Smart cities require smart public finance and a sound property taxation regime is vital to India’s urban future, the Economic Survey said on Friday.
“Property taxation needs to be developed. The very fact that systematic data on property taxation across the country is so sparse is a measure of just how little attention has been given to this tax,” the Survey noted.
Property taxes are progressive, buoyant, are imposed on non-mobile good, hence, difficult to evade, and can be easily identified given the technology today. “Higher rates, with values updated periodically, can be the foundation of local government’s finances, which can thereby provide local public goods and strengthen democratic accountability and more effective decentralisation,” it added. The government’s flagship ‘smart cities mission’ targets promoting cities that provide core infrastructure and give a decent quality of life to its citizens, a clean and sustainable environment and application of ‘smart’ solutions.