyproportional to the size of the ULB. Generally,30-40 properties are surveyed in one man-day. However, verification of the sameconsumes equal number of man days.

Sustainability

This Project has been institutionalized. Hencethey are system driven. The followingframeworks of reforms are highly sustainableand replicable;

* Municipal Reforms Cell: The variousofficers appointed in this office shallensure effective implementation of E-Governance modules. They offeronline/onsite technical assistance to ULBsto sort out various implementation issues.

* State Level GIS Agency: Survey of Indiahas been appointed as a Technical

Assistance and Support Agency (TASA)for implementation of GIS in all the ULBs.

* IT Engineers appointed to implement theproject: IT Engineers exclusivelyappointed for this project in the ULBs, areassigned the task to implement and furthermaintain e-Governance modules in theirrespective ULBs and coordinate with ULB,Field Level staff and Municipal ReformsCell for this purpose.

* District Urban Development Cells (DC)and Nodal Officers: Project Directors andNodal Officers positioned in the DistrictUrban Development Cells attached to the

respective DC offices handhold the ULBsin implementation and maintenance of e-Governance initiatives taken-up by theState Government.

GIS application envisages role based accessand every Role/User is accountable for his/heractions.

Impact of the project

Web based application has been developedfree of cost with the technical support of anNGO called e-Governments Foundation. Theentire ULBs database is stored in the centralserver maintained by Municipal Reform Cell at

Bangalore. The Municipal Staff depending ontheir roles, by using user login and passwordwill access their respective ULBs PropertyTax application via Internet from the citizenservice centre located within the Municipality.Administrators role lies with the MunicipalCommissioner/Chief Officer concerned whoheads the ULB.

This system has brought transparency in theprocess of property tax collection. Propertytax notices are generated automatically andthe property tax details are shared with theowners of the property. The system has

increased the responsibility and accountabilityon the part of Bill Collectors and RevenueOfficials. With a click on the button, theCommissioner can find out the amount his BillCollector was supposed to collect, assess hisperformance as to whether notices have beenserved by him and whether demand noticesserved by other revenue officials. Thissoftware helps to monitor and control theentire property tax collection system withoutdepending on the information being providedby the lower staff manually. The system alsohas central database at the State Level.

The performance of different ULBs ismonitored by using the central database whichbrings a sense of fear and resultantresponsibility in the minds of the Managers ofULBs. The system has simplified thecollection of data enabling periodical of StateLevel review of property tax collection.

Recognition

The initiative was awarded with the NationalAwards on e-Governance 2010 2011 by theDepartment of Administrative Reforms andPublic Grievances, Ministry of Personnel,Public Grievances and Pensions, Government

of India. This award seeked to recognize thebest-in-class project that involved analysis andre-design of workflow and aimed atimprovement in outcomes related to efficiency,effectiveness of process, cost, quality, servicedelivery, etc.

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| National Institute of Urban Affairs (NIUA), New Delhi

Contact for Details:

Commissioner

Municipal Administration, KarnatakaMunicipal Reform CellDirectorate of Municipal Administration1-4, 6th Floor, IT Park, Industrial EstateBangalore 560010Telephone No. 080-23003100,

080-23003111