The main non-tax revenue sources include user fee, trade license fee, layout/building approval fee, development fee, betterment fee, sales and rent fee, market fee, slaughterhouse fee, parking fee, birth and death registration fee.
Municipal corporations should charge adequate user fee on essential services like water supply and sanitation to increase non-tax revenue and provide quality public services. This was said in a report of the Reserve Bank of India (RBI). The ‘Report on Municipal Finance’ 2019-20 to 2023-24 (Budget Estimates) has deeply considered the fiscal position of 232 municipal corporations (MCs). It particularly focused on the topic ‘Own sources of revenue generation in municipal corporations: opportunities and challenges’.
Revenue can be increased in this way
According to the report, “Municipal corporations can significantly increase non-tax revenue by levying appropriate and adequate fees for essential services like water supply, sanitation and waste management. By doing this, uninterrupted availability of high quality public services can be ensured.” The report said that these measures, combined with more transparent and accountable governance practices, can contribute to strengthening the financial health of municipal corporations.
What charges can be imposed?
According to the RBI report, if this happens, it will start a cycle of better services to the public, stronger revenues and continuous upgradation of urban infrastructure. The main non-tax revenue sources include user charges, trade license charges, layout/building approval charges, development charges, betterment charges, sale and rent charges, market charges, slaughterhouse charges, parking charges, birth and death registration charges. Sources of tax revenue include property tax, vacant land tax, water benefit tax, advertisement tax, sewerage benefit tax, tax on animals and tax on vehicles.
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