Patna, April 6: The urban development department has hired a Delhi-based technical support agency to prepare a revenue enhancement plan for cash-strapped local bodies in the state, including Patna Municipal Corporation (PMC).

Sources in the urban development department said the proposal is still in the draft stage and it could be finalised only after 2-3 months. It has suggested for the introduction of large-scale changes in tax structure of the urban bodies.

“Urban technical assistance support team — a technical consultant team — which has been associated with us in many projects has been asked to prepare the revenue enhancement plan for the urban bodies in the state. It is expected to propose a way to introduce changes in the revenue structure,” said a senior urban development department official.

A source in the support team said though a final proposal was yet to be chalked out, key features of the proposal included a hike in residential, commercial and other taxes. “As per the Bihar Municipal Act, all the commercial establishment, be it a roadside dhaba or a big hotel, are paying taxes at the same rates. This has to change and therefore, we are proposing that the taxes be decided according to the income they are generating,” the source said.

He also said the proposal will be sent for 28 urban bodies in the state including PMC.

Sources said the resource base of the PMC is very low and it has been generating revenue of barely Rs 70-80 crore every year for past 2-3 years. Of the revenue income of Rs 70-80 crore, about Rs 50 crore is from its own resources. Grants contribute to the remaining amount. The city generates 70 per cent of its own income from the property or other taxes and the rest from non-tax revenue.

“The revenue and expenditure figures during the past four years remained inconsistent for generating a pattern of financial resource mobilisation and utilisation by the PMC. The revenue income has been declining at the rate of 6 per cent on an average and thus, there is a need to hike the taxes,” the source added.

Sources said among all expenditures of the PMC, establishment cost — including salaries to its employees and maintaining its infrastructure — is at 75 per cent.

The revenue expenditure has been increasing at the rate of 12 per cent per annum. Total debt liabilities on the PMC amount to Rs 44.5 crore and servicing of debt is not regular.

Meanwhile, sources in the civic agency said as poor collection of property taxes had been a major challenge, the civic body has decided to make it essential to issue a unique holding number to every new construction — be it a house, flat, shop, commercial establishment or apartment.

“The body will issue the unique holding number as soon as it approves the building plan for a new construction. The municipal corporation has already the proposal but the state government is yet to decide upon it. Once a decision is taken, the policy will be applicable very soon,” said a senior executive officer in the corporation.