New Delhi, July 4: States keen to host new IITs or IIMs will now have to satisfy more than just quality parameters normally evaluated to select locations: they will have to lower the property tax they charge the Centre.

Burdened by rising property tax payments for the fast increasing number of premier higher educational institutions started by the Centre, the human resource development ministry has decided to use state aspirations to cut down its bills.

The HRD ministry has written to states asking them to charge property tax for new central institutions they aspire for at the same rate at which they charge their own institutions, government officials said.

Property tax is collected by individual municipalities at rates that vary from city to city. Different cities also have different tax collection structures.

But the property tax rate is always lower for municipal and state government properties than for other properties.

The ministry’s move comes after the Municipal Corporation of Delhi levied a hefty property tax running into crores of rupees from the Indian Institute of Technology, Delhi, sources said.

“Given the number of new apex higher educational institutions we are starting, we want to make it clear to states that they will need to reduce the property tax rates if they want the institutions they are clamouring for,” a senior officer in the finance wing of the HRD ministry said.

The UPA, in the 11th five-year plan, promised eight new IITs, seven new IIMs, 12 new central universities and an additional 14 centrally run “world class universities”. It also promised 10 new National Institutes of Technology, 20 new Indian Institutes of Information Technology and five Indian Institutes of Science Education and Research.

Although the Centre has announced the states that are receiving the new IITs, IIMs, IISERs, central universities and world class universities, memoranda of association with the states are yet to be inked in most cases.

Several other states that have not been allotted institutions they were bidding for — such as Karnataka and Kerala for IITs — continue to remain in the queue.

Although it will be almost impossible to withdraw institutions from states where they have been announced, pressure from the waiting states may help the Centre win tax rebates, a source said.

The HRD ministry’s new condition will also hold for any new institutions the Centre starts in the future, the source said.

The new criterion — far removed from the usual requirements for site selection — comes at a time the government is struggling to match massive promises with its poor finances resulting from the economic slowdown.

Once the Centre decides on starting new educational institutions of excellence, it usually writes to all states informing them of basic criteria, including connectivity and adequate land that the state has to provide.

States reply with proposed locations and details of the land they can offer. A central team of educational experts then visits the various proposed sites and reports the site best suited to lure the best students, teachers, researchers and industry.