FE Editorial : Squaring the circle
Indeed, while property taxes can never hope to pay for improvements made to cities through creation of new infrastructure, increased property tax collections is an important way to collect funds for O&M expenses at least. Increasingly, cities have to link infrastructure provision to higher circle rates. While well-developed city centres offer less scope to increase collections as property prices typically rise slower than they do in suburbia being linked through high-speed bus or metro corridors, the latter offer good scope for increasing rates. Not surprising then that an important component of the JNNURM is proper mapping of residential and commercial properties and ensuring proper collection of property taxes. Sadly, the record of most cities in collecting the full value of potential property taxes is still poor. When the new improved JNNURM is cleared, this is likely to be an integral part of it.
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