This is how India can increase its municipal revenue

David Hickman of Thomson Reuters talks a GIS based solution for land revenue management

pratap

Pratap Vikram Singh | April 20, 2016


#Municipal Corporations   #GIS   #David Hickman   #Thomson Reuters  


The inaccuracy of data related to land ownership causes huge losses to the private and public sector. Moreover, land ownership disputes account for majority of cases pending in the courts globally. In an interaction with Pratap Vikram Singh, David Hickman of Thomson Reuters talks about Aumentum, a GIS-based solution for land revenue management. Edited excerpts:

How do you look at land management and what solution Thomson Reuters offers in this area?

We don’t judge and analyse where a policy stands but we try to educate them [governments] on technology that is available to execute their current policy. We have a solution that will help the government become efficient in recording and tracking the ownership of property. One of the outcomes of implementing the solution is that both the government and private sector industry will have more certainty when they go to purchase land. That is done through providing accurate records. It gives confidence to corporations that there will be no litigation in relation to a piece of land.

What is the core idea behind Aumentum?


It’s a product born out of 40 years of industry experience. What we bring to the government is twofold. We bring technology that helps them in improving their efficiency. And being the subject matter experts, we help [them] in rationalising their processes.

Aumentum has four components. First is land administration, which has a registration component. It encompasses the entire area called land hub and it’s tightly linked with geospatial data. If a property is registered and you transfer the title, you want to make sure that the registration document matches your geospatial data. If they do, then you don’t have a conflict. By having a real-time link with geospatial data as soon as sale or purchase happens it gets reflected in the database.

Second component is valuation. It automates the process that determines the value of property. Many urban bodies and municipal corporations have a responsibility to manage that. But you need to have an accurate value – whether it is stamp duty associated with the transaction fee or determining the value on which individuals can pay their property tax. Because of the size of most of the urban centres in India it is imperative that we use computer-assisted appraisal. You can’t do this through paper. You need a computer assisted model that will enable you to collect tax from mass properties at one time.

Third is the administrative component. This portion of the platform serves to administer the legal aspects of the valuation. It ensures that the tax is appropriately levied on each parcel of land based on the legal requirements of the specific municipal corporation. This is the calculation engine for the billing and the collections function of the platform.  

The key function here is to ensure that there is fair and accurate value of all properties. It ensures that everyone has equal responsibility of their tax burden.

Fourth component is billing and collection centres. If you don’t have an efficient [billing] system the burden [of responsibility] falls more heavily on those who are paying taxes and the irresponsible are able to get away without paying taxes. Often the result of that is inefficiency and increase in tax rates.

You are punishing people for responsibly paying their taxes by increasing taxes as opposed to becoming more efficient and collecting taxes from the delinquent.

So efficiency in that area is huge. On an average the percentage of GDP collected from property tax would be 2.12. In underdeveloped countries it is 0.6. In India it is 0.8 percent. The developing countries are between 1.8 and 1.6. China and Korea are over 2.
India has a great opportunity to increase the revenue coming from urban municipal corporations. They don’t have to increase the tax rate [for it], they just have to become efficient.

Are you offering these solutions for smart cities as well?

There are apprehensions about the sustainability of smart city projects. The simple way of making it sustainable is to put a strategy in place to make sure that you get the funding to support projects you want to do in future. A lot of projects that you do reduce cost and bring efficiency. But this is a direct revenue source for the government.

The information, captured through our solution, is sharable. You can push this information in public domain. It can be leveraged for urban planning, development strategies, maintaining public roads, and utilities. It also allows advanced analytics so that you can plan better.
A smart city is where leaders take informed decisions and that gives you better livability.

Any successful case study of Aumentum?

We implemented this in Cape Town in the valuations department. A third-party assessment done by KPMG revealed a few key findings. Because of the efficiency and integration with the cadastral, the city found out additional 2,50,000 land parcels they were unaware of. This was apart from 5,50,000 land parcels. They were also able to increase the accuracy of data on land parcel. They undertook several initiatives to get each parcel registered.

Second, the litigations opposing the valuation of property came down drastically. Initially, it was done by officials manually. Once they rolled out the system, the litigations went down by 60 percent. The rollout started in 2006 and it went online in 2009. Before implementation, 807 people were engaged in generating valuation. Now it is done by only 179 people.

Even if they collect with the exact same rate, their revenue will increase by 333 percent. It is because of accuracy of record, addition of missing record and better valuation of properties.

At present, we are in advance talks with an African country for deploying all four modules.

[email protected]

(The interview appears in the April 16-30, 2016 issue)

 

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