17278final Report VCF Bilaspur With Summary

Final Report
Technical Assistance in Generating Revenue through Value Capture Financing Tools for Bilaspur
FINAL REPORT
TECHNICAL ASSISTANCE IN GENERATING REVENUE
THORUGH VALUE CAPTURE FINANCING TOOLS FOR
BILASPUR
Client: State Urban Development Agency, Government of Chhattisgarh
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Table of Contents
TABLE OF CONTENTS ....................................................................................................................................... 2
LIST OF FIGURES .............................................................................................................................................. 6
LIST OF TABLES ............................................................................................................................................... 7
LIST OF ABBREVIATIONS .................................................................................................................................. 8
EXECUTIVE SUMMARY .................................................................................................................................... 10
1 BACKGROUND ....................................................................................................................................... 17
1.1 INTRODUCTION TO VALUE CAPTURE FINANCE ................................................................................................ 18

1.2 OBJECTIVE OF STUDY ............................................................................................................................... 20
1.3 SCOPE OF THE ASSIGNMENT ...................................................................................................................... 20
1.4 NEED OF VCF FOR BILASPUR ................................................................................................................. 21
2 VCF TOOLS ............................................................................................................................................ 23
2.1.1 STANDARD LAND BASED FISCAL TOOLS IN INDIA ........................................................................... 23

2.1.2 Land Value Tax ................................................................................................................................ 23
2.1.3 Development Charges (Impact Fee) ................................................................................................ 24
2.1.4 Betterment Levy .............................................................................................................................. 25
2.1.5 Vacant Land Tax.............................................................................................................................. 26
2.1.6 Fee for Changing Land Use ............................................................................................................. 26
2.1.7 Transfer of Development Rights (TDR) ............................................................................................ 27
2.1.8 Premium on Additional FSI/FAR ...................................................................................................... 28
2.1.9 Land Pooling System ....................................................................................................................... 28
2.1.10 Land Acquisition and Development ............................................................................................ 29
2.1.11 Tax Incremental Financing (TIF) ................................................................................................. 29
2.2 ADDITIONAL LAND BASED FISCAL TOOLS IN INDIA............................................................................... 32
2.2.1 Regularization of Unauthorized Development ................................................................................ 32
2.2.2 Property Development for Leasing ................................................................................................. 32
2.2.3 Charging Extra Stamp Duty ............................................................................................................. 32
2.2.4 Purchasable Development Control Regulations .............................................................................. 33
3 CITY PROFILE......................................................................................................................................... 35
3.1 DEMOGRAPHIC PROFILE ................................................................................................................ 35

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3.2 CITY GROWTH ......................................................................................................................................... 39

3.3 ECONOMIC PROFILE ................................................................................................................................. 40
3.4 RESIDENTIAL AND COMMERCIAL PROPERTIES ................................................................................... 41
3.5 INFRASTRUCTURE .................................................................................................................................... 42
3.6 SMART CITY PROJECT INTERVENTIONS ........................................................................................................ 44
3.6.1 Area Based Development Proposal ................................................................................................. 44
3.6.2 Pan City Proposal ............................................................................................................................ 46
3.6.3 Project Costing ................................................................................................................................ 46
3.7 AMRUT PROJECT.................................................................................................................................... 47
3.8 REAL ESTATE MARKET ANALYSIS AND LAND PRICES AND DYNAMICS.............................................................. 48
3.9 PROPERTIES OWNED BY BILASPUR MUNICIPAL CORPORATION ............................................................ 49
4 EXISTING LAND BASED FISCAL TOOLS IN BILASPUR .............................................................................. 54
4.1 FINANCIAL POSITION OF BILASPUR MUNICIPAL CORPORATION ............................................................................ 54

4.2 LEGISLATIVE BACKING ............................................................................................................................... 61
4.2.1 The Chhattisgarh Municipal Corporation Act, 1956 ....................................................................... 61
4.2.2 The Chhattisgarh Municipal Corporation and Municipalities (Registration of Colonizer, Term and
Conditions) Rules, 2013. ............................................................................................................................... 62
4.2.3 Notification No. F 7-8/2011/18 Dated 5th January 2016 ............................................................... 63
4.2.4 The Chhattisgarh Nagar Tatha Gram Nivesh Adhiniyam, 1973 ...................................................... 65
4.2.5 The Chhattisgarh Nagar Tatha Gram Nivesh Niyam, 1975. ............................................................ 69
4.2.6 The Chhattisgarh Bhumi Vikas Rules, 1984 ..................................................................................... 70
4.2.7 The Chhattisgarh Land Revenue Code, 1959 .................................................................................. 73
4.2.8 Rules regarding Alteration of Assessment and Imposition of premium for the purpose of levy of
premium on Agricultural land ...................................................................................................................... 74
4.2.9 Chhattisgarh Griha Nirman Mandal Adhiniyam, 1972 ................................................................... 74
4.2.10 Chhattisgarh Anadhikrit Vikas Ka Niyamitikaran Adhiniyam, 2002. .......................................... 75
4.2.11 Chhattisgarh Anadhikrit Vikas Ka Niyamitikaran (Sanshodhan) Adhiniyam, 2003. ................... 75
4.2.12 The Chhattisgarh Anadhikrit Vikas Ka Niyamitikaran Niyam, 2002 ........................................... 76
4.2.13 Chhattisgarh Anadhikrlt Vikas Ka Niyamltikaran (Sanshodhan) Adhiniyam, 2016 .................... 77
4.3 VCF TOOLS IN PRACTICE IN CHHATTISGARH / BILASPUR ............................................................................... 78
4.3.1 Property tax .................................................................................................................................... 78
4.3.2 Building Permission Fee (Bhawan Anugya Shulk) ........................................................................... 81
4.3.3 Development Charges (Vikas Shulk)................................................................................................ 84
4.3.4 Regularisation Charges (Samjhota / Rajinama Shulk) .................................................................... 86
4.3.5 Property Development and Leasing ................................................................................................ 88
5 IDENTIFICATION OF APPLICABLE VCF TOOLS FOR BILASPUR ................................................................ 91
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5.1 PROPERTY TAX........................................................................................................................................ 91

5.1.1 Revenue Potential from Property Tax/ Fee ..................................................................................... 91
5.1.2 Cost-Benefit Analysis....................................................................................................................... 94
5.2 REVENUE POTENTIAL FROM IMMOVABLE PROPERTIES UNDER BMC .................................................. 95
5.2.1 Cost-Benefit Analysis....................................................................................................................... 98
5.3 BUILDING PERMISSION FEE ......................................................................................................................... 99
5.3.1 Cost-Benefit Analysis..................................................................................................................... 100
5.4 DEVELOPMENT CHARGES ........................................................................................................................ 101
5.5 PREMIUM ON RELAXATION OF RULES OR ADDITIONAL FSI/FAR....................................................................... 103
5.5.1 Revenue Potential from Premium on relaxation of rules or additional FSI/FAR ........................... 104
5.6 REMUNERATIVE USE OF LAND PARCELS ..................................................................................................... 106
5.7 REVENUE FROM REGULARIZATION OF UNAUTHORIZED COLONIES .................................................................... 107
5.8 EXPANDING MUNICIPAL LIMITS .................................................................................................................. 109
5.9 STAKEHOLDER CONSULTATIONS ............................................................................................................... 113
6 IMPLEMENTATION FRAMEWORK .......................................................................................................... 115
6.1 IDENTIFICATION OF CLAUSES TO BE AMENDED ................................................................................ 115

6.1.1 Rationale for Change in Area Based Rates of Building Related Fee .............................................. 115
6.1.2 Power of Government to abolish, suspend or reduce the amount or rate of any tax under the
Chhattisgarh Municipalities Act, 1961. ...................................................................................................... 116
6.1.3 Rationale for change in Rates of Premium on diversion of land use under The Chhattisgarh Land
Revenue code, 1959 (Rules regarding Alteration of Assessment and Imposition of premium for the
purpose of levy of premium on Agricultural land) ..................................................................................... 117
6.1.4 Rationale for enacting Law/Rules for levy of Conversion charges on change of land use in urban
areas from residential to commercial / industrial use and for sub-division, and amalgamation of plots: 119
6.1.5 Rationale for change in Rates of Betterment Charges under the Chhattisgarh Griha Nirman
Mandal Adhiniyam, 1972 ........................................................................................................................... 122
6.1.6 Rationale for enacting new provisions for levy of Infrastructure development tax on big residential
properties/complexes and on non-residential properties. ......................................................................... 124
6.1.7 Rationale for levy of Infrastructure Development Charge as well as of Infrastructure
Augmentation Charge on change of land use/diversion of land use: ........................................................ 126
6.1.8 Rationale for making provision in law for charging Premium on Additional FAR/FSI: .................. 128
6.1.9 Rationale for levy of Certain Fee/Charges in Chhattisgarh levied by the State Government in
Rajasthan ................................................................................................................................................... 132
6.1.10 Rationale for levy of Land and Building Tax on the market value of lands and buildings in
Chhattisgarh as levied by the Municipal Corporations in Rajasthan. ............................................ 135
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6.2 PROPOSED AMENDMENTS ........................................................................................................................ 136

6.3 ACTS/SECTIONS/RULES/BYE-LAWS /NOTIFICATIONS TO BE AMENDED ............................................................... 137
6.3.1 Amendment of Section 187A of The Chhattisgarh Municipalities Act. 1961 ................................ 137
6.3.2 Amendment of Section 339B of the Chhattisgarh Municipalities Act. 1961 ................................. 137
6.3.3 Amendment of Rule 8 of The Chhattisgarh Municipal Corporation and Municipalities (Registration
of colonizer, term and conditions) Rules, 2013. ......................................................................................... 138
6.3.4 Amendment of Rule 11 of The Chhattisgarh Municipal Corporation and Municipalities
(Registration of colonizer, term and conditions) Rules, 2013 .................................................................... 139
6.3.5 Amendment in section 349 of the Chhattisgarh Municipalities Act, 1961 .................................... 139
6.3.6 Amendment of Section 163-A of The Chhattisgarh Municipal Corporation Act, 1956. ................ 140
6.3.7 Amendment of Section 308-B of the Chhattisgarh Municipal Corporation Act, 1956. ................. 140
6.3.8 Amendment of Rule 12 of The Chhattisgarh Nagar Tatha Gram Nivesh, Niyam, 1975. ............... 140
6.3.9 Amendment of Section 59 of The Chhattisgarh Nagar Tatha Gram Nivesh Adhiniyam, 1973 ..... 141
6.3.10 Amendment of Rule 21(3) of The Chhattisgarh Bhumi Vikas Rule, 1984 ................................. 142
6.3.11 Amendment of Rule 95 of The Chhattisgarh Bhumi Vikas Rules, 1984 .................................... 144
6.3.12 Amendment of section 258 of The Chhattisgarh Land Revenue Code, 1959 regarding premium
on diversion of land use. ............................................................................................................................ 145
6.3.13 Amendment of Rule 14 of the Rules regarding Alteration of Assessment and Imposition of
premium for the purpose of levy of premium on Agricultural land............................................................ 145
6.3.14 Amendment of Section 51 of the Chhattisgarh Griha Nirman Mandal Adhiniyam, 1972 relating
to Betterment charges. .............................................................................................................................. 146
6.4 NEED FOR SEPARATE ACCOUNTING FOR DIVERSION CHARGES, CONVERSION CHARGES, BETTERMENT CHARGES AND
BETTERMENT LEVY: ............................................................................................................................................. 147
6.5 TIMELINE FOR IMPLEMENTATION ................................................................................................................ 147
6.5.1 Short term action (up to 1 year): .................................................................................................. 147
6.5.2 Medium term action plan (1 to 3 years): ..................................................................................... 148
6.5.3 Long term actions (more than 3 years): ....................................................................................... 150
6.5.4 Recommendations: ....................................................................................................................... 150
6.6 CONTRACTUAL AGREEMENTS/ MOU ETC. (TO BE ADDRESSED DURING HANDHOLDING PHASE IN CONSULTATION WITH
STAKEHOLDERS) ................................................................................................................................................. 152
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List of Figures
Figure 1 : Diagrammatic Presentation of the Concept of VCF .............................................................................. 19

Figure 2: Diagrammatic Presentation of the Concept of VCF ............................................................................... 20
Figure 3 : Regional Setting of Bilaspur.................................................................................................................. 36
Figure 4: Population Growth in Bilaspur Municipal Corporation (Source: Census of India) .................................. 37
Figure 5: Gender Ratio Comparison of BMC & State............................................................................................ 37
Figure 6: Ward Boundary Map - Bilaspur City ....................................................................................................... 39
Figure 7 : Spatial Growth of Bilaspur City ............................................................................................................. 40
Figure 8: Distribution of Workers in Bilaspur ......................................................................................................... 41
Figure 9: Area covered under ABD Project ........................................................................................................... 44
Figure 10: Resource Allocation - Source: State Annual Action Plan 2017-2020 ................................................... 47
Figure 11 : Sector-wise allotments of funds under AMRUT (2015-2020) .............................................................. 48
Figure 12: Source-wise break-up of AMRUT funds for Bilaspur ........................................................................... 48
Figure 13 : Land Price Contour for Bilaspur City (2017-18) .................................................................................. 49
Figure 14: Revenue Income - Nagar Nigam Bilaspur............................................................................................ 57
Figure 15: Tax Revenue Income - Nagar Nigam Bilaspur..................................................................................... 58
Figure 16 : Non-Tax Revenue Income - Nagar Nigam Bilaspur ............................................................................ 58
Figure 17 : Rental Income from Municipal Properties - Nagar Nigam Bilaspur ..................................................... 59
Figure 18: Expenditure Status at a Glance – Nagar Nigam Bilaspur (in INR Lakhs) ............................................ 60
Figure 19 : Estimated Revenue from Monetization of Land Parcels ................................................................... 107
Figure 20: Shortfall in the CAPEX post land monetization as per SCP-Bilaspur................................................. 107
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List of Tables
Table 2-1: Summary of Provision of Standard VCF Tools in various States in India ............................................ 30
Table 3-1: Brief Profile of Bilaspur City (Census 2011) ......................................................................................... 35
Table 3-2: ward wise population distribution ......................................................................................................... 38
Table 3-3: Ward wise Distribution of Residential Properties ................................................................................. 41
Table 3-4: Location-wise Distribution of Commercial Properties ........................................................................... 42
Table 3-5 : Details of the Area Based Proposals under Smart city in Bilaspur...................................................... 45
Table 3-6: Project-wise estimated capital cost of Smart City proposal ................................................................. 47
Table 3-7: Shops Rented by Estate Department (BMC) ....................................................................................... 49
Table 3-8 : Shops Rented by Bazar Vibhag (BMC)............................................................................................... 50
Table 4-1 : Revenue Income Status at a Glance – Nagar Nigam Bilaspur (in INR Lakhs) ................................... 56
Table 4-2 : Revenue Expenditure for Nagar Nigam Bilaspur (FY 2013-14 & 2016-17)......................................... 59
Table 4-3 : Property tax revenue (in Rs. lakhs) ..................................................................................................... 79
Table 4-4 : Zone wise annual letting value (Rs.per sq ft) for building / land .......................................................... 79
Table 4-5 : Property tax rate is defined as under .................................................................................................. 80
Table 4-6 : Revenue from building permission charges (In Rs. lakhs) .................................................................. 82
Table 4-7 : Revenue from Renting of Municipal Properties (In Rs. lakhs)............................................................. 88
Table 5-1 : Annual Letting Value vis-à-vis Computation of Property Tax for various sizes of Commercial Properties
.............................................................................................................................................................................. 92
Table 5-2 : Annual Letting Value vis-à-vis Computation of Property Tax for various sizes of Residential Properties
.............................................................................................................................................................................. 92
Table 5-3 : Property Tax amount as percentage of Land Values for Commercial properties ................................ 92
Table 5-4 : Property Tax amount as percentage of Land Values for Residential properties ................................. 93
Table 5-5: Cost – Benefit Analysis for Property Tax/ Fee ..................................................................................... 94
Table 5-6: Monthly Lease Rent viz-a-viz Prevailing Market Rent of Shops owned by BMC ................................. 95
Table 5-7: Potential Revenue from Shops under BMC ......................................................................................... 97
Table 5-8 : Cost – Benefit Analysis for Leasing of Immovable Properties of BMC................................................ 98
Table 5-9 : Building Permission Fee amount as percentage of Land Values ........................................................ 99
Table 5-10: Cost – Benefit Analysis for Building Permission Fee ....................................................................... 100
Table 5-11: Analysis of currently charged Development charges as a percentage of value of underlying asset 101
Table 5-12: Cost – Benefit Analysis for development charges ............................................................................ 102
Table 5-13: Revenue Potential from Purchase-able FAR ................................................................................... 104
Table 5-14: Cost – Benefit Analysis for purchasable FAR .................................................................................. 105
Table 5-15: PPP revenue streams as per Smart City Proposal- Bilaspur ........................................................... 106
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List of Abbreviations
AMRUT Atal Mission for Rejuvenation and Urban Transformation

BMC Bilaspur Municipal Corporation
CAGR Compound Annual Growth Rate
CBUD Capacity Building for Urban Development
CIL Community Infrastructure Levy
CLU Change of Land Use
CSR Corporate Social Responsibility
EDC External Development Charges
FAR Floor Area Ratio
FSI Floor Space Index
GDP Gross Domestic Product
GHMC Greater Hyderabad Municipal Corporation
GIS Geographic Information System
GoI Government of India
GST Goods and Service Tax
HPEC High Powered Expert Committee
JnNURM Jawaharlal Nehru National Urban Renewal Mission
LBFT Land Based Fiscal Tools
Lpcd Litres per capita per day
MC Municipal Corporation
MMRDA Mumbai Metropolitan Region Development Authority
MoUD Ministry of Urban Development
NH National Highway
PPP Public Private Partnership
PSM Per square metre
SADA Special Area Development Authority
SBA Swachh Bharat Abhiyan
SBM Swachh Bharat Mission
SH State Highway
TDR Transferable Development Rights
TIF Tax Increment Financing
UIBT Urban Infrastructure Benefit Tax
ULB Urban Local Body
VAT Value Added Tax
VCF Value Capture Financing
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EXECUTIVE SUMMARY
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EXECUTIVE SUMMARY
BACKGROUND
Bilaspur is the second-largest city (after Raipur) in the state of Chhattisgarh. Infrastructure development initiatives
in Bilaspur are being undertaken under Smart City Mission as well as AMRUT. A provision of INR 332.16 crore
has been made under AMRUT for the city, of which INR 66.44 crore are to be funded by Bilaspur Municipal
Corporation. The total cost of Bilaspur Smart City project is estimated at INR 3966.32 crore. The CAPEX of the
projects envisaged under the Smart City proposal shall be financed by Smart City Funds (INR 976.00 crore);
convergence funds (INR 994.1 crore) and an additional amount of INR 2175.83 crore through PPP.
OBJECTIVE OF ASSIGNMENT
The key objective for this study is to conceptualize and develop a framework (including procedural, legal and
institutional aspects) to generate revenue through VCF tools for Bilaspur, to effectively capture the additional land/
property value generated through public investments made as part of the implementation of the Smart City and
AMRUT Mission.
ACTIVITIES UNDERTAKEN
To achieve the above stated objective of the assignment, the following activities / tasks were undertaken in
accordance with the terms of reference:
• Plan work for the assignment
• Study of reports viz. Land Based Fiscal Tools and Practices for Generating Additional Financial Resources,
August 2013 supported under Capacity Building for Urban Development project (CBUD) - A partnership
program between Ministry of Urban Development, Government of India & The World Bank; Value Capture
Financing Policy Framework, Ministry of Urban Development, Government of India, February 2017 and material
published in various workshops and seminars.
Deliverable – Inception Report
• Analysis of various VCF tools available and practices of the same within India and abroad.
• Collection of relevant data for Bilaspur City.
• Assessment of land based fiscal tools in Chhattisgarh / Bilaspur and their legislative backing
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• Efficacy of existing land based fiscal tools
• Stakeholder consultations
• Identification of appropriate VCF tools for the State / ULB including their cost benefit analysis and development
of VCF framework.
• Short, medium and long term implementation plan
• Identification of clauses to be amended at State/ ULB level, rationale behind the same and suggested
amendments.
Deliverable – Draft Report 1
• Presentation of ULB officials
• Incorporation of changes suggested indicated by the ULB officials.
Deliverable – Draft Report 2
• Presentation of ULB officials
• Incorporation of changes suggested indicated by the ULB officials.
Deliverable – Final Report
IDENTIFICATION OF APPROPRIATE VCF TOOLS FOR BILASPUR
Property Tax
During 2016-17, Bilaspur Municipal Corporation has raised a demand of Rs. 24.71 crore towards property tax. The
collection against the demand was Rs. 21.68 crore. For the purpose of property tax Bilaspur Municipal Corporation
area is divided into 4 zones. The property tax is charged as a percentage of the annual letting value of the property.
The letting values defined are constant across the 4 zones and hence fail to distinguish between high value and
low value properties.
An analysis of property tax based on annual letting value vis-à-vis the land values based on Collector Rates reveals
that properties with least Collector rate pay property tax @ 0.22% of the prevailing land value whereas properties
with highest Collector rate pay property tax @ 0.08% of the prevailing land value. As per the estimates there are
about 60000 properties in Bilaspur. If the smaller plots, say, smaller than 200 square meters estimated to be 12000
(estimated @ 20%) are excluded, from the levy of Land and Building Tax and estimate average size of the balance
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taxable plots numbering 48000 to be 200 square meters each and the average market price of land to be Rs.
20000/- per square meter (the minimum being Rs.13000/- per square meter and going up to Rs.45000/- per square
meter) an average plot of 200 square meters would be valued at Rs. 4000000/- and the annual Land and Building
Tax for each property @ 0.22% of the market value would come to Rs 8800/-. Thus, revenue of Rs. 42.24 crores
from the levy of uniform Land and Building Tax @ 0.22% on 48000 properties can be envisaged. If the Land and
Building Tax in Chhattisgarh is levied on the lines of Rajasthan @ 1% of the market value of lands per year the
potential revenue from 48000 properties (as explained above) would be Rs. 192 crore per year.
Recommendations:
• All the properties to be mapped and linked to GIS.
• Any new building to be added to the GIS data base before giving the completion certificate.
• Online system of demand and collection to be introduced.
• Concept of common bill for all utilities like water supply, electricity, property tax etc. may be introduced. Non-
payment or partial payment of utility bill may attract disconnection of electricity.
• An independent third party may be engaged for demand and collection of utility bill.
Time Lines:
• GIS Mapping of all properties – A Short Term Measure (0-1 year).
• Move from area-based method to value based method will need amendment in Act – A Short Term Measure
(0-1 year).
• Introduction of on-line system for demand and collection of property tax may be targeted in Medium Term (1-3
years).
Rental Income from Immovable Properties
Rental income from municipal properties is through leasing of shops/properties owned by BMC. During FYs 2015-
16 and 2016-17, BMC has collected Rs. 210.52 lakh and Rs. 252.40 lakh respectively. The shops are auctioned
at a minimum reserved price which is sum of cost of land based on Collector Rate and cost of construction. The
lessee also pays a monthly rent for the lease period. It is observed that the charged monthly rent in most of the
cases is as low as one-tenth of the prevailing market rentals. The monthly rental is not enough even to offset the
interest on the cost of construction which the ULB has incurred. It is therefore suggested that monthly rentals
should be rationalized in-line with the prevailing market rentals. On the expiry of the lease period (to be kept at 3
to 5 years) the reserve price should again be looked at for necessary corrections in comparison to the
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prevailing market prices. In the re-auction, the out-going lessee may be provided with the first right of refusal on
the lease amount offered during the re-auction. This process will ensure bouyancy in the lease rents. Following
this line of approach, the yearly revenue of MC may increase from the current level of Rs. 2.50 crore per year to
Rs. 30 – 40 crore per year.
Recommendations:
• Rationalization of lease rent of Municipal shops in line with the prevailing market rentals.
Time Lines:
• Revision in leasing method should be worked out based on prevailing market rents – A Medium Term Measure
(1-3 years).
• Introduction of on-line system for collection of lease rent may be targeted in Medium Term (1-3 years).
Building Permission Fee
The building permission fee in Bilaspur is area based and does not take into account the market value (Collector
Rate) of the underlying asset, hence fails to capture value. An analysis of the Building Permission Fee reveals that
the fee on low valued plots is 4 times higher than the plots which are high valued. Therefore, the area-based rates
are iniquitous and results in loss of substantial revenue. It is therefore suggested to charge the Building Fees
based on the land value without increasing the total liability for the citizen who holds plots with lesser market value.
This can be done by applying the effective rate of Building Fee as a percent @ 0.15% of notified land rate applicable
at present to the lowest land rate (Rs. 13,000/- per sqm) to all land parcels. During the FY 2015-16, Bilaspur
Municipal Corporation collected Rs. 2.18 crore from building fee. If land value base approach is adopted, the
potential revenue can enhance by 4 to 5 times thereby resulting in potential revenue of about Rs. 8 to 9 crore per
annum from Building Fee.
Recommendations:
• Rationalization of Building Permission Fee based on the Collector Rate of land.
Time Lines:
• Move from area-based method to value based method will need amendment in Act – A Medium Term Measure
(1-3 years).
• Introduction of on-line system for collection of building construction fee may be targeted in Medium Term (1-3
years).
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Development Charges
The Development Charges in Bilaspur are currently levied at a rate of INR 53.80 per sq. ft to 107.60 per sq. ft on
built up area depending on the usage, no of floor and size of plot under developments. The method of calculation
of development charges does not take into account the market value of the underlying asset, hence fails to capture
value. The method also lacks buoyancy. An analysis of Development Charges reveals that the development
charges when translated to the land value (Collector Rate) on low valued plots works out at around 4.5% of the
land value (Collector Rate) and around 1.29% of the land value for highest valued plots. Therefore, the prevailing
area-based rates are iniquitous and results in loss of substantial revenue. It is therefore suggested to levy the
Development Charges based on the land value without increasing the total liability for the citizen who holds plots
with lesser market value. This can be done by applying the effective rate of Development Charges @ 4.5% of
notified land rate applicable at present to the lowest land rate (Rs. 13,000/- per sqm) to all land parcels. If the
development charge is levied @ 4.5% (the rate which currently is levied on the land parcels with least value) of
the land value, the current average rate of Rs. 53.80 per sqft will increase to Rs. 83.00 per sqft. This will result in
an increase in revenue of the ULB under this head by almost 50%.
Recommendations:
• Rationalization of Development Charges based on the Collector Rate of land.
Time Lines:
• Move from area-based method to value based method – A Short Term Measure (0-1 years).
• Introduction of on-line system for collection of development charges may be targeted in Medium Term (1-3
years).
Premium on Relaxation of Rules or Additional FSI/FAR
The instances of unauthorised construction are very high in the city of Bilaspur. It represents the need for regulating
and institutionalizing value capture tool of charging a premium on additional FAR. The base FAR in Bilaspur is 1.5.
It is suggested to provide for a sell-able FAR up to additional 0.25. There are approximately 60000 houses in
Bilaspur. The total area under the houses @ 200 sqm per house works out at 12 million sqm. If 5% house owners
go for purchase-able FAR of 0.25, this would result in selling of 150000 sqm of area under additional FAR. The
average circle rate for plots in Bilaspur works out at Rs. 23,000 per sqm and if the purchasable FAR is charged at
50% of prevailing circle rate this would result in potential revenue of 172.50 crore.
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Recommendations:
• Introduction of provision of sell-able FAR in the Act.
Time Lines:
• Require concurrence from State Legislative Assembly – A Medium Term Measure (1-3 years).
Remunerative Use of Land Parcels
As per SCP for Bilaspur, to meet the capital cost of implementation of smart city challenge proposal Rs. 2176 crore
will be mobilized through PPP channel. It is anticipated that 145 acres of land will be made available for
redevelopment. The SPV has to exploit 25% (i.e. 36.25 acre) of the total available land for commercial activities.
The total sellable area with FAR of 4.0 works out to 0.586 million sqm. The value capture from this @ Rs. 30000/-
per sqm would be Rs. 1758 crore. The shortfall of Rs. 418 crore post remunerative use of land parcels has to be
generated through user charges. This is a long term measure.
Revenue from Regularization of Unauthorized Colonies
Bilaspur Municipal Corporation is providing services viz. drainage works, road works, electrification, water supply,
etc. in regularized colonies. The Development Charge is levied @ Rs. 25 per sq ft. This will result in potential
revenue of Rs. 24.35 crore to BMC. The Development Charges in Bilaspur are currently levied at a rate of INR
53.80 per sq. ft to 107.60 per sq. ft on built up area depending on the usage, no of floor and size of plot under
developments. As discussed in the earlier section, the development charges when translated to the land value
(Collector Rate) on low valued plots works out at around 4.5% of the land value (Collector Rate). It was therefore
suggested to levy the Development Charges @ 4.5% of notified land rate. In cases of regularized colonies,
assuming that the land value (Collector Rate) is lowest i.e. Rs. 13000/- per sqm, the overall revenue potential could
be around Rs. 53.0 crore.
Expanding Municipal Limits
There are significant developments just across the Municipal Limits of Bilaspur and these developments to a large
extent enjoys the municipal services provided by Bilaspur Municipal Corporation. The stakeholder analysis
suggested to look into possibility of increasing the municipals limits and accordingly the consultant suggested the
mechanism to expansion of municipal limits. This however is a long term activity.
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CHAPTER 1:
BACKGROUND
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1 BACKGROUND
Rapid urbanization in India has led to increased demand for providing state-of-art infrastructure in Urban Local
Bodies (ULBs) and the ULBs are continually looking for new sources of funds in order to meet the requirements of
creating and upgrading infrastructure. In view of the challenges faced by the ULBs in making investments towards
infrastructure, the Ministries and Departments of the Government of India have to make huge investments for
infrastructure development at various levels.
As part of the systematic efforts to improve the urban infrastructure Swachh Bharat Abhiyan (SBA) or Swachh
Bharat Mission (SBM) or Clean India Mission was launched in October 2014. SBM is a campaign that aims to
clean up the streets, roads and infrastructure of India's cities, smaller towns, and rural areas. National Heritage
City Development and Augmentation Yojana (HRIDAY) was launched in January 2015 with the aim of bringing
together urban planning, economic growth and heritage conservation in an inclusive manner to preserve the
heritage character of each Heritage City. The Smart Cities Mission launched in June 2015 is an urban renewal
and retrofitting program with a mission to develop 100 cities all over the country making them citizen friendly and
sustainable. Atal Mission for Rejuvenation and Urban Transformation (AMRUT) was also launched in June 2015
and aims to establish infrastructure that could ensure adequate robust sewage networks and water supply for
urban transformation.
Several reports such as India Infrastructure Report 2009, High Powered Expert Committee (HPEC) Report 2011
and Working Group for the Twelfth Five Year Plan (2012-2017) have identified the significance of Land Based
Fiscal Tools (LBFTs) in the management of India’s urbanization, thereby providing the necessary impetus for
concentrated efforts in this direction.
A report prepared by McKinsey has estimated that in order to keep infrastructure at pace with development and
requirements of the cities in India, an annual investment of Rs. 3,25,000 crore in urban infrastructure is required.
The High-Powered Expert Committee (HPEC) Report 2011 projects urban infrastructure requirement to increase
from the current 0.75% of Gross Domestic Product (GDP) to 1.5% by 2031, i.e. Rs. 97,500 crore to Rs. 195,000
crore annually. However, at present the National Urban Missions are investing approximately Rs. 32,500 crore
annually, leading to an investment gap of Rs. 65,000 crore every year.
About Rupees One Lakh Crore investment on urban development under Smart Cities Mission (covering 100 cities)
and the Atal Mission for Rejuvenation and Urban Transformation (covering 500 cities) has already been approved
by the central government. The 99 cities selected so far in the Smart City Challenge competition have proposed
an investment of over Rs 2,01,979 crore impacting an urban population of over 9.95 crore. In the Smart City
Challenge Proposals, apart from mission grants, cities have identified multiple sources of revenue such as
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Public Private Partnership (PPP), Convergence with other schemes of Government of India, Corporate Social
Responsibility (CSR), Market Borrowings, Own Sources, etc. to finance the identified infrastructure investments.
Hence, strengthening the fiscal position of the ULB is necessary.
The State Governments generally fixes the rate for services being provided by ULBs, even though these functions
are mandated to be performed by ULBs under the 74th Constitutional Amendment. Overall, this has led to
increased dependency on State Governments and reduction in efforts made by ULBs to mobilize resources. In
order to address this situation and make ULBs more independent, Value Capture Finance (VCF) aims to identify
other sources of revenue, with special emphasis on land.
Own sources of revenue in ULBs can be classified into three categories, (i) taxes levied by the ULB, (ii) user
charges levied for provision of civic services, and (iii) fees and fines levied for performance of regulatory and other
statutory functions. At present the main source of revenue for any ULB is property tax, which has issues related to
its narrow tax base, exemptions, etc.
Land is the most fundamental asset that is owned and managed by the ULBs and is a resource to generate
revenues. The ULBs in past have tried to capture the value of land. However, for various reasons the concentrated
efforts did not result into desired objectives. The ULB cannot depend endlessly either to Centre or the State to
provide them with the “Grant” for creation and up-keeping of the infrastructure. The ULBs should therefore look at
alternate sources of revenue – Land Based Fiscal Tools (LBFT) is one of them.
1.1 INTRODUCTION TO VALUE CAPTURE FINANCE
Value Capture as practiced widely in the world is based on the principle that private land and buildings benefit from
public investments in infrastructure and policy decisions of Governments. Value capture is a type of public
financing tool to realize some or all of the value that public infrastructure and/or policy decisions of government
generates for private landowners. It refers to recovery of a share of the increment in land/property value, because
of actions other than the land/property owner’s investments. Appropriate Value Capture Financing (VCF) tools can
be deployed to capture a part of the increment in value of land and buildings. These can be used to fund projects
being set up for the public by the Central/State Governments and ULBs. This generates a virtuous cycle in which
value is created, realized, captured, and recycled again for project investment (Refer Figure 1).
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Figure 1 : Diagrammatic Presentation of the Concept of VCF
Source: Knight Frank Research
Public regulations, policies and investments are the starting point for a VCF process, resulting in value creation.
Private owners start realizing the value created on account of implementation of such policies, investments and
regulations.
The concept of VCF dates back to 1976. In the Vancouver Action Plan of the United Nations, it was proclaimed
that “the unearned increment resulting from the rise in land values resulting from changes in use of land, from
public investments or decisions, or due to the general growth of the community must be subject to appropriate
recapture by public bodies”. The basic principle is that creation of infrastructure or facilities result in positive
externalities which drive up the value of the land privately held by communities. Although, the increase may not be
realized (in the short, medium or long term) by the owner1, there is a need to capture this incremental value. It is
important to note that the concept of value here is implicit in nature. Figure 2 depicts this concept of VCF.
1The increased value will be realized only when the land is offered for sale or is redeveloped. This may happen for some members of the
community, but many may not embark upon selling / redeveloping their land in their lifetime.
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Net Increase in value after public investments

and externalities, thereof
Implicit value of land
Value without public

investments around the land
Time
Figure 2: Diagrammatic Presentation of the Concept of VCF
1.2 OBJECTIVE OF STUDY
The key objective for this study is to conceptualize and develop a framework (including procedural, legal and
institutional aspects) to generate revenue through VCF tools for Bilaspur, so as to effectively capture the additional
land/ property value generated through public investments made as part of the implementation of the AMRUT.
1.3 SCOPE OF THE ASSIGNMENT
The scope of the assignment covers:
1) Study of the MoUD report on land based fiscal tools and other reports.
2) Assessment of the existing VCF tools in the State and identification of areas where VCF can be applied in
following scenarios:
a) Coverage: Extending existing value capture tool from other parts of the State to the projects covered
under AMRUT.
b) Maximize Revenues: By changing existing rate structure in value capture tools of the State to enhance
revenues.
c) Scope: Compare with other States/Countries. Examine their relevance and appropriateness to the
State.
• Apply minimal changes to existing VCF methods leading to big increase in revenues;
• Identify new VCF tools leading to large revenue enhancement in the State in short term and long
term.
• Provide any other suggestions for effective use of VCF Tools
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3) For each of the selected methods technical assistance is to be provided to customize the VCF methods for
the State and it’s Urban Local Bodies (ULBs). This will include preparation of legal/executive orders,
amendments to regulations/rules, contract agreement etc. to enable quick roll-out of VCF methods.
4) For each of these suggested VCF tools, a Cost Benefit Analysis will be provided. The analysis would give
existing status, potential value, efficiency, equity, adequacy, manageability, legal feasibility, timelines (short,
medium, long) and general remarks
5) For each of these suggested VCF tools, draft contract agreements, draft government orders etc. for
implementing the proposed VCF tools will be developed.
6) For each of the suggested VCF tools, a standard contractual agreement/Memorandum of understanding will
be developed between the State, ULB and parastatals involved in order to have stability in revenue sharing
arrangements.
7) The Consulting Firm will also broadly study projects/modules/packages in the Smart City Proposals and
recommend most appropriate VCF method(s) for the project which may be incorporated in the Detailed
Project Reports and Financial Operation Plan of that project by the Smart City SPV.
8) For each of the suggested VCF tools, handholding support will be provided for implementation of the
interventions, and also support will be rendered in implementing changes in laws, government orders, bye
laws, etc.
1.4 NEED OF VCF FOR BILASPUR
Bilaspur is the second-largest city (after Raipur) in the state. Infrastructure development initiatives in Bilaspur are
being undertaken under Smart City Mission as well as AMRUT. A provision of INR 332.16 Crores has been made
under AMRUT for the city, of which INR 66.44 Crores are to be funded by Bilaspur Municipal Corporation.
The total cost of Bilaspur Smart City project is estimated at INR 3966.32 crores. The CAPEX of the projects
envisaged under the Smart City proposal shall be financed by Smart City Funds (INR 976.00 Cr); convergence
funds (INR 994.1 Cr) and an additional PPP of INR 2175.83 Cr.
To keep up with the ever-increasing financial pressure towards provision and maintenance of urban infrastructure,
the ULB has to depend on either grants or look for avenues for alternate sources of income. Additionally, ABD site
has a huge land bank of 145 acres available for redevelopment and funding PPP projects. This is encumbrance
free site and can help generate additional revenue through use of land based fiscal tools. This necessitates
development of Value Capture Financing Framework so that dependence of ULB on grants can be reduced.
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CHAPTER 2:
VALUE CAPTURE FINANCE TOOLS
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2 VCF TOOLS
Ministry of Housing & Urban Affairs, (formerly Ministry of Urban Development), Government of India under the
aegis of Capacity Building for Urban Development (CBUD) Project - A partnership program between Ministry of
Urban Development, Government of India & The World Bank released a Report on Land Based Fiscal Tools
(LBFTs) and Practices for Generating Additional Financial Resources in August 2013. The report examines the
LBFTs being used in different states in India and also in other countries. The report further proposes an LBFT that
could be devolved to ULBs to augment their revenue.
Government of India announced its first draft policy framework on VCF in July 2016, and revised policy framework
in June 2017. The VCF policy framework has been developed as an essential document to inform States and
Union Territories with concepts and key idea behind introducing VCF mechanisms at the local level to enhance
financial strength, and thereby provide better infrastructure. Two key points summarize the rationale for the VCF
policy for India – (1) direct sale of land to raise funds, which is prevalent in many urban areas in the country, has
been observed to be a less efficient way of value capture; (2) there are many value capture instruments in India
however, these are not applied comprehensively across ULBs and as a result, value realization potential is not
maximized.
2.1.1 STANDARD LAND BASED FISCAL TOOLS IN INDIA
Value capture is based on the principle that private land and buildings benefit from public investments in
infrastructure and policy decisions of governments. Appropriate VCF tools can be deployed to capture part of the
increment in value of land and buildings. In turn, these can be used to fund projects being set up for the public by
the central/state governments and ULBs. This generates a virtuous cycle in which value is created, realized and
captured, and used again for project investment. Various VCF instruments are practiced across the world. Some
of them are also in practice across different states of India.
Ministry of Housing & Urban Affairs, Government of India in their VCF Framework has identified the following
LBFTs tools:
2.1.2 Land Value Tax
Land Value Tax (LVT) is a tax whose amount is based on the value of property. A land value tax is a progressive
tax, in which the heaviest tax burden fall on the owners of valuable land. Land Value Tax is considered the most
ideal Value Capture tool which apart from capturing any value increment, helps stabilize property prices,
discourage speculative investments and it does not cause economic inefficiency, and also tends to
reduce inequality.
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In India, land value tax is levied by Tamil Nadu and Maharashtra. It is used for capturing value increment of the
land, other than agricultural land. In Tamil Nadu, the tax has a legal backing from the Tamil Nadu Urban Land Tax
Act, 1966. Under this Act all the urban lands were assessed to urban land tax, at a flat rate of 0.4 per cent on the
market value of each urban land. This market value of each urban land is determined, with reference to the sales
statistics of the land in and around the area where the urban land under reference is located. This Act provided for
the Valuation of each Urban Land for the purpose of Urban Land Tax.
Significant variations are observed over the rate structure provisions in different states. Some statutes stipulate
the maximum and/or minimum of the rates of the tax, as percentage of the annual rental, whereas in some other
cases no limit is indicated. Under the Bihar and Orrisa Municipalities Act, 1992, the maximum ceiling on the rates
of tax are fixed at 12.5 per cent of the annual rental value. The Himachal Pradesh Municipal Act, 1968 limits the
rate of general tax on buildings and land to 12.5 percent. The Karnataka Municipal Act, 1964, while fixing the
maximum ceilings on the rates of component taxes has also fixed the minimum limit on the rate of the aggregate
of all those taxes. In Karnataka the maximum limits for the tax on buildings and land is 10 percent. Under Kerala
Municipal Act, 1960, the minimum limits on general purposes tax is fixed at 5 per cent. The M.P. Municipal Act,
1961, fixed the maximum and minimum rates of general purpose tax at 12.5 and 5 percent of the annual value. In
the case of Haryana Municipal Act, 1973, where only a general tax on buildings and lands is allowed, the maximum
and minimum in respect of it are fixed respectively at 15 and 7.5 percent. Similar is the provision under Punjab
municipal Act, 1911.
Globally, land value tax is widely used in Denmark, Australia, and New Zealand. In New South Wales, the state
land tax exempts farmland and principal residences and there is a tax threshold. Determination of land value for
tax purposes is the responsibility of the Valuer-General. In Victoria, the land tax threshold is $250,000 on the total
value of all Victorian property owned by a person as at 31 December of each year, and taxed at a progressive rate.
In Tasmania the threshold is $25,000 and the audit date is 1 July every year. Properties with value between
$25,000 and $350,000 are taxed at 0.55% and over $350,000 they are taxed at 1.5%. Denmark, taxes the base
value of the land according to either (a) the total value of the property minus the value of improvements; or (b) the
value of the property last tax year, altered by a growth/decline percentage. Whichever of those two assessments
are lower, results in determining the base land value. This base land value is taxed at between 1.6% and 3.4%.
2.1.3 Development Charges (Impact Fee)
Development Charges (Impact Fee) is imposed by a local government on a new or proposed development project
to pay for all or a portion of the costs of providing public services to the new development. Impact fees are
considered to be a charge on new development to help fund and pay for the construction or needed expansion of
offsite capital improvements. Development charges (Impact fee) are area based and link the development charge
to the market value of land by carrying out periodic revisions.
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States like Andhra Pradesh, Gujarat, Maharashtra, Tamil Nadu and Madhya Pradesh levy Impact Fee and collect
it upfront while granting development permissions. In Hyderabad, the Impact Fee is charged based on the width
of the road abutting the property and it varies from Rs. 200/- to Rs. 400 per sq ft on total built up area. It is legally
backed by Andhra Pradesh Urban Areas (Development) Act, 1975 and under Special Development Regulations.
Development charges are levied in Punjab, backed by Punjab Municipal Corporation Act, 1976
Impact fee was introduced in USA in the year 1970 and became increasingly popular by the 1980s. The rise of
impact fees in the USA may be attributed to shrinking federal funding to the states and local governments,
increasing suburbanization, difficulties faced by the government in meeting the demands for new services, and
reluctance of existing taxpayers to contribute to providing services to new development through property taxes.
The American Planning Association (1997) issued policy guidelines for the use of impact fees. The guidelines
expressly state that impact fees are levied to finance only the new infrastructure services related to the needs of
new development; they cannot be used to fund any infrastructure backlog or for the operation and maintenance of
infrastructure services.
2.1.4 Betterment Levy
Betterment levy is a one-time upfront charge on the land value gain because of public infrastructure investments.
It could be as a result of area or project-based intervention. It is considered the most direct form of value capture.
Whereas development charges (impact fees) work from the cost side of budgets, betterment levies try to capture
part of the infrastructure investment already incurred by the government.
In India, the Mumbai Metropolitan Regional Development Authority (MMRDA) Act, 1974 provides for levying
betterment charges for specific projects. The Hyderabad Municipal Corporation Act, 1955 originally provided for
the levy of betterment charges to meet the costs of internal infrastructure and services in the case of development
projects. In the late nineties, the Government of Andhra Pradesh amended the Act to enhance the scope of such
levy to include external betterment. Uttar Pradesh has provision of imposing betterment levy in Uttar Pradesh
Urban Planning & Development Act, 1973. Ghaziabad is already imposing betterment levy on approvals along the
500m buffer of the metro line. Gujarat levies betterment fees under all town planning schemes. Bengaluru levies
betterment fees on properties registering under the Bruhat Bengaluru Mahanagara Palike (BBMP) region.
Internationally, the UK imposes betterment levy equal to 40% of the land value gain attributed to public
investments. In United States, the betterment levy or special assessment is a compulsory charge imposed by a
government on the owners of a selected group of properties to defray, in whole or in part, the cost of a specific
improvement or services that is presumed to be of general benefit to the public and of special benefit to the owners
of such properties. In Colombia this levy, called Contribución de Valorización (CV), has been collected since 1921.
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2.1.5 Vacant Land Tax
Vacant land tax is levied annually until the building is constructed on the plot. It is applicable on those landowners
who have not yet initiated construction on their lands. It is an area-based intervention. The objective to levy the tax
is to discourage owners to keep the land vacant in urban areas and to prevent hoarding.
The Greater Hyderabad Municipal Corporation (GHMC) under the Hyderabad Municipal Corporation Act, 1987
imposes an annual tax of 0.5% of the registration value of the land if not used exclusively for agriculture purpose
or is vacant without a building. In Tamil Nadu, vacant land tax is charged under provisions of Tamil Nadu District
Municipalities Act, 1920 and it varies from Rs. 0.20 to 0.60 per sq. ft. depending on the location of the plot. The
Karnataka Municipalities (Amendment) Ordinance, 2003, provides for tax on vacant land measuring not above one
thousand square meters, at not less than 0.1 per cent and not more than 0.2 per cent of taxable capital value of
land; tax on vacant land measuring above one thousand square meters but not above four thousand square meters
at not less than 0.025 per cent and not more than 0.05 of taxable capital value of land; and tax on vacant land
measuring above four thousand square meters at not less than 0.01 per cent and not more than 0.02 per cent of
taxable capital value of land. In Delhi the Vacant Land Tax on residential properties is charged at 7% to 12% of
the annual ratable value.
Internationally, Bolivia levies a surcharge of 2 percent on the ideal land that has access to public utilities and 1
percent on the ideal land that does not have access, above the basic rate of 0.4 percent of market value. In
Honduras, the basic property tax rate is 0.5 percent, but the vacant land is subject to a 1 percent rate.
2.1.6 Fee for Changing Land Use
Fees for changing land use are levied once by the Development Authority/Town & Country Planning Department
at the time of giving permission for change of land use. Development Control Regulations/ Building Bye-Laws
provides for procedure to obtain permission for change of land use. It as an area-based intervention.
Almost all states in India have such provisions in their Town and Country Planning Acts e.g. in Punjab, Maharashtra
and Andhra Pradesh the change of land use is backed by Punjab Regional & Town Planning & Development Act,
1995; Maharashtra Regional Town Planning Act, 1966; and Andhra Pradesh Urban Area (Development) Act, 1975
respectively.
Internationally United Kingdom, France, Singapore, China and many other countries permit change of land use
against a charge/ fee by following a process.
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2.1.7 Transfer of Development Rights (TDR)
Transfer of Development Rights (TDR) is a process of making available certain amount of additional built up area
in lieu of the area relinquished or surrendered by the owner of the land, so that the owner can use the extra built
up area either for himself or transfer it to another in need of the extra built up area for an agreed sum of money. It
is an area/project-based intervention and is levied one-time while taking permission for TDR. It is used for trading
development rights. TDR is granted only for prospective development and not for past developments. The essential
elements for success of TDR are (a) demand for bonus development in the receiving area; (b) receiving areas
customized for the community; (c) strict sending area development regulations; (d) few or no alternatives to TDRs
for achieving additional development; (e) market incentives; (f) ensuring use of TDRs; (g) TDRs banks; etc.
Maharashtra, Karnataka and Gujarat have enabling laws for using TDRs for developing open spaces, promoting
affordable housing, etc. Ahmedabad uses TDRs for preservation of heritage open spaces or cultural resources
and is a way to compensate property owners for loss in revenue on their properties. In Mumbai, it is used for slum
rehabilitation schemes, where a minimum of 70% of eligible slum dwellers in a pocket have come together to form
a cooperative housing society for implementing the scheme. It is backed by the development control regulation
(DCR) norms of the area.
The concept of transferring development rights between properties was first introduced in New York City with the
passage of the first American Zoning Ordinance in 1916. In a rural/regional setting, the South Australian
Government introduced TDRs in the Mount Lofty Ranges near Adelaide in 1992. The scheme proposed to allow
the transfer of development rights from a water protection area where existing zoning did not allow additional
housing and land subdivision, to areas more appropriate for urban expansion and infrastructure provision. It was
abandoned and generally considered a failure. A key reason for the failure was that planning authorities did not
identify and resolve clear sending and receiving areas (Industry Commission 1998, Williams 2004). TDRs, and/or
instruments with similar features, have also been used in more urban settings to preserve heritage buildings in
Adelaide, Brisbane, Melbourne and Sydney. The owners of historic buildings can transfer unused development
rights from a heritage site to a development site, which can then be developed to greater intensity than would
otherwise be allowed. The owner of the heritage site then enters a binding agreement with the relevant planning
authority to preserve the heritage building. They also receive compensation for the loss of development rights that
can facilitate the refurbishment and rehabilitation of historic buildings. Additionally, TDRs have been introduced for
urban growth management objectives in Wellington Shire in New South Wales, and open space conservation on
the New South Wales-central coast and south coast.
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2.1.8 Premium on Additional FSI/FAR
Premium on additional FSI/FAR is one-time charge levied to provide permission for using additional FSI/FAR
beyond permissible limits on any parcel of land. It is a project-based intervention. Often such developments are
justified by infrastructure augmentation resulting in higher carrying capacity of the neighborhood. Transit oriented
development policies often permit denser development along the augmented transport corridors. Such high-density
development relaxations are supported by purchasable FARs
More and more States are coming with the policy of saleable FSI/FAR. It is widely used in Maharashtra, Karnataka,
Gujarat and Tamil Nadu to allow for additional development rights beyond the permissible limits in the state town
planning laws and regulations. Nagpur Municipal Corporation (NMC) has adopted a policy of increasing FSI/FAR
by 0.3 by paying premium to it. The premium will be charged at the rate of 60% of ready reckoner value for
residential constructions and at the rate of 90% for commercial constructions. Half of the premium collected by
NMC will go to the state government. This policy is only applicable for non-congested areas.
New Delhi, Nagpur, Pune, Ahmedabad, Faridabad are amongst some of the cities where Transit Oriented
Development Policies have been notified.
Internationally sale of additional FAR is an important value capture tool in Brazil and France. The French land-use
policy restricts landowner’s building right to a low baseline FAR and additional FAR has to be purchased.
2.1.9 Land Pooling System
Land pooling system is a form of land procurement where all land parcels in an area are pooled, converted into a
layout, infrastructure developed, and a share of the land, in proportion to original ownership, returned as
reconstituted parcels. It is an area-based intervention and is used one-time for planned development purposes.
The land owners contribute their land voluntarily and are made stakeholders in the process of the development.
In India, Gujarat and Haryana have used land assembly programmes, where the owners agree to exchange their
barren lands for infrastructure-serviced smaller plots. Gujarat has used these tools to guide the development of
Ahmedabad city and its surrounding infrastructure. Andhra Pradesh has used it to acquire land for Amravati, its
new capital city. In view of the challenges faced for land acquisition and development, more and more states in
India are coming up with the policy of Land Pooling. The usual ratio of land acquired to land returned in Gujarat is
40:60, with the landowner getting back 60% of land. The ratio in Amaravati is closer to 70:30, with the landowner
getting back only 30% of land. Delhi also introduced the land pooling policy in the year 2017.
Internationally, it is a common feature in Germany and Japan.
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2.1.10 Land Acquisition and Development
Land acquisition refers to the process by which the Union or a State Government acquires private land for the
purpose of development of infrastructure facilities or urbanization of the private land, and provides compensation
to the affected land owners and address their need for resettlement and rehabilitation. It is an area-based
intervention and is used one-time for acquisition and developing the land.
Land acquisition in India is governed by the Right to Fair Compensation and Transparency in Land Acquisition,
Rehabilitation and Resettlement Act, 2013 (LARR) and which came into force from 1 January 2014. This Act
superseded the Land Acquisition Act of 1894. In view of the challenges faced in acquisition of land due to high
initial costs, resistance from the land owners, displacement of host community, etc., land acquisition has paved
way to land pooling mechanism.
2.1.11 Tax Incremental Financing (TIF)
In Tax Increment Financing (TIF), the incremental revenue from future increase in property tax or a surcharge on
existing property tax rate is ring-fenced for a defined period to finance new investments in the designated area. It
is a project-based intervention and is levied annually for a fixed period of time.
In India, Hyderabad has used TIF for funding the development in 800 peripheral neighbourhoods under the purview
of Hyderabad Municipal Corporation Act, 1987.
Internationally, thousands of TIF districts currently operate nationwide in the U.S. With the exception of Arizona,
every state and the District of Columbia has enabled legislation for tax increment financing. Some states, such
as Illinois, have used TIF for decades, but others have only recently embraced TIF.
Summary of provision of Standard VCF Tools in various states in India is presented in Table 2.1.
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Table 2-1: Summary of Provision of Standard VCF Tools in various States in India
State Urban Land Conversion Betterment Development TDR Sellable FSI Vacant Land TP Scheme
Tax Charges Levy Charges/ Tax
Impact Fee
Andhra Pradesh √ √ √ √ Φ Φ √ √
Arunachal Φ √ √ √ Φ Φ Φ Φ
Assam √ √ √ Φ Φ Φ Φ Φ
Bihar Φ √ √ √ Φ Φ √ Φ
Chhattisgarh Φ Φ √ √ Φ Φ √ √
Goa √ √ √ √ Φ Φ Φ √
Gujarat √ √ √ √ √ √ Φ √
Haryana Φ √ √ √ Φ Φ Φ Φ
Himachal Φ Φ Φ √ Φ Φ √ Φ
Karnataka √ √ √ √ √ √ Φ √
Kerala Φ √ √ √ √ √ Φ √
Madhya Pradesh Φ Φ √ √ Φ Φ Φ √
Maharashtra √ √ √ √ √ √ √ √
Meghalaya Φ Φ √ Φ √ Φ √ Φ
Mizoram Φ √ √ √ √ Φ √ Φ
Nagaland Φ Φ √ √ Φ Φ Φ √
Orissa Φ Φ √ √ √ √ Φ √
Punjab Φ √ √ √ Φ √ Φ √
Rajasthan √ √ Φ √ √ √ √ √
Sikkim Φ Φ Φ √ Φ Φ Φ Φ
Tamil Nadu √ √ √ √ √ √ √ √
Tripura Φ √ Φ √ Φ Φ √ Φ
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State Urban Land Conversion Betterment Development TDR Sellable FSI Vacant Land TP Scheme
Tax Charges Levy Charges/ Tax
Impact Fee
Uttar Pradesh Φ √ √ √ √ √ Φ Φ
Uttarakhand Φ √ √ √ Φ Φ √ Φ
West Bengal √ √ Φ √ √ √ Φ Φ
√ Provision Exists: Φ No Clear Provision
Source: Value Capture Financing Policy Framework, Ministry of Urban Development, Government of India, February 2017
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2.2 ADDITIONAL LAND BASED FISCAL TOOLS IN INDIA
Apart from the tools mentioned in the previous section, ULBs have been using other methods to capture value
from the land. Some of them are:
2.2.1 Regularization of Unauthorized Development
Supply of affordable housing in Indian cities is a very big challenge and the resultant is upsurge of unauthorized
developments in all the ULBs. The ULBs / Development Authorities from time to time under socio-political
pressures have been regularizing these unauthorized developments making them integral part of the planning.
This result in manifold increase of land/property values which in most the cases is not captured and remains with
the private owners.
Many of the Indian States have legal backing in form of Acts for regularization of unauthorized development. Some
of the examples are: Gujarat Regularization of Unauthorized Development Act, 2011; Guidelines for regularization
of unauthorized development in Delhi, 2007 prepared by Ministry of Urban Development, Government of India;
The Regularization of Unauthorized Developments in the City of Ulhasnagar Act, 2006; The Chhattisgarh
Regularization of Unauthorized Development Act, 2002; Tamil Nadu Town and Country Planning Act, 1971; etc.
2.2.2 Property Development for Leasing
Most of the Urban Local Bodies / Development Authorities in India hold some land bank. This land either has
government offices or residences for government employees or utilities/ facilities or is used for generating revenues
through leasing or out-right sale. The utilization of land however in all the cases is not optimum.
Traditionally, States/ULBs have relied on direct sale of lands to raise funds, which is a less efficient form of resource
mobilization, as compared to value capture. The State/ULB should shift their paradigm to property development
linked short-term leases on such properties, rather than out-right sale or perpetual lease to ensure that they keep
on harvesting the benefits of value capture on the land for which they have invested in creating the infrastructure.
2.2.3 Charging Extra Stamp Duty
Stamp duty is charged by the revenue department on all property transactions. A surcharge on stamp duty is often
utilized by the government to finance major infrastructure developments in a city. This is an effective value capture
tool as it is linked to market value of the property. Also, the tool is used when a property owner exercises the sale
option of the property, thus realizing the gains on property price appreciation.
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Government of Maharashtra has implemented a 1% surcharge on all property transactions within the Nagpur
Municipal Corporation limits to fund Nagpur Metro Development. Money so collected are shared between Nagpur
Municipal Corporation and Nagpur Metro Development Authority and are redeployed for infrastructure
augmentation in the city.
2.2.4 Purchasable Development Control Regulations
Enforcement of rigid building control regulations has traditionally been a weak link with ULBs. Building violations
are rampant across the country. The nature of these violations varies on criticality from lower scale involving
balcony / terrace coverage, construction in set-backs, to highly critical ones involving encroachments. The less
critical construction violations are often regularized / compounded after collection of a fee. Such regularization is
usually allowed after the construction has been completed.
Often some development control regulations are considered relaxable, and hence are quite common. Such
development control deviations can also be made into purchasable development control relaxations. Since such
relaxations come with benefits to property owners, they can also be charged linked with the value increments
involved. Examples of some such chargeable relaxations include:
1. Relaxation on density norms, while maintaining the FSI. Such relaxations facilitate a developer to
construct smaller units resulting in greater efficiency of his product design.
2. Greater ground coverage for retail property developments. The resultant higher floor plate significantly
improves the value of retail development.
3. Balcony / terrace coverage, setback relaxations, and many other similar relaxations can also be made
chargeable
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CHAPTER 3:
CITY PROFILE
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Final Report
3 CITY PROFILE
Bilaspur, the Judicial Capital ‘Nyaydhani2’ of Chhattisgarh State, strategically the Gateway to North Chhattisgarh,
is situated 133 kms north of the state capital, Naya Raipur at 22.090N latitude / 82.150E longitude and an average
elevation of 264 meters. The Bilaspur Municipal Corporation + OG has an area of 48.53 sq. km with total population
of 3,65,579 (Census 2011), which is divided into 61 wards.
Bilaspur town is situated on the banks of the rain-fed Arpa River, which originates from the high hills of the Maikal
Range of central India. This dolomite rich region is surrounded by lush green forests in the north and the coal
mines of the Hasdeo valley in the east.
In terms of rail connectivity, Bilaspur town is also the Headquarter of Indian Railways highest revenue generating
zone ‘South East Central Railway’. It has direct connectivity with New Delhi, Mumbai, Kolkata, Chennai,
Ahmedabad and all major cities of the country. Bilaspur City houses the largest Railway station of the state. The
town is well connected with the state capital Raipur via NH-130 (Refer Figure – 3). Because of its strategic location
and good connectivity, the city has made a mark on the tourism map of the state. Important tourist locations like
Achanakmar Tiger Reserve, Ratanpur Mahamaya Temple, and Heritage Temple at Taala are within 25-30 km from
the city.
3.1 DEMOGRAPHIC PROFILE
A brief profile of the Bilaspur City is depicted in Table 3-1 below:
Table 3-1: Brief Profile of Bilaspur City (Census 2011)

Total Male Female
City + Out Growth Areas 3,65,579 1,88,342 1,77,237
City Population 3,31,030 1,70,410 1,60,620
Literates 2,58,636 1,39,852 1,18,784
Children (0-6 years) 37,552 19,730 17,822
Average Literacy Rate 88.13% 92.81% 83.18%
Schedule Caste Population 49,663 Schedule Tribe Population 17,868
Gender Ratio 941 Child Gender Ratio 903
Density (Census 2011) 7,533
Source: Census India 2011
2 The Chhattisgarh State High Court, located at village Bodri, District Bilaspur has privileged it with the title 'Nyayadhani' ((Hindi: न्याय
धानी) Law Capital) of the state.
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Figure 3 : Regional Setting of Bilaspur
The population within the Bilaspur Municipal Corporation (including the outgrowth areas) has been increasing
consistently and has recorded a decadal growth of about 32.6 per cent between 2001 and 2011. The population
trend from 1981 to 2011 has been shown in the Figure 4 below:
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400000 365579
350000
Population - Bilaspur MC +OG
300000 275694
250000 207965
200000 174260
150000
100000
50000
0
1981 1991 2001 2011
Figure 4: Population Growth in Bilaspur Municipal Corporation (Source: Census of India)
Over the 2001-11 decade, the sex ratio of Bilaspur has improved from 921 in 2001 to 941 in 2011. However, this
is still significantly lower than the state average of 991 in 2011. Figure 5 below compares the gender ratio of the
Bilaspur MC including OG with the state trends in last two decades.
1000 989 991
980
960
Sex Ratio
941
940
921
920
900
880
2001 2011
Bilaspur CG
Figure 5: Gender Ratio Comparison of BMC & State
Child population (0-6 age group) in the municipal limits (including outgrowths) stood at 42,363 in 2011 constituting
about 12% of the total population. The total share of Schedule Caste (SC) and Schedule Tribe (ST) population
within BMC limits (including outgrowths) is 14 per cent and 5 per cent respectively. The gross population density
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for BMC +OG is 7533 persons per sq. km. The ward-wise population based on Census 2011 is presented in Table
2. Wards having highest density include Ward no. 45, Ward no. 42 and Ward no. 7.
It may be noted that currently there are 66 wards in Bilaspur MC +OG (refer Figure 6) as per the latest ward map
available from BMC, however as per Census 2011, there are 61 wards in Bilaspur MC +OG area. The analysis in
this report has been done considering 61 wards as most of the data is available for 61 wards including the census
data. Below is the ward wise population distribution for BMC + OG areas. Ward-wise distribution of population and
number of households in given in Table 3-2.
Table 3-2: ward wise population distribution Ward Number Ward Population Households
Ward Number Ward Population Households Ward 0032 4962 1057
Ward 0001 5497 1232 Ward 0033 5906 1272
Ward 0002 8607 1850 Ward 0034 3327 696
Ward 0003 8646 1998 Ward 0035 3485 711
Ward 0004 9515 2137 Ward 0036 8374 1713
Ward 0005 4245 708 Ward 0037 5270 1106
Ward 0006 5363 1212 Ward 0038 9587 1965
Ward 0007 11890 2457 Ward 0039 5148 952
Ward 0008 3099 636 Ward 0040 9732 2102
Ward 0009 7736 1747 Ward 0041 10693 2270
Ward 0010 6021 1266 Ward 0042 12769 2682
Ward 0011 5023 647 Ward 0043 6245 1299
Ward 0012 9544 1976 Ward 0044 10038 2246
Ward 0013 9062 1855 Ward 0045 15173 3366
Ward 0014 9110 2031 Ward 0046 9107 2032
Ward 0015 7324 1515 Ward 0047 5756 1168
Ward 0016 3541 713 Ward 0048 6862 1435
Ward 0017 4665 885 Ward 0049 2336 561
Ward 0018 4672 1019 Ward 0050 3949 952
Ward 0019 2232 429 Ward 0051 2754 707
Ward 0020 3024 636 Ward 0052 3181 728
Ward 0021 2553 475 Ward 0053 4208 977
Ward 0022 3120 612 Ward 0054 3944 895
Ward 0023 2391 440 Ward 0055 4503 1151
Ward 0024 5526 1109 Ward 0056 7547 1500
Ward 0025 5848 1107 Ward 0057 5058 1076
Ward 0026 2274 447 Ward 0058 14990 3163
Ward 0027 3651 643 Ward 0059 2866 656
Ward 0028 7552 1507 Ward 0060 1276 282
Ward 0029 4481 916 Ward 0061 2812 638
Ward 0030 3967 790 Total 365,579 77,065
Ward 0031 3542 712
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Source: Bilaspur Municipal Corporation and Knight Frank Research
Figure 6: Ward Boundary Map - Bilaspur City
The average literacy rate within BMC is 87.65 per cent is higher than the literacy rate in the country (74.04%). The
literacy rate among males in higher and stands at 92.5 per cent as compared to 82.53 per cent among females.
3.2 CITY GROWTH
The spatial urban growth dynamics reveals that urban growth occurred mainly during last two decades. With the
growth and passage of time, the city core continues to become denser and denser along the river with a significant
outward expansion along the transit corridors. As a result, maximum growth has been witnessed along the major
road network and rail corridors. Figure 7 presents the spatial growth of Bilaspur city over the years.
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Figure 7 : Spatial Growth of Bilaspur City
3.3 ECONOMIC PROFILE
The process of industrialization in Bilaspur started with the establishment of South Eastern Coal Limited (SECL)
in 1985. Apart from SECL, NTPC power plant, having a capacity of 2980 megawatts are another large scale public
sector undertaking in the district. Furthermore, there are 22 medium scale enterprises registered in the district. As
of 2015-16, there were a total of 19746 registered micro and small units, employing over 50,000 people in Bilaspur.
Bilaspur is the center of electric power generation in India. Bilaspur and the surrounding area generate 10,000 MW
of electricity, and an additional 50,000 MW are planned in the next few years. Around Bilaspur, there are many
industrial areas, including Tifra, Sirgitti and Silpahri Industrial Growth Centres. Sirgitti, Silpahri and Tifra around
Bilapur are major industrial areas near Bilaspur. Located on the outskirts of Bilaspur city, Sirgitti Industrial Centre
is spread over an area of approx. 338 hectares. With about 324 industries it provides direct employment to 4431
persons. Silpahari Industrial Centre is another industrial area near Bilaspur and is home to many sponge iron
industries. Tifra Industrial Area situated on the outskirts of Bilaspur city is spread over an area of approx. 65
hectares. Many chemical, PVC footwear, HDPE woven sacks, polythene bags and sheets, soft drinks and other
units are located here.
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Of the total population, approximately 35 per cent (125,636 Cultivators Agricultural

2% Household
persons) constitute the workforce. Of this, about 1.16 lakhs 1%
Industry
Workers
(93 per cent) are main workers, while the remaining 8,666 2%
(7 per cent) are marginal workers. Sector-wise bifurcation
of main workers reveals that 95 per cent are employed as
“Other Workers”. The distribution of workers under the
main workers category is graphically depicted in Figure –
8. The type of workers that come under this category of
'Other Workers' include all government servants, municipal
employees, teachers, factory workers, plantation workers, Other
Workers
those engaged in trade, commerce, business, transport 95%
banking, mining, construction, political or social work,
Figure 8: Distribution of Workers in Bilaspur
priests, entertainment artists, etc.
3.4 RESIDENTIAL AND COMMERCIAL PROPERTIES
There are 55,988 residential properties in Ward No. 1 to 59 (refer Table 3-3) within the BMC area as per the
property tax - demand generated for year 2016-17. The details for Ward No 60 Behtarai (OG); Ward no 61 Mopka
(OG) were not available as per census 2011 data.
Table 3-3: Ward wise Distribution of Residential Properties
Old Ward New Ward No. of Residential Old Ward New Ward No. of Residential
No. No. Properties No. No. Properties
1. 1. 1421 16. 20. 787
2. 2. 1262 17. 21. 975
3. 3. 2160 18. 22. 660
4. 19. 23. 372
4. 1710
5. 20. 24. 573
5. 6. 557 21. 25. 448
6. 7. 1071 22. 26. 736
8. 23. 27. 479
7. 2317
9. 24. 28. 1696
8. 10. 580 25. 29. 985
9. 11. 2489 26. 30. 387
10. 12. 1147 27. 31. 589
11. 13. 854 28. 32. 1023
12. 14. 1135 29. 33. 526
15. 30. 34. 1213
13. 1598
16. 31. 35. 647
17. 32. 36. 839
14. 2393
18.
15. 19. 1012
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Old Ward New Ward No. of Residential Old Ward New Ward No. of Residential
No. No. Properties No. No. Properties
33. 37. 951 54.
45. 2031
34. 38. 614 55.
35. 39. 476 56. Ameri
36. 40. 1535 (OG)
37. 41. 913 46. 57. Uslap 2057
42. ur
38. 1970 (OG)
43.
39. 44. 826 58. Mangl
47. 1084
45. a (OG)
40. 1668 59. Khamt
46.
47. 48. arai 1059
41. 1828 (OG)
48.
49. 60. Behtar
42. 2296 ai Not Available
50.
43. 51. 678 (OG)
52. 61. Mopka
44. 1361 Not Available
53. (OG)
Source: Bilaspur Municipal Corporation (BMC)
Area-wise list of registered commercial properties in Bilaspur has been given in the Table 3-4 below. Maximum
numbers of shops are in Shanichari Mandir and Andar Deri area, followed by Gol Bazar, Purani Hatri and Keru
Mandir.
Table 3-4: Location-wise Distribution of Commercial Properties

Locations No. of Shops
Tilak Nagar, Brihaspati Bazar, Raghvendra Hall, Company Garden, Town Hall, 147
Ashok Prasoti
Gol Bazar, Purani Hatri, Keru Mandir 404
Shanichari Shastri Mandir, Shanichari Andar Deri 974
Nagorav Dayalband 30
Indira Setu, Jarhabhata, Subhash Complex, Magarpara, Sanjay Taran Pushkar 106
Motor Stand, Purana Arpana Complex 263
Rajiv Plaza 345
Total 2269
3.5 INFRASTRUCTURE
Water Supply
At present, the BMC’s water supply system covers 60 per cent of the population and has a distribution
network of 417 km. Supply of water, which is dependent solely on ground water, currently stands at 44.85
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MLD, which is expected to increase to 65 MLD by 2021. NRW accounts for more than 60% of the total supply and
the efficiency in cost recovery has increased to 86%.
Sewerage
The existing sewerage network coverage stands at 6% within the BMC area. Sewage generation stood at 48 MLD
in 2007, which is expected to increase to 71 MLD by 2022. Furthermore, initiatives are being undertaken to improve
the sewerage network and efficiency. According to the credit rating report, the sewerage treatment capacity is
planned to be augmented to 71 MLD and sewerage line to 225.15 km covering an area of 304 km.
Particulars Coverage
Sewerage Network 3,214 households
Septic tank 50,471 households
Without any outlet for toilet 207 households
Storm Water Drainage

The total drainage network of Bilaspur is estimated around 426.12 km, mainly comprising of the (almost 89%) open
drains network. Break-up of this network is given below:
. Particulars Coverage
Natural major drains 14.70 km
Storm water drains 30.42 km
Road side drains 381.00 km
Solid Waste Management

As per the credit rating report, the solid waste collection efficiency stands at 100 per cent. The daily waste
generation stands at 129 MT for BMC area. The BMC has deployed 68 vehicles and 1559 staff members for
addressing the solid waste management requirement.
Parks & Open Spaces

As per guidelines of AMRUT mission, development of green spaces/parks (at least one in each ULB) is to be given
due importance under the mission. As per the existing Master plan, there are a total of 149 parks within the BMC
limits, of which 59 parks are developed with green carpeting; boundary walls etc. and approximately 90 parks are
undeveloped.
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Under the AMRUT mission, government plans to spend 8.08 Cr in developing neighborhood parks (50 no’s);
housing area parks (93 no’s) and two community parks.
3.6 SMART CITY PROJECT INTERVENTIONS
Bilaspur strives to be a growing and vibrant world-class city with a flourishing economy and a pristine environment,
where residents especially women are empowered, safe, healthy and have equitable opportunities for success
and happiness.
3.6.1 Area Based Development Proposal
The key idea of ABD project is to undertake retrofitting and redevelopment of CBD located at the heart of Bilaspur.
The area to be covered under the project is approximately 1,041 acres.
Figure 9: Area covered under ABD Project
Source: Bilaspur Municipal Corporation (BMC), Smart City Challenge Proposal – Bilaspur and Knight Frank Research
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Details of the area-based proposal have been given below in Table 3-5:
Table 3-5 : Details of the Area Based Proposals under Smart city in Bilaspur
Particulars Details
Baney Sudhrid • 24x7 Electric supply with underground electric wiring
Infrastructure • Installation of solar plants and roof top solar panels
• 100% sewerage access and 30% Integrated treatment
• Grey water reuse and Dual Piping implementation
• 100% sustainable SWM through Integrated waste management
• Provision of Public zero discharge Integrated toilet clusters with Water ATM and Public
Laundry for BBCS
Particulars Details
Baney Jal • 24x7 water supply with revamped storm water system for rejuvenating ponds and
mandatory rainwater harvesting
Baney Ghar • Provision of Housing for all through Beneficiary led, Credit linked and Affordable
housing both in In-situ and ex-situ models
Baney Utthaan • Skill development in Municipal schools in evening on PPP model
• Vendor up gradation with Modular Kiosk and Online allotment
• Startup center with EoDB facilitation centers
Baney Swasth • Public Toilets, Barrier free Divyang friendly infrastructure
• NMT infrastructure
• one-touch Emergency response,
• e-medicine,
• Mosquito free city
• Open gyms
• Green Necklace, shared space sports Infrastructure and
• Rent-a-Cycle scheme
Baney Hariyar • Development of public open spaces at 11 locations with urban plaza creation,
integrated street sections and Vertical greens
• Provision of e-rickshaws by phasing out of auto's & cycle rickshaws
• Installing Air quality monitoring stations at 7 locations with Online real time air quality
monitoring, forecasting & Advisory
• Hydrological information system with early flood warning and water recharge app
Baney Bazar • Developing the existing thematic markets and Parking into Integrated hubs (5 sites)
• Innovative solutions of 24x7 city with pedestrianization during day and servicing during
night, Vertical Gardens and Food & Local art Haat.
Baney • A Net-Zero revolutionary e-rickshaw rapid transit system
Parivahan • Provision of Smart bus Shelters integrated with e-Toilets
• 6 multi-modal and logistics hubs
• Improvement of Major Roads, revamped intersection & Smart parking
Baney Bilaspur • Creation of Common Signage & LOGO for city
• Rejuvenation of Cultural and Historical past through revamped monuments, Street Art
and Bilaspur Carnival
• Green buildings development.
• Replication of a unique set of 36 PPCP projects
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Particulars Details
Baney • 100% fiber linkage across Baney Bilaspur Operation System (BBOS)
Ekikaran • Fiber access to all Schools and hospitals
• Creating more Wi-Fi hubs, ATP Centers
• CCTV coverage
• Panic buttons
• Asset management for waste and water,
• GIS based property database linked to other verticals,
• Command & Control Center
• Bilaspur Smart City Card with digital wallet
• Health education & mobility integration
• crowd sourcing & community policing and
• Bilaspur City OS with an integrated City App/Portal
3.6.2 Pan City Proposal
Two pan-city initiatives proposed are:

• Intelligent Transport System to integrate traffic management, Smart Parking, Transit solution with AVL,
Multi-Modal usage integration, transaction management and issuance of challans.
• Baney Bilaspur Operations System: would be developed with the following components:
o GIS based Property survey with unique ID has been already performed in Bilaspur. With Aadhar seeding
this will be linked to every city vertical and cross referenced for Property to service mapping. This will be
backbone for every service delivery, redressal, data collation and analytics and monetization.
o Integrating the services on a single command and control center through city OS
o Management of potable & waste water through SCADA, smart metering, GIS asset mapping & consumer
indexing and online bill payment system
o CCTV monitoring of secondary and primary dumping sites, GPS based tracking and optimum routing,
RFID and bin monitoring with Geo fencing
o Solar energy management through integrated portal
o An integrated app for services related to health, education, mobility, parking, real time information, crowd
sourcing, community policing, e-rickshaw booking based on interactive GIS map of the city
3.6.3 Project Costing
The capital estimated for Bilaspur Smart City Challenge Proposal (SCP) including both Pan-City and Area Based
Projects is INR 3966.2 Crores. Under this, 55 projects/interventions would be taken up under area-based
development and 15 under pan city solutions. The estimated project capital cost for ABD plan and Pan-City plan
is INR 3662.82 crores and INR 303.50 crores respectively. (refer table 3-6)
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Table 3-6: Project-wise estimated capital cost of Smart City proposal
Particulars Allocation (INR Crores)

Total Cost of Area Based Development 3662.82
Baney Sudhrid Infrastructure 808.65
Baney Jal 103.34
Baney Ghar 19.28
Baney Utthaan 662.61
Baney Swasth 25.60
Baney Hariyar 84.43
Baney Bazar 1283.80
Baney Parivahan 634.87
Baney Bilaspur 26.54
Baney Ekikaran 13.70
Total cost of Pan city proposal 303.50
Intelligent Transport System 209.50
Baney Bilaspur Operations System 94.00
Source: Smart City Challenge Proposal – Bilaspur
3.7 AMRUT PROJECT
Of approximately INR 2193 crores sanctioned by central

government for Chhattisgarh, Bilaspur receives the highest
amount of funds (INR 332.15 Crores) after Raipur. This is
primarily because these two cities have also been
shortlisted under the Smart City Mission, and hence get
preference while allotment of funds.
In terms of sector, the maximum allotment has been done

to water projects (approximately 92 per cent), followed by
sewerage and open space projects. Sector-wise
Figure 10: Resource Allocation - Source: State Annual
allotments of funds under AMRUT for a period of 2015-2020 Action Plan 2017-2020
are given below:
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Sector-wise allotments of funds under AMRUT for a period of 2015-2020
Figure 11 : Sector-wise allotments of funds under AMRUT (2015-2020)
Source: State Annual Action Plan, Chhattisgarh
Source-wise, the breakup of funds under AMRUT is as follows:
Figure 12: Source-wise break-up of AMRUT funds for Bilaspur
Source: State Annual Action Plan, Chhattisgarh
While center and state do contribute in funding of the project, ULBs also have to bring in their own funds. Presently,
the urban local bodies still struggle to source their share of funds. Value capture financing can play a major role in
helping ULBs with the required funds to implement the projects.
3.8 REAL ESTATE MARKET ANALYSIS AND LAND PRICES AND DYNAMICS
Land prices are highly dependent on the immediate locations and surroundings. The locational advantages are
more often man-made, such as distance to employment centers, access to better urban amenities etc. Analyses
of Bilaspur DLC rate (refer Figure 13) reveal that the peak land prices are in city core/ center, along major transit
nodes, and institutional areas with a gradual reduction in land values as we move towards the periphery of the city.
The major areas observed to have peak land values are Gol Bazaar- Rs. 86300 per square metre, Rajendra
Nagar- Rs. 56200 per square meter, Nehru Chowk- Rs. 35600 per square meter etc. On the other hand,
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Final Report
city peripherals such as Hemu Nagar, Kasimpara are observed to have land value between Rs 9500 to Rs. 11000
per square meter.
Figure 13 : Land Price Contour for Bilaspur City (2017-18)

Source: Knight Frank Research based on prevailing collectorate rates
3.9 PROPERTIES OWNED BY BILASPUR MUNICIPAL CORPORATION
Bilaspur Municipal Corporation has several municipal properties / shops / land blocks that have been rented /
allocated to various users. The general trend suggests that the properties when rented out in the past were close
to the market rentals but have now become substantially lower rentals as compared to the prevailing market
rentals. Given below in table 3-7 & 3-8 are the area-wise details of municipal shops that have been rented out,
along with the average area and current monthly rentals. The same can be analyzed further to augment the
revenue earned by the ULB.
Table 3-7: Shops Rented by Estate Department (BMC)
Locality Total Allocated Remaining

Transport Nagar 81 55 26
Rajkishor Nagar 0 0 0
Yadunandan Nagar 18 16 2
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Locality Total Allocated Remaining

Vyapar Vihar 229 207 22
Source: Bilaspur Municipal Corporation
Table 3-8 : Shops Rented by Bazar Vibhag (BMC)
Area No. of Average Rent per Average Area

Properties Municipal Properties (INR) (Sq. ft)
Near Magarpara School 14 420 120
Near Tilak Nagar Petrol Pump 16 550 120
Tilak Nagar First Floor 15 245 120
Near Tilak Nagar School 37 355 180
Near Motor Stand Canteen 4 200 -
Near Motor Stand Gate 4 210 90
Near Motor Stand 1 323 150
Near Motor Stand (Badi Dukan) 10 500 216
Motor Stand New Complex 44 137870 96
Outside Motor Stand 5 215 50
Motor Stand (Peepal Jhaad) 15 335 120
Main Road Motor Stand 11 950 250
Waiting Area Shops, Rajya Pariwahan 11 450 120
Corridor Shops, Private Bus Stand 12 250 100
Opposite Bhagat Lodge 29 500 120
Behind Bhagat Lodge 13 330 150
Brahaspati Bazar Shops 37 475 120
Motor Stand Bank Loan Shop 40 215 100
Near Rajya Pariwahan Booking Office 5 1500 70
Near Chantidih Mandi 52 481 225
Open Plinth Shops Near Motor Stand 15 75 64
Open Plinth Shops Near Motor Stand 4 231 64
Readymade Line Shanichari Bazar 38 223 75
Peepal Jhand Line Shanichari Bazar 54 223 108
Shanichari Bazar 20 375 120
Behind dispensary 18 185 200
Bhakt Kawar Ram Market 48 115 120
Patwa Line 37 83 78
Galla Line 23 300 108
Darji Line 38 120 70
Shanichari Padav Darji Line 40 45 36
Behind Darji Line 21 175 70
Behind Bijli Office 41 200 180
Kesar Line 28 280 195
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Near Chingi Office 19 312 200
Opposite Yug Nirman Office 20 380 215
Pan Line 14 142 70
Rajiv Plaza Bus Stand 328 750 250
Arpa Complex Block A 14 850 215
Arpa Complex Block B 18 685 180
First Floor Block B Arpa Complex 18 700 340
Opposite Police Station Shastri Market 12 610 333
Opposite Police Station Shastri Market 8 680 180
Opposite mansarovar Shastri Market 20 766 120
Opposite Devkinandan Clinic 14 500 320
New Shops opposite Old Motor Stand 32 530 590
opposite Yatri kar karyalaya 5 623 224
Mahamaya complex 16 190 307
Punjab Bank Complex Ground Floor 36 520 147
Punjab Bank Complex First Floor 3 2450 1883
Shops at old Motor Stand 18 665 208
Opposite Dayalband School 11 365 120
Nagorav shesh School Shops 19 565 165
New Line Shops 51 220 410
New Line Shops 28 310 222
Near Fish Market 23 150 307
Near Putrishala 10 525 1401
Sonar Line 11 170 120
Teen Shed 29 90 106
Near Kasai Market (Temporary) 6 320 -
Near Apna Bazar 12 675 150
Fire Brigade 1 1291 450
Inside Apna Bazar 1 345 5000
Gol Bazar 71 365 168
Outside Gol Bazar 7 383 390
Gol Bazar Gate Shop 5 235 80
Gol Bazar 3 109 70
Gol Bazar Purani Badi Dukan 41 417 300
Gol Bazar BehindPurani Badi Dukan 15 156 320
Gol Bzar Halwai Dukan 8 725 410
Gol Bzar Halwai Dukan ke peeche 6 59 60
Gol Bzar Khali Zamin 6 131 255
Patwa Line Gol Bazar 24 120 110
Darzi Line Gol Bazar 15 115 80
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NearPadav River 5 38 280
MB Market 6 335 135
Sanjay Taran Pushkar 5 308 240
Imlipar 4 520 110
New Bus Stand 2 135 110
Near Padav River 11 233 280
Padav Rapta Marg 8 325 200
Padav Sindhi Colony 15 545 180
Juniline 2 200 240
Gol Bazar 90 338 170
Bhaisa Kotha 13 528 200
Shop Mini Stadium 27 720 400
Mini Bazar 34 460 200
New Line Shanichari Shops 43 430 200
Company Bagicha 5 505 216
Shops inside company garden 5 230 85
Near Ghasiya Para 5 200 90.25
Near Indira Setu 15 650 216
Ashok Prasuti 21 180 42
Raghvendra Rao Sabha Bhawan 9 615 140
Jaharabada Raipur Naka 26 660 600
Town Hall Canteen 1 1049 800
Keru Mandir 10 105 700
Purani Hatri Godpara 152 240 400
Netaji Subhash Complex 55 967 272
Source: Bazar Vibhag, Nagar Palika Bilaspur
In addition to the above, Nagar Nigam has developed and allocated several residential blocks/units as well as
commercial blocks/units. As per the data received, the ULB has developed over 8600 land blocks under various
schemes in Rajkishore Nagar, Vyapar Vihar, Gokul Nagar and Transport Nagar.
It is seen that generally the revenue from Municipal properties is very low as compared to the revenue generated
by other comparable privately-owned properties. The current process of leasing of municipal properties requires a
re-look for effective value capture. The shops owned by BMC can contribute meaningfully towards the revenue
stream of BMC.
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CHAPTER 4:
EXISTING LAND BASED FISCAL TOOLS IN
BILASPUR
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4 EXISTING LAND BASED FISCAL TOOLS IN BILASPUR
This chapter analyses various land based fiscal tools with specific reference to Bilaspur so as to assess the tools
that can be put to use in the city so as to achieve sustainable revenue growth for the ULBs while also being fair
and equitable to the citizens and end users of property.
4.1 FINANCIAL POSITION OF BILASPUR MUNICIPAL CORPORATION
This section presents the financial position of Bilaspur Municipal Corporation, the existing land-based fiscal tools
(LBFTs) being used in Bilaspur and the corresponding legal and regulatory framework for each tool. The objective
is to have an understanding of the rate structure, revenue collection, implementation framework, etc.
The following land based fiscal tools (Taxes, Fees and Charges) are levied by various ULBs in Chhattisgarh:
(i) A tax on lands and buildings called Property Tax
(ii) Water tax
(iii) Sanitary cess
(iv) Lighting tax
(v) Fire tax
(vi) Tax on entry of goods into municipal area
(vii) Conservancy tax
(viii) Drainage tax
(ix) Profession tax
(x) Tax on vehicles and animals
(xi) Toll of vehicles and animals
(xii) Fees on the registration of cattle sold within the city
(xiii) Market dues on goods exposed for sale on government or council land.
(xiv) Betterment tax on properties whose value may have improved as a result of town planning scheme
undertaken by the Council
(xv) A tax on pilgrims
(xvi) A tax on persons occupying, houses, buildings or lands
(xvii) Toll on new bridges constructed by Council
(xviii) A tax on advertisements other than advertisements published in newspapers
(xix) A tax on theatres, theatrical performances and other shows for public amusement
(xx) A terminal tax on goods
(xxi) User charges for services
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(xxii) Compounding fees in respect of the area of unauthorized construction on the basis of the rate of sale of
land determined by the Collector of Stamps
(xxiii) Municipal license fees and Permissions fee
(xxiv) Development fee/sanction of building plans fees
(xxv) Additional stamp duty on transfer of immovable property under section 133A of Municipal Corporation Act,
1956.
(xxvi) Compounding fee for construction made without permission
(xxvii) Registration and renewal fee for colonizers
(xxviii) Development fee from colonizers
The Nagar Nigam Bilaspur earns its revenue from the following services:
• Taxes levied by the municipality

• User charges levied for provision of civic services, and
• Penalties levied under various Acts and Rules
The Nagar Nigam has powers to impose the following taxes and user fees under the provisions of Chhattisgarh
Municipalities Act, 1961 (as amended):
• Taxes on land and buildings situated within the municipal limits;

• Water Tax
• Sanitary Cess
• Lighting Tax
• Fire tax
• Local Body Tax for entry of goods
• Building Fees
• Rental Income from Properties
• Miscellaneous Charges
Apart from the above, the Nagar Nigam gets revenue income from Central/State Government in the form of
Compensation in lieu of Taxes, Grants and Subsidies. It also earns income from Investments. The details of year-
wise municipal income under various income heads from FY 2013-14 to FY 2016-17 is given in Table 4-1:
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Table 4-1 : Revenue Income Status at a Glance – Nagar Nigam Bilaspur (in INR Lakhs)
Particulars 2013-14 2014-15 2015-16 2016-17

Tax Revenues 2447.68 2,646.31 2,528.98 3,784.07
Property Tax 1168.52 1402.24 1210.44 2903.53
Water Tax 548.1 605.80 504.01 574.91
Lighting Tax 48.34 53.37 62.98 88.37
Education Tax 48.08 60.80 67.70 58.76
Advertisement Tax 44.06 14.00 16.63 -
Octroi & Toll 319.87 377.16 460.97 -
Other Taxes 270.71 132.94 206.25 158.51
Assigned Revenues & Compensation - 74.77 - 472.55
Compensation in lieu of Taxes & Duties - 74.77 - 472.55
Rental Income from Municipal Properties 191.33 196.95 210.52 252.4
Rent from Civic Amenities 66.58 166.07 177.89 217.00
Other Rents 124.75 30.88 32.63 35.40
Fees and User Charges 464.65 456.16 539.81 595.9
Licensing Fees 61.27 64.63 63.81 0.03
Penalties and Fines 12.97 56.85 75.89 93.03
Other Fees 388.40 327.62 394.45 493.73
User Charges 2.01 7.06 5.66 9.11
Sale & Hire Charges 101.23 146.04 10.96 -
Sale of Forms & Publications 28.00 27.01 10.96 -
Sale of Others 73.23 119.03 - -
Revenue Grants, Contribution, Subsidies 3006.22 2,080.47 2,173.27 1,564.34
Revenue Grants 3006.22 2080.47 2,173.27 1564.34
Income from Investments 897.30 428.93 -338.18 334.62
Interest Earned - 659.70 139.42 363.69
Interest from Bank Accounts - 659.70 139.42 -
Other Interests - - - 363.69
Other Income 1237.11 1,934.57 2,100.18 5,532.15
Miscellaneous Income 1237.11 1934.57 2,100.18 5532.15
Total Revenue 8345.51 8,623.91 7,364.96 12,899.72
According to the financial documents, the Tax Revenue increased from INR 2447.68 (in Lakhs) in 2013-14 to INR
3784.07 (in Lakhs) in 2016-17. Meanwhile, Grants (Revenue Grant & Compensation of Octroi) continue to from
one of the major part of the revenue. The Rental income from Municipal Properties increased from INR 191.33 (in
Lakhs) in 2013-14 to INR 252.4 (in Lakhs) in 2016-17 (Refer figure 14).
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14000.00
12000.00
10000.00
8000.00
INR Lakhs
6000.00
4000.00
2000.00
0.00
-2000.00
Rental
Assigned Revenue
Income Income
Tax Revenue Fees and Sale & Grants,
from from Interest Other Total
Revenue s& User Hire Contributi
Municipal Investme Earned Income Revenue
s Compens Charges Charges on,
Propertie nts
ation Subsidies
s
2013-14 2447.68 0 191.33 464.65 101.23 3006.22 897.30 0 1237.11 8345.51
2014-15 2,646.31 74.77 196.95 456.16 146.04 2,080.47 428.93 659.70 1,934.57 8,623.91
2015-16 2,528.98 0 210.52 539.81 10.96 2,173.27 -338.18 139.42 2,100.18 7,364.96
2016-17 3,784.07 472.55 252.4 595.9 0 1,564.34 334.62 363.69 5,532.15 12,899.72
Figure 14: Revenue Income - Nagar Nigam Bilaspur
The tax revenue income consists primarily from Property Tax which is on average around 47 percent of the total
tax revenue for 2013-14 and 76 percent for 2016-17. The Property Tax increased almost by 30 percent from FY
2013-14 to FY 2016-17. Though the Water Tax collection increased from INR 548.1(in Lakhs) in FY 2013-14 to
INR 574.91 (in Lakhs) in FY 2016-17, but the percentage share of tax decreased significantly by 7 percent of total
Tax Revenue from FY 2013-14 to FY 2016-17 as well as for Education tax decreased by 0.4 percent respectively
of the total Tax Revenue from FY 2013-14 to FY 2016-17. (refer figure 15)
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4000.00
3500.00
3000.00
2500.00
INR Lakhs
2000.00
1500.00
1000.00
500.00
0.00
Tax Property Education Advertisem Octroi & Other
Water Tax Lighting Tax
Revenues Tax Tax ent Tax Toll Taxes
2013-14 2447.68 1168.52 548.1 48.34 48.08 44.06 319.87 270.71
2014-15 2,646.31 1402.24 605.80 53.37 60.80 14.00 377.16 132.94
2015-16 2,528.98 1210.44 504.01 62.98 67.70 16.63 460.97 206.25
2016-17 3,784.07 2903.53 574.91 88.37 58.76 0.00 0.00 158.51
Figure 15: Tax Revenue Income - Nagar Nigam Bilaspur
The Non-Tax Revenue Income consists of Rental Income, Fees & User Charges, Interest Earned, and Other
Income. The Non-Tax Revenue is generally being on rising trend from 2013-14 that is 24 per cent to 52 per cent
in 2016-17. In 2016-17, income under Miscellaneous Category rose abnormally to 350 per cent from FY 2013-14
to FY 2016-17 of Other Income and 43 per cent of Total Revenue Income.
6000.00
5000.00
4000.00
3000.00
INR Lakhs
2000.00
1000.00
0.00
Rental Income
Fees and User Sale & Hire
from Municipal Interest Earned Other Income
Charges Charges
Properties
2013-14 191.33 464.65 101.23 0 1237.11
2014-15 196.95 456.16 146.04 659.70 1,934.57
2015-16 210.52 539.81 10.96 139.42 2,100.18
2016-17 252.4 595.9 0 363.69 5,532.15
Figure 16 : Non-Tax Revenue Income - Nagar Nigam Bilaspur
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One of the steady sources of income is from letting out of properties by the Municipal Corporation. It is generally
2 per cent of the total revenue income. The Rent from Civic Amenities is the maximum contributing income which
is around 85 per cent of the Rental Income.
300.00
250.00
200.00
150.00
INR Lakhs
100.00
50.00
0.00
Rental Income from
Rent from Civic Amenities Other Rents
Municipal Properties
2013-14 191.33 66.58 124.75
2014-15 196.95 166.07 30.88
2015-16 210.52 177.89 32.63
2016-17 252.4 217.00 35.40
Figure 17 : Rental Income from Municipal Properties - Nagar Nigam Bilaspur
Revenue Expenses Trends

The revenue expenditure of Nagar Nigam Bilaspur has increased from INR 11,124.41 Lakh in 2013-14 to INR
12,282.28 Lakh in 2016-17 registering an increase of 10 percent whereas the revenue receipts during the same
period decreased to 15 percent. The Operation & Maintenance Expenses increased from 8 percent in 2015-16 to
13 percent in 2016-17 of the total expenses over the same period. An analysis is presented below table 4-2 and
Figure 18.
Table 4-2 : Revenue Expenditure for Nagar Nigam Bilaspur (FY 2013-14 & 2016-17)
Particulars 2013-14 2014-15 2015-16 2016-17

Establishment Expenses 3,457.63 3,925.01 4,266.30 4,476.51
Administrative Expenses 1,916.80 2,631.25 2,099.71 1,144.38
Operations & Maintenance 1832.95 1,762.80 1093.20 1,600.99
Interest & finance charges - 0.13 - -
Program Expenses 14.22 20.51 22.00 11.27
Revenue Grants, Contribution and Subsidies 819.33 820.30 767.31 288.75
Provisions and Write Off 7.04 7.24 - -
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Particulars 2013-14 2014-15 2015-16 2016-17

Miscellaneous Expenses 28.17 239.03 65.61 102.17
Depreciation 3048.27 3574.22 4986.94 4658.20
Total Expenditure 11,124.41 12,980.49 13,301.06 12,282.28
Excess of Income over Expenditure -2778.90 -4,356.58 -5936.10 617.44
14,000.00
12,000.00
10,000.00
8,000.00
6,000.00
4,000.00
INR Lakhs
2,000.00
0.00
Revenue
Operation
Establish Administr Interest & Grants, Provisions Miscellan Total
s& Program Depreciati
ment ative finanace Contributi and Write eous Expenditu
Maintena Expenses on
Expenses Expenses charges on and Off Expenses re
nce
Subsidies
2013-14 3,457.63 1,916.80 1832.95 0.00 14.22 819.33 7.04 28.17 3048.27 11,124.41
2014-15 3,925.01 2,631.25 1,762.80 0.13 20.51 820.30 7.24 239.03 3574.22 12,980.49
2015-16 4,266.30 2,099.71 1093.20 0.00 22.00 767.31 0.00 65.61 4986.94 13,301.06
2016-17 4,476.51 1,144.38 1,600.99 0.00 11.27 288.75 0.00 102.17 4658.20 12,282.28
2013-14 2014-15 2015-16 2016-17
Figure 18: Expenditure Status at a Glance – Nagar Nigam Bilaspur (in INR Lakhs)
Due to increase in Operation and Maintenance expenses by 47 percent in 2016-17 over 2015-16, there was
revenue loss in 2015-16 whereas in 2016-17, the ULB registered surplus. There are non-cash expenses mostly
comprising of depreciation on assets of the Nagar Nigam Bilaspur for which there is revenue deficit from 2013-14
to 2015-16.
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4.2 LEGISLATIVE BACKING
4.2.1 The Chhattisgarh Municipal Corporation Act, 1956
Section 132 - Taxes to be imposed under this Act (1) For the purpose of this Act, the Corporation shall,
subject to any general or special order which the state Government may make in this behalf, impose in the
whole or in any part of the Municipal area, the following taxes namely:
(a) a tax payable by the owners of buildings or lands situated within the city with reference to the
gross annual letting value of the buildings or land, called the property tax, subject to the provisions
of section 135, 136 and 138.
Section 133-A - Power to impose additional stamp duty on transfer of immovable property (1) The
duty imposed by the Indian Stamp Act, 1899 (II of 1899) on instruments of sale, gift and usufructuary
mortgage, respectively, of immovable property, shall in the case of instruments affecting immovable
property situated within the limits of any corporation and executed on or after the date on which the
provisions of this Act are made applicable to such limits be increased by one per centum on the value of
the property so situated, or in the case of an usufructuary mortgage on the amount secured by the
instrument, as set forth in the instrument.
Section 135 - Imposition of property Tax - Notwithstanding anything contained in this Act, the tax under
clause (a) of sub-section (1) of section 132 shall be charged, levied and paid, at the rate not less than six
percent and not more than twenty percent of the annual letting value, as may be determined by the
Corporation for each financial year.
Section 138 - Annual letting value of land or building - (1) Notwithstanding anything contained in this
Act or any other law for the time being in force, annual letting value of any building or land, whether revenue
paying or not, shall be determined as per the resolution of the Corporation adopted in this behalf on the
basis of per square meter of the built up area of a building or land, as the case may be, taking into
consideration the area in which the building or land is situate, its location, situation, purpose for which it is
used, its capacity for profitable user, quality of construction of the buildings and other relevant factors and
subject to such rules as may be made by the State Government in this behalf
Section 163-A - Creation of Infrastructure Development Fund -- 1. Notwithstanding anything contained

in this Act or any other Act for the time being in force, the State Government may create an Infrastructure
Development Fund with a view to assist the Municipal Corporation in developing the infrastructure. 2. The
sources of the infrastructure fund and the procedure and manner in which the amount from the fund
shall be provided to Municipal Corporation shall be such as may be prescribed.
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Section 308-B. Relaxation in Compounding the unauthorized construction - (1) Notwithstanding

anything contained in Section 308-A or any other provisions of this Act or any other law for the time being
in force, the Commissioner may, on the application made in this behalf by order, compound the cases
involving deviations from the approved plan or map, or construction made without permission by collecting
compounding fee at such rate as may be determined by the State Government.
Section 366. Licenses and permissions - (1) Whenever it is prescribed by or under this Act that the
permission of the Commissioner is necessary for the doing of any act, such permission shall, unless it is
otherwise expressly provided, by in writing. Except when it is otherwise expressly provided in this Act or in
any rule or bye law made there under, a fee for every such license or written permission may be charged
at such rates as may be fixed by the Corporation and such fee shall be payable by the person to whom the
license is granted.
Section 415. Dispute between Corporation and Local Authorities - If any dispute arises between the
Corporation and any local authorities as regards anything done or to be done under this Act, it shall be
referred to the Government for decision and such decision may include an order as to the costs of any
enquiry ordered by the Government and shall be final.
4.2.2 The Chhattisgarh Municipal Corporation and Municipalities (Registration of Colonizer, Term and
Conditions) Rules, 2013.
Rule 3: Registration of colonizer or builder - (1) Any person who intends to undertake development of colony
under section 292-A of Municipal Corporation Act,1956 shall apply in Form-one appended to the Rules.
The application shall be accompanied by Bank Guarantee as under-
a) Municipal Corporation having population of 3 lakh or more Rs.10 lakh
b) Municipal Corporation having population of less than 3 lakh Rs. 05 lakh
c) Municipal Councils Rs. 03 lakh
d) Nagar Palikas Rs. 01 lakh
Rule 4: Registration and renewal fees. - (1) The Registration and renewal fees shall be as follows-
S.No. Area Amount of
Registration fee Renewal fee
a Municipal Corporation having population of 3 lakh or more Rs.30000/- Rs.30000/-
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S.No. Area Amount of

Registration fee Renewal fee
b Municipal Corporation having population of less than 3 Rs.20000/- Rs.20000/-
lakh
c Municipal Councils Rs.10000/- Rs.10000/-
d Nagar Palikas Rs.5000/- Rs.5000/-
Rule 8: Application for the development of the colony and permission fee. - (1) When a colonizer
registered under Rule 3 wants to establish any colony and take up development work, he shall submit an
application to the competent authority together with the fee prescribed under rule 8(2) as under-
S.No. Area Fee for development of colony

a Municipal Corporation having population of 3 lakh or more Rs.50000/-per hectare
b Municipal Corporation having population of less than 3 Rs.25000//-per hectare
lakh
c Municipal Councils Rs.10000//-per hectare
d Nagar Palikas Rs.50000//-per hectare
Rule 11: Permission for development work. - Permission shall be granted after fulfilling the following
conditions-
(i) Out of plots/flats to be developed 15% of plots/10% of flats shall be reserved for transfer to the
competent authority for EWS.
(ii) Colonizer shall deposit 2% of the estimated cost of internal development cost of the colony as
supervision charge with the Municipality
(iii) Rupees 100//- per square metre for external development of the colony with the Municipality
(iv) The rate in (iii) relates to 2011 and will increase @5% per year thereafter.
Rule 15A - Regularization of unauthorized colonies that came into existence up to 31st December 2014.
(1) Notwithstanding anything contained in these rules, the unauthorized colonies that came into existence
up to 31st December 2014 on other than Government land shall be regularized subject to the conditions
given in Notification dated 5th January 2016.
4.2.3 Notification No. F 7-8/2011/18 Dated 5th January 2016
In exercise of the powers conferred by Section 292-A, 292-B, 292-C, 292-F and 292-I read with Section
433 of the Chhattisgarh Municipal Corporation Act, 1956 (No.23 of 1956) and Section 339-A, 339-
B, 339-C, 339-F and 339-I read with Section 355 and 356 of the Chhattisgarh Municipalities Act,
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1961 (No.37 of 1961), the State Government, hereby, makes the following amendment in the Chhattisgarh
Municipal Corporation and Municipalities (Registration of Colonizer, Terms and Conditions) Rules, 2013,
namely:
AMENDMENT in the said rules - 1. After rule 15, the following shall be added, namely, “15-A. Regularization
of Unauthorized colonies that came into existence up to 31st December 2014. (1) Notwithstanding anything
contained in these rules, the unauthorized colonies that came into existence up to 31st December 2014 on
other than government land shall be regularized subject to the following conditions:
(i) Such colony shall be deemed to be in the category of unauthorized colony which has been
constructed by the colonizer without obtaining the legal permission or no-objection certificate from
the department of Town and Country Planning, Urban land ceiling, Land Diversion, Nazul and
Municipality
(ii) Unauthorized colonies situated on Development Plan main roads, parks, playgrounds, areas of
cultural heritage, river, tank, area of drains, green belt or area of recreation shall not be regularized.
(iii) Only such unauthorized colonies shall be regularized where at least twenty-five percent houses have
been constructed and people are residing therein. Where only the plots are in existence, action for
regularization shall be taken in accordance with rule 15 of this rule.
(iv) Once the Competent Authority takes up the work of regularization of any colony in his hand it shall
be deemed that the diversion of land of that colony has been done and its use is in accordance with
the Master Plan of the City.
(v) The Competent Authority shall cause to be prepared the estimate and layout for the development
work, including the basic amenities of the unauthorized colonies for which the competent authority
shall organize a meeting and discuss with the inhabitants concerned and the colonizer, if available,
and after considering their suggestions, if any, finalize the estimate and layout. The amount of
expenditure to be incurred for preparing the layout shall be fixed not exceeding ten per cent of the
development charges and the same shall be included in the development charges.
(vi) The amount of estimated expenditure on development works shall be recovered as development
charges from the owner/occupants of the house/plot of the colony concerned in proportion of the
area of house/ plot which is in their occupation. In the layout prepared by the competent authority
for the total area of the colony, if open land for public amenities as per law is not available then the
competent authority shall estimate the cost of such requisite open land and recover double amount
of such estimated cost from the Colonizer.
(vii) In case the development fees or the cost of requisite open land, as the case may be, is not deposited
by the occupants/colonizer of the house/ plot, such amount shall be recovered in accordance with
the provisions of the Act as arrears of land revenue.
(viii) The competent authority shall deposit the amount of development fees received from the
occupiers of houses/plots in a separate bank account. Similarly, the amount which is
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recovered as arrears of land revenue shall also be deposited in the same account. The drawal from
such account shall be made only for the expenditure relating to the development works of the
concerned colony with the joint signature of the competent authority and the Collector or his
subordinate officer authorized by the Collector in this behalf. The sanction of the Development Works
shall be given by the concerned authorities of the municipality within their powers as vested in them.
(ix) In such unauthorized colony in which the houses have been constructed, the concerned urban body
shall, after compromise with the house owners, regularize such unauthorized construction of the
house. The building permission fee and the compounding charges shall be recovered from such
house owner according to law.
(x) In the unauthorized colony when any house or plot has been regularized then such house/plot shall
be deemed to have been exempted ipso facto from penal proceeding.
Section 349 - Fees for licenses and permissions

The Council may charge such fee as may be prescribed by bye-laws for--
(i) any license granted under this Act;
(ii) any permission granted under this Act, for making any temporary erection or for putting up any
projection or for the temporary occupation of any public street or any land or building belonging to
the Council; and
(iii) any application or appeal made to or filed before the Council under this Act and for giving copies, of
its orders or other documents.
(iv) The rate of the license and permission fees shall be revised once in every three years.
4.2.4 The Chhattisgarh Nagar Tatha Gram Nivesh Adhiniyam, 1973
An Act to make provision for planning and development and use of land; to make better provision for the
preparation of Development Plans and Zoning Plans with a view to ensure Town Planning Schemes are
made in a proper manner and their execution is made effective; to constitute Town and Country Planning
Authority for proper implementation of Development Plan; to provide for the development and administration
of special areas through Special Area Development Authority; to make provision for the compulsory
acquisition of land required for the purpose of the Development Plans and for purposes connected with the
matters aforesaid.
Section 1. Short title, extent commencement and application - (1) This Act may be called the
Chhattisgarh Nagar Tatha Gram Nivesh Adhiniyam, 1973; (2) It extends to the whole of Chhattisgarh.
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Section 3. Director and other officers - (1) The State Government shall appoint an officer to be the
Director of Town and Country Planning for the State. (2) The Director shall exercise such powers and
perform such duties as are conferred or imposed upon him by or under this Act.
Section 10. Restriction on use of land or development thereof - (1) Notwithstanding anything contained
in any other law for the time being in force, on or after the date of publication of the draft regional plan, no
person, authority, department of Government or any other person shall change the use of land for any
purpose other than agriculture, or carry out any development in respect of any land contrary to the
provisions of the draft plan, without the prior approval of the Director or an officer not below the rank of
Deputy Director authorised by the Director, in this behalf.
Section 13. Planning area - (1) The State Government may, by notification, constitute planning areas for
the purposes of this Act and define the limits thereof. (3) Notwithstanding anything contained in the
Chhattisgarh Municipal Corporation Act, 1956 (No. 23 of 1956), the Chhattisgarh Municipalities Act, 1961
(No. 37 of 1961) or the Chhattisgarh Panchayat Raj Adhiniyam, 1993 (No. 1 of 1994), the Municipal
Corporation, Municipal Council or the Nagar Panchayat or a Panchayat, as the case may be, shall, in
relation to the planning areas, from the date of the notification issued under sub-section (1), cease to
exercise the powers, perform the functions and discharge the duties which the State Government or the
Director is competent to exercise, perform and discharge under this Act.
Section 24. State Government to control development and use of land - (1) The overall control of
development and use of land in the State shall vest in the State Government. (2) Subject to the provisions
of sub-section (1) and the rules made under this Act, the overall control of development and use of land in
the planning area shall vest in the Director with effect from such date as the State Government may, by
notification, appoint in this behalf. (3) The State Government may make rules to regulate the control of
development and use of land in planning area and non-planning area in the State and may, by notification,
apply the said rules to any planning area or non-planning area from such, date as may be specified therein
and where the rules are made applicable to a non-planning area, such notification shall define the limits of
the non-planning area, provided that different rules may be made for different classes of local authorities in
a planning area or non-planning area, as the case may be.
Section 24A. Construction of an additional floor in a residential building - Where under the provisions
of this Act or rules made thereunder or any other law enacted under entry 5 of the State List of the Seventh
Schedule to the Constitution of India for the time being in force, regulating the constructions of residential
building or any rules or regulations or bye-laws made thereunder it is permissible to construct less
than three floors then notwithstanding anything contained in the Act or the law or the rules or the
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regulations or the bye-laws aforesaid it shall he permissible to construct an additional floor in such
residential building subject to sanction of a plan of such construction under the aforesaid Act or law, as the
case may be.
Section 26. Prohibition of development without permission - After the coming into operation of the
development plan, no person shall change the use of any land or carry out any development of land without
the permission in writing of the Director.
Section 29. Application for permission for development by others - (1) Any person, not being the Union
Government, State Government, a local authority or a special authority constituted under this Act, intending
to carry out any development on any land, shall make an application in writing to the Director for permission,
in such form and containing such particulars and accompanied by such documents complying with the
provisions of Acts, rules and bye-laws relating to development, control of the natural hazard prone area as
may be prescribed. (2) Such application shall also be accompanied by such fee as may be prescribed.
Section 38. Establishment of Town and Country Development Authority - (1) The State Government
may, by notification, establish a Town and Country Development Authority by such name and tor such area
as may be specified in the notification. (2) The duty of implementing the proposal in the development plan,
preparing one or more town development schemes and acquisition and development of land for the purpose
of expansion or improvement of the area specified in the notification under sub-section (1) shall, subject to
the provision of this Act vest in the Town and Country Development Authority established for the said area.
Section 59. Development charges - (1) Where as a result of the implementation of town development
scheme, there is, in the opinion of the Town and Country Development Authority, as appreciation in the
market values of lands adjacent to and affected by a scheme the Town and Country Development Authority
may, in lieu of providing for the acquisition of such land, levy development charges on owners of such land.
(2) The development charges shall be an amount equal to not less than one-fourth and not more than one-
third of the difference between the value of the land on the date of publication of the intention to prepare
the town development scheme and the date of completion of the scheme.
Section 60. Mode of levy of development charge - (1) On completion of the town development scheme,
the Town and Country Development Authority, shall, by a notice in such form and published in such manner
as may be prescribed, declare the fact of such completion and of its intention to levy development charges
in the area covered by the scheme, calling upon owners of land liable to pay development charges to submit
objection, if any, within such period which shall not be less than thirty days from the date of
publication of the notice, and to such authority as may be specified in the notice. (2) The authority
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specified in the notice shall after giving the objectors an opportunity to be heard, forward the report to the
Town and Country Development Authority. (3) On receipt of the report under sub-section (2) the Town and
Country Development Authority shall pass such orders thereon as it may consider fit. (4) The Town and
Country Development Authority shall, not later than three months after the publication of a notice declaring
its intention to levy development charges, issue a notice in the prescribed form, assessing the charges due
from every' person affected by the levy' of the charges. (9) The Town and Country Development Authority
may, on an application made to it in that behalf, permit assesse to make payment of development charges
in annual instalments not exceeding five and fix a date by which each instalment shall be payable.
Section 61. Fund of Town and Country Development Authority - The Town and Country Development
Authority shall have its own fund and all receipts of that authority shall be credited thereto and all payments
by that authority shall be made there from.
Section 61A. Annual contribution to Town and Country Development Authority from the State
Government and local authority - (1) Every Town and Country Development Authority shall be entitled to
receive grant in aid from the State Government and the local authority at the rate specified in sub- section
(2). (2) The grant-in-aid shall be calculated @ Rs. 2000 for every 10,000 units of population up to the first
50,000; and @ Rs. 2000 for every 20,000 units of population above 50,000.
Section 64. Constitution of special areas - (1) If any area, town or township, is designated as a special
area in the regional plan, or if the State Government is otherwise satisfied that it is expedient in the public
interest that any area, town or township should be developed as a special area. It may, by notification,
designate the area as a special area, which shall be known by such name as may be specified therein.
Section 65. Special Area Development Authority. - (1) Every special area shall have a Special Area
Development Authority.
Section 69. Powers of the Special Area Development Authority. - The Special Area Development
Authority shall (a) for the purpose of acquisition of land, exercise the powers and follow the procedure which
a Town and Country Development Authority have or follows under this Act; (b) for the purpose of planning,
exercise the powers which the Director has under this Act.
Section 73. Power of State Government to give directions - (1) In the discharge of their duties the
officers appointed under Section 3 and the authorities constituted under this Act shall be bound by such
directions on matters of policy as may be given to them by the State Government. (2) If any dispute
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arises between the State Government and any authority, as to whether a question is or is not a question of
policy, the decision of the State Government shall be final.
Section 85. Powers to make rules. - (1) The State Government may, after previous publication, make
rules for carrying out the purposes of this Act. (2) In particular and without prejudice to the generality of the
foregoing power, such rules may provide for - (viii) (a) the form of application under Section 29 (1), the
particulars which such application shall contain and the documents which shall accompany such
application; (b) the fee which shall be accompanied with the application under Section 29 (2); (3) All rules
made under this Act shall be laid on the table of the Legislative Assembly.
4.2.5 The Chhattisgarh Nagar Tatha Gram Nivesh Niyam, 1975.
Rule 12. Form of application for permission for development of land by others –
(A) Any person not being the Union Government, State Government, or Local Authority, special authority
shall apply under the sub-section (1) of section 20 in Form VII for permission for development of land and
in Form VIII for development of land along with the schedule and specification sheet attached with the
application form. (B) Fees. – Every application submitted under sub-section (2) of section 29 shall be
accompanied by a fee specified below:
(i) For the development of land other than erection of a building Rs. 50 per acre or part thereof.
(ii) For building operation.
S.No. Area Rate of Fee for Rate of fee for

ground floor subsequent storey
i For a ground floor area up to 1200 sq. ft Rs.20/- Rs.15/-per storey
ii For a ground floor area of more than Rs.25/- Rs.20/-per storey
1200 sq. ft. but not exceeding 3000 sq. ft.
iii For a ground floor area of more than Rs.50/- Rs.40/-per storey
3000 sq. ft. but not exceeding 6000 sq. ft.
iv For a ground floor area more than 6000 sq. Rs.75/- Rs.50/-per storey
ft. & above.
Note 1- For purposes of calculation of the fee ground area shall mean the area of the portion which is proposed to
be built upon excluding the internal court yard and portion.
Note 2- For purposes of rates prescribed above the basement where provided will be regarded as the first storey,
the ground floor over the basement as the second storey and so on.
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4.2.6 The Chhattisgarh Bhumi Vikas Rules, 1984
Notification No. 2608-XXXII-i-86, dated 20-G1986. In exercise of the powers conferred by sub-section (3)
of Section 24 of the Chhattisgarh Nagar Tatha Gram Nivesh Adhiniyam, 1973, (No. 23 of 1973), the
State Government hereby appoints the date of publication of this notification in the Chhattisgarh Gazette
as the date on which the Chhattisgarh Bhumi Vikas Rules, 1984 shall apply in the non-planning areas.
Rule 2(29-a). "Premium Floor Area Ratio” means floor area in addition to determined floor area of
prescribed area rate and area of which shall be prescribed by the Government and maximum limits of which
shall not be more than 50% of permissible floor area ratio.
Rule16. Application for permission for development or for Building.
Rule 21. Fees - (1) Validity of Notice subject to payment of Fees-No notice as referred to in rule l6 shall be
deemed valid unless the person giving notice has paid the fees for the time being in force to the Authority
and an attested copy of the receipt of such payment is attached with the notice. (2) In case the authority
after processing the application of building permit, the building permission/development. (3) Scale of Fee.
-The scale of fee shall be as under: -
A For permission for development Fee
(i) For development of area up to I hectare Rs. 2500/-
(ii) For development of area exceeding I hectare but not exceeding 2.5 Rs. 5000/-
hectare
(iii) For development of area 'exceeding 2.5 hectare but not exceeding 5 Rs. 10000/-
hectares
(iv) For development of area exceeding 5 hectares for every hectare or part additional fee at Rs.
thereof 2500/-
B. For permission for building other than high rise buildings

S.No. Type of construction Built up area Fees chargeable in
Sq. meter Sq. meter Rupees
1 A building intended to be exclusively for 0 75 500
residence 76 125 875
126 200 1500
201 300 2250
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301 400 3000
401 600 5000
601 750 6250
751 1000 8750
1000 1250 12500
1250 1500 I7500
1500 2000 25000
2001 2500 37500
2500 Above 37500 and l5 per
square meter for
additional fees
2 A building intended to be used as shop, Fee specified in item no. 1 together with an additional
store house, factory or for carrying or charge of 50% of such amount of fees, except that for a
trade or business or any other built-up area above 2500 square meter the fees chargeable
commercial or industrial purpose. shall be Rs. 15/- per square meters for additional fees.
3 A building intended to be used as Fees as prescribed in item no. 1
administrative block in a factory.
4 A building intended to be used for shop- Fees specified in item no. 1 together with an additional
cum-residence purposes. charge of 50% such amount of fees.
5 A building intended to be used as Up to 800 seating capacity @ Rs. 15,000/-;
cinema theatre. Above 800 seating capacity @ Rs. 25,000/-
6 A building intended to be used for any 50% of fees specified in item No. 4
social charitable culture, educational
purposes, Dharmshala and similar
types of building and for any other
purpose not specifically provided for.
7 Addition or alteration with built up area Rs. 100/- in each case of building mentioned in item 1, 3
or external addition or alteration which and 6 Rs. 500/- in each case of building mentioned in item
does not add to the built-up area such No. 2. 4 and 5.
as Court yard compound N-4 wall,
alteration in elevation or roofing such
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tiles to A.C. Sheet or flat surface,
additional opening or closing not
covered by proviso to sub-rule (l) of
Rule 14.
8 ln case of addition alteration in the Up to 5% Nil. above 5% to 10% - Rs. 125/-. Above I0% fresh
proposed plan. application according to the rule shall be necessary
9 Revaluation of the building permission l0% of the amount of fees charged originally in respect of
the building
S.No. C. For permission for high-rise building

Type of construction Fees chargeable in Rupees
1 A building intended to be exclusively for residence. Rs. 25/- per square meter floor area
space.
2 A building intended to be used as shop, store , house, Fees prescribed in item no. 1 with
factory or for carrying on trade or business or any other additional charges of 100% of amount of
commercial or industrial purpose. fees.
3 A building intended to be used as administrative block in Fees as prescribed in item no. 1
a factory.
4 A building intended to be used for shop cum- residence Fees specified in item no. 1 together with
purposes. additional charges of 50% of such amount
of fees.
5 A building intended to be used for any special, charitable, 50% of fees specified for item no. 1
cultural, educational purposes, including hospital,
school, club, Dharmshala and similar types of building
and for any other purpose not specifically provided for.
S.No. D. Fees for the permission of development of Integrated Township

Name of Planning / Special Area Fees
1 Raipur, Naya Raipur Rs. 200 per sq. rneter
2 Bilaspur, Korba, Bhilai Rs. 150 per sq. meter
3 Other Planning & Special Area Rs. 100 per sq. Meter
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E. In addition to above Re. 1/- per square meter as Environment fee for the development of sub-town shall
have to be paid.
Rule 95. Power of relaxation - The Director of Town and Country Planning, Government of Chhattisgarh
may permit special relaxation to any of the rules, provided the relaxation sought does not violate the health
safety, fire safety. structural safety, public safety of the inhabitants and the building and neighbourhood.
4.2.7 The Chhattisgarh Land Revenue Code, 1959
The Chhattisgarh Government vide notification no. F-6-2/Revenue/2001 dated 23-11-2001 issued
adaptation of laws order, 2000, which is applicable to the entire state of Chhattisgarh with effect from 1-11-
2000. According to this order, M.P. Land Revenue Code,1959 as amended up to 31.10.2000 is adapted
and extended to the State of Chhattisgarh.
Section 59. Variation of land revenue according to purpose for which land is used. (5) where land for use
for any purpose is diverted to any other purpose and land revenue is assessed thereon under the
provisions of this section, the competent authority shall also have power to impose a premium on the
diversion in accordance with rules made under this code.
Section 258. General rule making power. -

1) The state government may make rules generally for the purpose of carrying into effect the provisions
of this code.
2) In particular, and without prejudice to the generality of the foregoing powers such rules may provide
for-
(iii) regulation of assessment of land revenue on diversion of land to other purposes and
imposition of premium under section 59;
(vi) diversion of survey numbers into sub-divisions and apportionment of the assessment of
survey number among the sub-divisions of a survey number under section 70;
(xiv) the manner of dividing plot numbers into sub-divisions and apportioning the assessment of
plot number among, the sub-divisions; and the limits either of area or of land revenue or both
in any local area for recognition of sub-divisions under section 94.
3) All rules made under this section shall be subject to the condition of previous publication.
4) All rules made under this code shall be laid on the table of the legislative Assembly and shall be
subject to such modifications as the legislative Assembly may make.
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4.2.8 Rules regarding Alteration of Assessment and Imposition of premium for the purpose of levy of
premium on Agricultural land
Rule 14 (1) - For the purpose of levy of premium of agricultural land other than the land specified in the
proviso to sub-section (5) of section 59 of the code diverted to non-agricultural purposes, in any town and
village in the state of Chhattisgarh shall be divided into the following classes as shown in column (1) of
schedule-A appended to these Rules and the premium shall be imposed according to the rates specified in
column (2), (3), (4), (5), (6) and (7) of the said Schedule.
Schedule-A
Classes Residential Residential Commercial Public/ SEZ Medical
purpose Unit/ or Industrial Institutional Facility
Colony/ Purpose Purpose
Project
Municipal Rs.15/-per Rs.20/-per Rs.25/-per Rs.20/-per Rs.20/- Rs.15/-
Corporation sqm. sqm sqm sqm per sqm per sqm
and Nagar
Palika area
5 km within Rs.10/-per Rs.15/-per Rs.20/-per Rs.15/-per Rs.15/- Rs.10/-
Municipal sqm sqm. sqm sqm per sqm per sqm
Corporation
and Nagar
Palika area
4.2.9 Chhattisgarh Griha Nirman Mandal Adhiniyam, 1972
The name M.P. was substituted by Chhattisgarh by section 79 of the M.P. reorganisation Act, 2000 vide
notification no. 2458/2001/N.Pra. dated 30th June 2001
Section 51 CHAPTER XI - Assessment and Recovery of Betterment Charges.

Betterment charges - (1) When by making of housing scheme any land in the area comprised in the scheme
will in the opinion of the Board be increase in value, the Board in framing the scheme may declare that
betterment charges shall be payable by the owner of the land or any person having an interest therein in
respect of the increase in value of land from the execution of the scheme. (2) Such increase in value shall
be the amount by which the value of the land on the completion of the execution of the housing scheme,
estimated as if the land were clear of the buildings exceeds the value of the land prior to the execution of
the scheme estimated in like manner and the betterment charges shall be one half of such increase in
value.
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4.2.10 Chhattisgarh Anadhikrit Vikas Ka Niyamitikaran Adhiniyam, 2002.
An Act to regularize the unauthorised development in the Planning Area in the State of Chhattisgarh, by
vesting certain powers specified herein, in an Authority to exercise, perform and discharge the duties
entrusted to them within specified duration of time. It extends to the whole of Chhattisgarh.
Section 2 - The provisions of this Act shall apply to such unauthorized developments which were in
existence on or before the date notified by the State Government.
Section 4(1) - The State Government shall constitute for each district an Authority to be called "District
Regularisation Authority" for the purpose of regularisation of unauthorized development.
Section 6 - The Authority shall have power to (iii) For the purpose of imposing penalty the authority shall
evaluate the unauthorized development on the basis of prevailing market value of land, construction, etc.
The authority shall also evaluate its monthly rent. (iv) The Authority shall determine penalty, on the basis of
such evaluation done and the cost of development of basic infrastructure in the vicinity which may be
required because of the unauthorized development. (v) Upon compliance of the order issued by the
Authority and deposit of the regularisation penalty, such development would cease to be unauthorized and
a certificate to that effect will be issued to the applicant by the. Authority in such Performa as may be
prescribed.
4.2.11 Chhattisgarh Anadhikrit Vikas Ka Niyamitikaran (Sanshodhan) Adhiniyam, 2003.
Section 6-A - Special provision for residential building

For imposition of penalty on residential buildings, the unauthorised development shall be classified on the
basis of its plot-area, as follows:
a. Up to 120 sqm
b. from 120 sqm to 240 sqm
c. from 240 sqm 360 sqm
d. above 360 sqm
For residential buildings the penalty shall be fixed on the basis of the floor area of the unauthorised
development. If the building is constructed without any building permission, then the penalty shall be
imposed on the total floor area. If the building is constructed with additional floor area other than specified
in the building permission, penalty shall be imposed only on such additional area.
For residential buildings, the rate of penalty shall be as follows:
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a. No penalty shall be imposed on the buildings constructed on plot areas up to 120 sqm
b. The rate of penalty for the buildings constructed on plot areas above 120 sqm shall be as follows:
Classification on the basis of plot area Rate per sqm (in rupees)
Up to 120 to 240 sqm 100
Up to 240 to 360 sqm 150
above 360 sqm 250
4.2.12 The Chhattisgarh Anadhikrit Vikas Ka Niyamitikaran Niyam, 2002
Rule 5.-Fixation of Penalty

(1) For the purpose of deciding the penal amount to be imposed on any applicant, except for the
development carried out for residential purposes. the area wise market value of the unauthorized
development. shall be fixed by the Authority and represented as per unit developed area.
(2) The Calculation of market rate shall be on the basis of land value per unit area, the construction cost
"per unit area, and the development cost per unit area”. Thus, the market rate shall be calculated as follows:
Market rate = Land value per unit area + construction cost per unit area + development cost per unit
area.
Calculation of development expenditure will be made on the basis of development made in the surroundings
or development works which will be required to be done, due to regularisation of the unauthorised
development.
(3) Marked value of the land and valuation of the construction shall be done as per Bharatiya Stamp
Adhiniyam, 1899 and the rules made there under "Moolya Margdarshak Sidhanton Ka Banaya Jaana Aur
Unka Punarikshan Niyam, 2000".
(4) The Authority shall publish the market rate so fixed for any area, in widely circulated newspaper and
display the map showing the different areas having different categories of rates prescribed by it.
(5) (i) For the purpose of deciding the penal amount in individual cases, the unauthorized development may
be categorised into residential and non-residential property on the basis of its purpose and use,
(5) (ii) The property, which is developed with residential purposes and is being used for the same, shall be
called residential property
(5) (iii) All other developed properties except those defined in sub-rule (5) (ii), shall he have termed
non-residential properties.
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In each case, group shall be decided on the basis of total developed area. Thus, the total of authorised
area and unauthorised developed area of a single building shall be taken into consideration for deciding as
to which group, the case belongs to.
(6) For the developments carried out for residential purposes, the penalty shall be imposed on the basis of
provisions made in section 6-A of the Act.
7 (1) For calculation of the penal amount to be imposed on unauthorized developed properties for non-
residential purposes, the applicants shall be classified into any of the five categories as given in the table
below.
S.No. Group of Applicant Area of Unauthorized Development
1 Group A1 Up to 20 square metres
2 Group B1 More than 20 square metres and up to 60 square metres
3 Group C1 More than 60 square metres and up to 100 square
metres
4 Group D1 More than 100 square metres and up to 200 square
metres
5 Group E1 More than 200 sqm.
(2) The Penal amount to be imposed for regularisation of unauthorized developed property shall be decided
on the basis of the percentage of market rate fixed for the area in which the property is located.
4.2.13 Chhattisgarh Anadhikrlt Vikas Ka Niyamltikaran (Sanshodhan) Adhiniyam, 2016
An Act further to amend the Chhattisgarh Anadhikrlt Vikas Ka Niyamitikaran Adhiniyam, 2002.
Section 2 - Amendment of section 3 of Chhattisgarh Anadhikrlt Vikas Ka Niyamitikaran Adhiniyam, 2002.

After clause (ii) of sub-section (1) of Section 3 of the Chhattisgarh Anadhikrit Vikas Ka Niyamitikaran
Adhiniyarn, 2002 (No. 21 of 2002), (hereinafter referred to as the Principal Act), the following shall be
inserted, namely, "(ii-a) "Building permission fee" means such fee as is ascertained from time to time under
clause (b) and (c) of sub-rule (3) of rule 21 of the Chhattisgarh Bhumi Vikas Rules, 1984,”
Section 3 - Amendment of section 6 of Chhattisgarh Anadhikrlt Vikas Ka Niyamitikaran Adhiniyam, 2002.

In sub-section (1) of Section 6 the Principal Act - (a) for clause (iii), the following shall be substituted, namely,
"(iii) For the purpose of imposing penalty all commercial and other non-residential buildings not
covered under Section 6-A, the Authority shall follow the following scale, namely :-
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S.No. Plot Area having Unauthorized Construction Penalty Payable

1 Up to 100 sq meters 16 times of building permission fees
2 Above 100 sq. meters but less than 200 sq. meters 21 times of building permission fees
4 Above 300 sq. meters but less than 400 sq. meters 31 times of building permission fees.
6 Above 500 sq. meters but Jess than 600 sq. meters 41 times of building permission fees.
7 Above 600 sq. meters but less than 700 sg meters 46 times of building permission fees
8 Above 700 sq. meters 51 times of building permission fees"
(b) clause (iv) shall be deleted.
Section 4 - Amendment of section 6A of Chhattisgarh Anadhikrlt Vikas Ka Niyamitikaran Adhiniyam, 2002

- For clause (2) of sub-section (iii) of Section 6-A of the Principal Act, the following shall be substituted,
namely,
"(2) The rate of penalty for the buildings constructed on plot areas above 120 sqm shall be as follows:
S.No. Classification on the basis of Plot Area Rate per sqm (in Rupees)
1 from 120 to 240 sqm 125
2 from 240 to 360 sqm 200
3 above 360 sqm 300"
4.3 VCF TOOLS IN PRACTICE IN CHHATTISGARH / BILASPUR
Summary of land based fiscal tools currently being levied in Chhattisgarh / Bilaspur:
4.3.1 Property tax
Property tax is a tax levied by the municipal corporation on the properties (including the land and any building
constructed theron) in city. It is ad-valorem tax payable annually by the property owner based on the rate to be
charged on the built-up area of property. Property tax is guided by the Chhattisgarh Municipal Corporation Act,
1956, subject to the provisions of section 132 to 138.
The annual letting value of land and building is determined under the “Bhawano / Bhumiyon Ki Varshik Bhada
Mulya ka Avdharan Niyam, 1997”. The annual letting value of land or building whether revenue paying or
not, is determined on the basis of per square meter of the built-up area of a building or land, (as the case
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may be) taking into consideration the area in which the building or land is situate; its location, purpose for which it
is used, its capacity for profitable user, quality of construction of the buildings and other relevant factors and subject
to such rules as may be made by the State Government in this behalf. The Property tax, Water tax, Samekit Kar
(general sanitation tax, light tax, and fire tax), and Education cess is calculated on the basis of the annual letting
value. Table 4-3 shows the annual revenue collected by Municipal Corporation of Bilaspur from Property Tax.
Table 4-3 : Property tax revenue (in Rs. lakhs)

Year 2012-13 2013-14 2014-15 2015-16 2016-17 CAGR
Demand 1302 1438 1651 1897 2471 14%
Collection 1057 1168 1185 1548 2168 15%
Collection efficiency 81% 81% 72% 82% 88%
4.3.1.1 Rate of property tax in Bilaspur:

Bilaspur municipal area has been divided into 4 zones for the purpose of derivation of property tax. The zone wise
annual letting value is determined by the ULB on the basis of various factors described above for land and building
both. The Table 4-4 and Table 4-5 below describes the prescribed letting value for land, prescribed letting value
for built-up area in different zones and property tax rates respectively.
Table 4-4 : Zone wise annual letting value (Rs.per sq ft) for building / land
Pacca
Commercial / industrial Residential
Zone On main road / market Off main road / On main road / market Off main road /
No. (R./sqft) market (R./sqft) (R./sqft) market (R./sqft)
Building Land Building Land Building Land Building Land
1 12 9 12 4 12 9 12 4
2 12 10 12 5 12 9 12 5
3 12 12 12 6 12 12 12 6
4 12 9 12 4 12 9 12 4
Semi-Pacca
1 10 9 10 4 10 9 10 4
2 10 10 10 5 10 10 10 5
3 10 12 10 6 10 12 10 6
4 10 9 10 4 10 9 10 4
Kachha
1 4 9 4 5 6 7 8 9
2 4 10 4 5 4 10 4 5
3 4 12 4 6 4 12 4 6
4 4 9 4 4 4 9 4 4
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Table 4-5 : Property tax rate is defined as under

S.No. Annual letting value (Zone 1 – 15) Property tax rate on annual letting value of
residential / industrial / commercial building
and land
1 Annual letting value upto INR 6000/- Nil
2 Annual letting value INR 6001/- to 50,000/- 9%
3 Annual letting value INR 50,001/- to 100,000/- 10%
8 Annual letting value more than INR 500,001/- 20%
4.3.1.2 Vacant land tax:

The above property tax is applicable on the adjoining vacant lands (excluding the marginal open space) as well.
However, currently it is only being levied in Bilaspur.
4.3.1.3 Water tax:

As per the Chhattisgarh Municipal Corporation Act 1956, amended section no 132 (4), the following is the
applicable rate of water tax:
a) INR 50/- per month on properties exempted from property tax
b) For properties not exempted from property tax, INR 50/- + 5% of applicable property tax.
4.3.1.4 Samekit Kar:

As per the Chhattisgarh Municipal Corporation act 1956, amended section no 132 (5), the following is the
applicable rate of Samekit tax (general sanitation tax, light tax, and fire tax):
a) INR 300/- annually on properties exempted from property tax
b) For properties not exempted from property tax, INR 600/- + 10% of applicable property tax
4.3.1.5 Education Cess:

0.5% of the applicable property tax (not applicable on building exempted from property tax)
4.3.1.6 Efficacy of the tool

The efficacy of the existing tools is evaluated based on the following parameters:
• Efficiency: The tool should have little to no scope for avoidance and should be able to capture any increase
in the land value due to infrastructure provision.
• Equity: The charge rates towards tax or user fee should be should be equitable to the land values.
• Adequacy: In terms of revenue generating capacity, stability, and buoyancy.
• Manageability: In terms of implement-ability and administrative costs.
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• Legal feasibility: In terms of backing with state/municipal legislations or government orders.
The appropriateness of existing LBFTs tool of property tax for BMC in terms of their efficiency, equity, adequacy,
manageability, and legal feasibility is presented below:
VCF Tool Efficiency Equity Adequacy Manageability

Property tax Not buoyant as Not equitable. About 9% of the Yearly charge
Vacant land tax reference rates are Though the city has revenues of the requires
Water tax revised after long been divided into 4 Municipal resources.
Samekit Kar interval of times. zones to create a corporation come
Education Cess distinction between from property tax
deferring values including vacant land
across the city, the tax, Samekit kar and
prescribed rates have Jal Kar.
little or no variation.
Legal provision: The legal provisions for all of these exists.
Remarks
• The value capture tools distinguish between the rates applicable on the properties based on different
zones, type of structure, the commercial potential, the class of road on which it is located and the use to
which the property put to.
• Though the structure for calculation of charges is aligned with the principle of value capture finance, its
implementation does not effectively facilitate value capture finance.
• The prescribed annual letting values for different zones are observed to be constant and do not reflect
the higher or lower value of underlying asset across the zones.
• The prescribed rates are not linked with any index and are not revised automatically. The frequency of
revision has been observed to be inadequate.
4.3.2 Building Permission Fee (Bhawan Anugya Shulk)
Building permission charges are levied by the competent authority (Municipal Corporation / Development Authority)
for providing basic public amenities and for the execution of development works and projects. The building
permission (Bhawan Anugya) charges are guided by the provision of the Chhattisgarh Bhumi Vikas Rules, 1984
(As per C.G. Gazette Notification dated 07th May 2016). These provisions are same for whole state of
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Chhattisgarh. It is provisioned to be increased by 10% every year. Table 4-6 shows the annual revenue collected
by Municipal Corporation of Bilaspur from Building Permission Fee.
Table 4-6 : Revenue from building permission charges (In Rs. lakhs)
Parameter 2013-14 2014-15 2015-16 2016-17
Building Construction Permission Charges 21.65 18.62 14.76 25.47
4.3.2.1 Rate for calculation of charges:
a) For permission of development
S.No. Particular Amount (INR)

i For development of area upto 1 Ha 3,750
Ii For development of area exceeding 1 Ha but not exceeding 2.5 Ha 7,500
iii For development of area exceeding 2.5 Ha but not exceeding 5 Ha 15,000
iv For development of area exceeding 5 Ha for every Ha or part thereof, 15,000 + 3,750
additional fee @
b) For permission of building other than multi-storied buildings
S.No. Type of construction Fees chargeable

1 Building intended to be used for residential Built up area (sqm)
Amount (INR)
use 0 75825
76 125
1447
126 200
2475
201 300
3713
301 400
4950
401 600
8250
601 750
10313
751 1000 14438
1001 1250 20625
1251 1500 28875
1501 2000 41250
2001 2500 61875
61875 and INR 20 for
Above 2500 every additional sqm
store house, factory or for carrying or trade charge of 50% of such amount of fees
or business or any other commercial or
industrial purpose.
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S.No. Type of construction Fees chargeable

5 A building intended to be used as cinema Seating capacity 800 – INR 22,500/-
theatre. Seating capacity more than 800 – INR 37,500/-
6 A building intended to be used for any social 50% of fees specified in item No. 4
charitable culture, educational purposes,
Dharmshala and similar types of building
and for any other purpose not specifically
provided for.
7 Addition or alteration with built up area or Rs. 150/- in each case of building mentioned in item 1, 3
external addition or alteration which does and 6, Rs. 750/- in each case of building mentioned in
not add to the built up area such as Court item No. 2. 4 and 5.
yard compound N-4 wall, alteration in
elevation or roofing such tiles to A.C. Sheet
or flat surface, additional opening or closing
not covered by proviso to sub-rule (l) of Rule
14.
8 ln case of addition alteration in the proposed Up to 5% Nil. above 5% to 10% - Rs. 200/-. Above I0%
plan. fresh application according to the rule shall be necessary
9 Revaluation of the building permission 15% of the amount of fees charged originally in respect
of the building concerned
a) For permission of multi-storied buildings
S.No. Type of construction Fees chargeable in Rupees

1 A building intended to be exclusively for residence. Rs. 35/- per square meter floor area space.
4.3.2.2 Sadak Badha Shulk (Malba charges / road blockage charges)

In addition to building permission charges, an additional road blockage charges are applicable at following rate:
• Built up area upto 1000 sqft. ; INR 1000/-
• Built up area 1001 - 2000 sq.ft – Rs. 2000/-

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• Built up area above 10000 sq.ft – Rs. 20000/-
4.3.2.3 Upkar Rashi (1%) / Karmakar Shulk / Labour Welfare Charges

As per UADD letter no. 6702 / 7733 / 2014 / 18 dated 21.04.2016, If total building cost is more than Rs. 10.0 lakhs
then total BUA in sq.ft x 1000 = Amount x 1%

The appropriateness of existing LBFTs of building permission fee for BMC in terms of their efficiency, equity,
adequacy, manageability, and legal feasibility is presented below:

Building It is not linked to the Not equitable. The About 3.16% of the The charges are
permission fee land value hence not charges are linked revenues of the levied at the point
buoyant. with the area of the Municipal of building plan
property and vary Corporation come approval for which
between INR 11 to from building there is an existing
INR 30 per sqm permission fee setup. However, in
However, there is no absence on any
provision for these online system the
charges to be value administrative
based. costs are high.
Legal provision: These charges are guided by the provision of the Chhattisgarh Bhumi Vikas Rules, 1984 (As per
C.G. Gazette Notification dated 07th May 2016). These provisions are same for whole state of Chhattisgarh.
Remarks
• The tool distinguishes between the charge applicable on the properties based on the size and use, but
does not distinguish between the intrinsic value of the underlying asset.
• As per the latest gazette, buoyancy has been built in by introducing an annual increment of 10%.
4.3.3 Development Charges (Vikas Shulk)

Development charges are levied by the competent authority (Municipal Corporation / Development Authority) for
providing basic amenities and for the execution of development work and projects. These charges are levied for
the recovery of the total cost of amenities already provided or proposed to be provided in an area. The
charges so levied should not exceed the amount of the total cost of amenities. The development charge is
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Final Report
levied under the provisions contained in the Chhattisgarh Nagar Tatha Gram Nivesh Adhiniyam, 1973. However
the rate of development charges is defined by the ULB and revised from time to time. The charges are levied along
with the building permission charges.

Bilaspur Municipal Corporation levies two types of development charges i.e. Betterment levy (Sudhar Shulk),
applicable at the time of building permission and Development charges (Bahya Vikas Shulk), applicable only on
undeveloped / unauthorised colonies.
S.No. Type of land Residential Commercial
(Rs./sqft on BUA) (Rs./sqft on BUA)
1 For ground floor if land area less than 1500 sqft 53.80 75.32
2 For ground floor if land area more than 1500 sqft 75.32 107.60
3 For each extra floor 21.52 21.52
An additional development charge (Bahya Vikas Shulk) is applied to undeveloped area at a rate of INR15/- per
square feet to 35/- per square feet on plot area. The rates for applying extra charges are different for different
areas; it’s according to their level of development.

The appropriateness of existing LBFTs of development charges for BMC in terms of their efficiency, equity,

Development It is not buoyant as Not equitable. The About 3.16% of the The charges are
charges there is no provision charges are linked with revenues of the levied at the point
of an automatic the area of the property Corporation is from of building plan
annual increase nor building permission approval for which
it is linked with any fee, which includes there is an existing
index. The revision the development setup
in not frequent. charges as well
Legal provision: These are charges as per the rules formulated by Corporation from time to time.
Remarks
• The tool only distinguishes between the charge applicable on the residential, commercial and industrial
properties, but it does not distinguish between the charges based on the intrinsic value of the underlying
asset.
• The tool does not have any inbuilt buoyancy

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• The tool in its current form is not equitable and fails to capture any increase in value of the underlying
asset.
4.3.4 Regularisation Charges (Samjhota / Rajinama Shulk)
The regularisation charge or Samjhota / Rajinama Shulk is an amount levied by a governing authority to regularize
the development of newly developed or existing unauthorized colonies / building. The regularisation charges are
levied under the provisions contained in the Chhattisgarh Anadhikrit Vikas Ka Niyamitikaran Adhiniyam, 2002
(Sanshodhan Adhiniyam, 2003 and 2016). This is an act to regularize the unauthorised development in the
Planning Area in the State of Chhattisgarh, by vesting certain powers specified herein, in an Authority to exercise,
perform and discharge the duties entrusted to them within specified duration of time. It extends to the whole of
Chhattisgarh. The current applicable rates are as per UADD letter no. AF 8-6 / 2015 / 18 dated October 2015.

As per the Chhattisgarh Anadhikrlt Vikas Ka Niyamltikaran (Sanshodhan) Adhiniyam, 2016, an Act further to
amend the Chhattisgarh Anadhikrlt Vikas Ka Niyamitikaran Adhiniyam, 2002; for the purpose of imposing penalty
on all commercial and other non-residential buildings not covered under Section 6-A, the Authority shall follow the
following scale, namely:
S.No. Plot Area having Unauthorized Construction Penalty Payable

1 Up to 100 sq meters 15 times of building permission fees
2 Above 100 sq meters but less than 200 sq meters 20 times of building permission fees
4 Above 300 sq meters but less than 400 sq meters 30 times of building permission fees.
6 Above 500 sq meters but Jess than 600 sq meters 40 times of building permission fees.
7 Above 600 sq meters but less than 700 sg meters 45 times of building permission fees
8 Above 700 sq meters 50 times of building permission fees"
For residential buildings the penalty shall be fixed on the basis of the floor area of the unauthorised development.
If the building is constructed without any building permission, then the penalty shall be imposed on the total floor
area. If the building is constructed with additional floor area other than specified in the building permission, penalty
shall be imposed only on such additional area.
For residential buildings, the rate of penalty shall be as follows:
• No penalty shall be imposed on the buildings constructed on plot areas up to 120 sqm
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Final Report
• The rate of penalty for the buildings constructed on plot areas above 120 sqm shall be as follows:
Classification on the basis of plot area Rate per sqm (in rupees)
Up to 120 to 240 sqm 100
Up to 240 to 360 sqm 150
above 360 sqm 250

The appropriateness of existing LBFTs of regularisation charges for BMC in terms of their efficiency, equity,

Regularisation It is not buoyant as Not equitable in case of plot The current The charges are
charges there is no regularization. The charges structure of levied post
provision of an are linked with the area of regularization building
automatic annual the plot and do not charge levy is post- construction. The
increase nor it is distinguish either between facto and is linked building
linked with any the value of the plot or the with regularization permission
index benefits availed by the plot drive across the department is well
owner. However, in case of state. placed to handle
building regularization, the these.
regularization charges are
fairly equitable as it is linked
to the value of the under
lying asset
Legal provision: Chhattisgarh Anadhikrit Vikas Ka Niyamitikaran Adhiniyam, 2002 (Sanshodhan Adhiniyam, 2003
And 2016)
Remarks
• Regularisation of unauthorized development in the current form is a post facto tool used by the municipal
corporation to regularize the unauthorized construction and unauthorized area development.
• The regularisation of buildings is value linked, however the regularisation of area development is area
linked with a high multiple being used for larger plots.
• The tool is dependent upon regularisation drive conducted from time to time
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Final Report
• The tool in the current form fails to capture value from an intrinsic demand of property owners to avail
higher benefits through relaxation of rigid development control regulations.
• A proactive development Regularisation tool which makes available certain relaxations in development
control regulations including FSI, ground coverage, set back and height restrictions, linked with the value
of the underlying asset is better tool for value capture.
4.3.5 Property Development and Leasing
Urban Local Bodies have significant lands at prime locations within a city. Such lands are often unutilized / under-
utilized leading to significant inefficiencies in land value capture. Though one of the options to unlock land value
often exercised by development authorities is land sale, the tool results in only a one-time value gain. A better tool
often under-utilized is that of property development on vacant land parcels, and the properties thus developed
being put out for market linked efficient short-term leases.
The tool is also capable of addressing essential retail and commercial need gaps, like local shopping centers,
hawkers market, etc. Table 4-7 shows the annual revenue collected by Municipal Corporation of Bilaspur from
rental income of Municipal Properties.
Table 4-7 : Revenue from Renting of Municipal Properties (In Rs. lakhs)
Parameter 2013-14 2014-15 2015-16 2016-17
Rental income from Municipal Properties (in lakhs) 191.33 196.95 210.52 252.4

The appropriateness of existing LBFTs of property development and leasing for BMC in terms of their efficiency,
equity, adequacy, manageability, and legal feasibility is presented below:

Property The property lease Property rents, when Approx. 2.3% of the The administration
development and revenues need to be charged market revenues of the can continue to
leasing managed by a linked, as a Municipal use the existing
specialised asset percentage of the corporation come administrative set
management team. property value, are from the rental up being utilised to
Existing leases are equitable. The income from manage the
managed by property owners with municipal properties. existing property
corporation itself. higher property value leases without any
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With suitable are charged more The leases lack incremental cost
capacity building rent as compared to buoyancy and expenditure.
exercises, the those with lesser market correction
existing setup can property value. mechanism leading
be enhanced to to sub-optimal rent
increase the collection and
efficiency of the tool. missed opportunity
to capture property
value appreciation
benefits.
Legal provision: The legal provisions for exists.
Remarks
• Though the sale of land is not considered to be a VCF tool, remunerative use of land is often utilized by
ULBs as an effective land value capture tool.
• The sale of land results in one-time gain with the ULBs loosing rights to capture any future increase in
land value.
• Prime properties with high demand and growth potential should be developed and leased on short term
leases. Any market linked increase in rentals would facilitate effective value capture throughout the life of
property.
• Suitable rent revision and renegotiation provision should be built into the lease agreement to ensure the
buoyancy in value capture.
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Final Report
CHAPTER 5:
IDENTIFICATION OF APPLICABLE VCF
TOOLS FOR BILASPUR
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Final Report
5 IDENTIFICATION OF APPLICABLE VCF TOOLS FOR BILASPUR
This section identifies the potential reforms that can be made in the existing LBFTs and suggests new LBFTs that
can be introduced to improve the revenue base of the ULB.
5.1 Property Tax
The property tax in Bilaspur is charged as under:
• The property tax is charged as a percentage of the annual letting value of the property.
• The annual letting value of land or building whether revenue paying or not, is determined on the basis of per
square meter of the built-up area of a building or land, (as the case may be) taking into consideration the
micro-market in which the building or land is situate; its location, purpose for which it is used, its capacity for
profitable user, quality of construction of the buildings and other relevant factors and subject to such rules as
may be made by the State Government in this behalf.
• The annual letting value was last revised in 2017, after almost 5 years of its previous revision in 2012.
Key observations
• The mechanism of property tax is linked to annual letting value and hence factors in land value capture.
• The system lacks buoyancy.
• The letting values defined are constant across the 4 zones and hence fail to distinguish between high
value and low value properties.
• The collection efficiencies are fluctuating between 72% -88%
5.1.1 Revenue Potential from Property Tax/ Fee
The revenue (collection) from property tax for the year 2016-17 is Rs. 2903.53 lakhs, which is approx. 23 % of
total revenue of BMC.
An analysis of annual letting value vis-à-vis computation of property tax for various sizes of commercial and
residential properties is presented in Table 5-1 and Table 5-2 respectively.
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Final Report
Table 5-1 : Annual Letting Value vis-à-vis Computation of Property Tax for various sizes of Commercial Properties
Pucca Annual Letting Rate Annual Letting Value Applicable Property Property Tax For
Commercial (Rs. Per sqft) for (in Rs.) for Tax Rate for Commercial
(area in sq ft) Commercial Commercial Commercial Property Property (in Rs.)
250 12 3000 0% 0
500 12 6000 9% 540
1000 12 12000 9% 1080
2000 12 24000 9% 2160
5000 12 60000 10% 6000
10000 12 120000 12% 14400
20000 12 240000 14% 33600
50000 12 600000 20% 120000
Table 5-2 : Annual Letting Value vis-à-vis Computation of Property Tax for various sizes of Residential Properties
Annual Letting Annual Letting Applicable Property Property Tax For
Pucca Residential
Rate (Rs. Per sqft) Value (in Rs.) for Tax Rate for Residential
(area in sqft)
for Residential Residential Residential Property Property (in Rs.)
500 29 14500 9% 1305.0
750 29 21750 9% 1957.5
1000 29 29000 9% 2610.0
1250 29 36250 9% 3262.5
1500 29 43500 9% 3915.0
2000 29 58000 10% 5800.0
2500 29 72500 10% 7250.0
3500 29 101500 12% 12180.0
The amount of property tax paid by a property owner is fixed for a size of the property irrespective of its land value.
An analysis of Property Tax amount as percentage of Land Values for Commercial and Residential properties is
presented in Table 5-3 and Table 5-4 respectively.
Table 5-3 : Property Tax amount as percentage of Land Values for Commercial properties
Property
Property
Land Pucca Value of Tax on
Tax For
Value Commercial Commercial Commercial
Locality Commercial
(in (area in sq Land (in Building as
Property (in
Rs/sqm) ft) Rs.) %age of
Rs.)
Land Value
1 Harijan Mohalla 13000 250 270 301932 0.09%
2 Kasturba Nagar 14000 500 540 650316 0.08%
3 Ganga Nagar 15300 1000 1080 1421405 0.08%
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Property
Property
Land Pucca Value of Tax on
Tax For
Value Commercial Commercial Commercial
Locality Commercial
(in (area in sq Land (in Building as
Property (in
Rs/sqm) ft) Rs.) %age of
Rs.)
Land Value
Chandni Chowk - Gayatri
4 16800 2000 2160 3121516 0.07%
Mandir Road
5 Both sides under Overbridge 19500 5000 6000 9057971 0.07%
Ganesh Chowk - Kargil
6 21000 10000 14400 19509476 0.07%
Chowk
Narmada Nagar Chowk –
7 32500 20000 33600 60386473 0.06%
Maharana Pratap Chowk
Narmada Nagar Chowk -
8 45000 50000 120000 209030100 0.06%
Shefar School
Table 5-4 : Property Tax amount as percentage of Land Values for Residential properties
Property Tax
Property Tax
Pucca Value of on
for
Land Value Residential Commer Commercial
Locality Commercial
(in Rs/sqm) (area in sq cial Land Building as
Property (in
ft) (in Rs.) %age of Land
Rs.)
Value
1 Harijan Mohalla 13000 500 1305 603865 0.22%
2 Kasturba Nagar 14000 750 1957.5 975474 0.20%
3 Ganga Nagar 15300 1000 2610 1421405 0.18%
4 16800 1250 3262.5 1950948 0.17%
Mandir Road
Both sides under
5 19500 1500 3915 2717391 0.14%
Overbridge
6 21000 2000 5800 3901895 0.15%
Chowk
7 32500 2500 7250 7548309 0.10%
Narmada Nagar Chowk - 1463210
8 45000 3500 12180 0.08%
Shefar School 7
From Table 5-3 and Table 5-4 above it is seen that when the existing property tax on annual letting value for
commercial properties is translated to land value, the properties with lowest land value of Rs. 13,000 per sqm is
paying property tax @ 0.09% of the land value whereas the properties with highest land value of Rs. 45,000 per
sqm is paying property tax @ 0.06% of the land value. Similarly, when the existing property tax on annual letting
value for residential properties is translated to land value, it is seen that the properties with lowest land value of
Rs. 13,000 per sqm is paying property tax @ 0.22% of the land value whereas the properties with highest land
value of Rs. 45,000 per sqm is paying property tax @ 0.08% of the land value.
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Final Report
The current system of calculation of letting value is therefore neither buoyant nor equitable as letting value is
uniform across all the 4 zones. A revision in the letting value by referencing it with the property values (circle rates)
will make it buoyant and equitable i.e. the property owners with higher property value will pay more tax and property
owners with less property value will pay less tax. This land value-based property tax may be fixed at a rate which
the owners of least value property are paying. This will help BMC in increasing its revenue base from property tax
significantly.
5.1.2 Cost-Benefit Analysis
The Cost Benefit Analysis is presented in Table 5-5.
Table 5-5: Cost – Benefit Analysis for Property Tax/ Fee

Instrument Name Property Tax/ Fee
Existing Status The property tax at present is charged on annual letting value. This rate for calculating
the annual letting value however is same for all the zones in Bilaspur.
Potential Value By linking annual letting value to value of land, the annual revenue from property tax
can increase significantly.
Efficiency Property tax when linked to market rentals will ensure buoyancy in the value capture.
Equity Property tax based on prevailing market value will ensure equity.
Adequacy As per the estimates there are about 60000 properties in Bilaspur. If the smaller plots,
say, smaller than 200 square meters estimated to be 12000 (estimated @ 20%) are
excluded, from the levy of Land and Building Tax and estimate average size of the
balance taxable plots numbering 48000 to be 200 square meters each and the average
market price of land to be Rs. 20000/- per square meter (the minimum being Rs.13000/-
per square meter and going up to Rs.45000/- per square meter) an average plot of 200
square meters would be valued at Rs. 4000000/- and the annual Land and Building Tax
for each property @ 0.22% of the market value would come to Rs 8800/-. Thus, revenue
of Rs. 42.24 crores from the levy of uniform Land and Building Tax @ 0.22% on 48000
properties can be envisaged.
If the Land and Building Tax in Chhattisgarh is levied on the lines of Rajasthan @ 1%
of the market value of lands per year the potential revenue from 48000 properties (as
explained in above para) would be Rs. 192 crore per year.
Manageability Online system for assessment and collection may be introduced to reduce
administrative costs.
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Final Report
Instrument Name Property Tax/ Fee

Legal Feasibility Chhattisgarh Municipal Corporation Act, 1956
Timelines GIS Mapping of all properties – A Short Term Measure (0-1 year). This is already in
progress.
Move from area-based method to value based method will need amendment in Act – A
Short Term Measure (0-1 year).
Introduction of on-line system for demand and collection of property tax may be targeted
in Medium Term (1-3 years).
Remarks All the properties to be mapped and linked to GIS.
Any new building to be added to the GIS data base before giving the completion
certificate.
Online system of demand and collection to be introduced.
Concept of common bill for all utilities like water supply, electricity, property tax etc. may
be introduced. Non payment or partial payment of utility bill may attract disconnection
of electricity.
An independent third party may be engaged for demand and collection of utility bill.
5.2 REVENUE POTENTIAL FROM IMMOVABLE PROPERTIES UNDER BMC
List of immovable properties (shops) available with BMC has been presented earlier in Section 3.9. Rental income
from municipal properties is through leasing of shops/properties owned by BMC. During FYs 2015-16 and 2016-
17, BMC has collected Rs. 210.52 lakh and Rs. 252.40 lakh respectively. It has increased about 32 percent from
FY 2013-14 to FY 2016-17. The details of monthly lease rent earned from some of the sample shops viz-à-viz the
market rent is presented in Table 5-6.
Table 5-6: Monthly Lease Rent viz-a-viz Prevailing Market Rent of Shops owned by BMC
S.No. Location of Shop Number of Average area Average Lease Average Market
Shops per shop (in Rent Rent
sqft) (Rs/ Month) (Rs/ sqft/
Month)
1 Near Magarpara School 14 120 420 40-60
2 Near Tilak Nagar Petrol 16 120 550 60-65
Pump
3 Tilak Nagar First Floor 15 120 245 40-50
4 Near Tilak Nagar School 37 180 355 60-70
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S.No. Location of Shop Number of Average area Average Lease Average Market
Shops per shop (in Rent Rent
sqft) (Rs/ Month) (Rs/ sqft/
Month)
5 Motor Stand New 41 90 290 80-100
Complex
6 Motor Stand (Peepal 13 120 284 80-100
Jhaad)
7 Opposite Bhagat Lodge 19 120 596 80-100
8 Behind Bhagat Lodge 14 133 290 25-35
9 Brahaspati Bazar Shops 37 123 432 25-40
10 Motor Stand Bank Loan 40 89 196 25
Shop
11 Near Chantidih Mandi 24 262 546 30-50
12 Shanichari Bazar 20 130 358 30-50
13 Bhakt Kawar Ram Market 48 120 119 50-70
14 Shanichari Padav Darji 40 36 45 70-80
Line
15 Rajiv Plaza Bus Stand 89 261 808 100-120
16 Arpa Complex Block A 14 219 850 80-100
17 Arpa Complex Block B 18 180 648 80-100
Total 499
It is seen that generally the revenue from municipal properties is very low as compared to the revenue generated
by other comparable privately-owned properties. It is understood that the shops are leased by BMC through
auction. The lease period generally is 30 or 15 years.
It is suggested that for auction the minimum reserve price is kept at 70% of the lowest prevailing market rentals in
that area and the lease agreement should have annual escalation clause of 10% to 15%. On the expiry of the
lease period the reserve price should again be looked at for necessary corrections in comparison to the prevailing
market prices. In the re-auction, the out-going lessee may be provided with the first right of refusal on the lease
amount offered during the re-auction. This process will ensure bouyancy in the lease rents.
A broad analysis of the potential revenue to BMC from above mentioned approach is presented in Table 5-7.
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Final Report
Table 5-7: Potential Revenue from Shops under BMC
S.No.
Average Lease Rent
Prevailing Average
Number of Shops
Prevailing Market
Rent (in Rs Lakh)
Location of Shop
Revenue from all

Market Rent (Rs/
Potential Annual
Average Area of
Existing Annual
Revenue (in Rs.
shop @ 70% of
sqft/ Month)
(Rs/ Month)
Shop (sqft)
Lakh)
1 Near Magarpara 14 120 420 0.71 40 5.64
School
2 Near Tilak 16 120 550 1.06 60 9.68
Nagar Petrol
Pump
3 Tilak Nagar First 15 120 245 0.44 40 6.05
Floor
4 Near Tilak 37 180 355 1.58 60 33.57
Nagar School
5 Motor Stand 41 90 290 1.43 80 24.80
New Complex
6 Motor Stand 13 120 284 0.44 80 10.48
(Peepal Jhaad)
7 Opposite 19 120 596 1.36 80 15.32
Bhagat Lodge
8 Behind Bhagat 14 133 290 0.49 25 3.91
Lodge
9 Brahaspati 37 123 432 1.92 25 9.56
Bazar Shops
10 Motor Stand 40 89 196 0.94 25 7.48
Bank Loan
Shop
11 Near Chantidih 24 262 546 1.57 30 15.85
Mandi
12 Shanichari 20 130 358 0.86 30 6.55
Bazar
13 Bhakt Kawar 48 120 119 0.69 50 24.19
Ram Market
14 Shanichari 40 36 45 0.22 70 8.47
Padav Darji Line
15 Rajiv Plaza Bus 89 261 808 8.63 100 195.12
Stand
16 Arpa Complex 14 219 850 1.43 80 20.60
Block A
17 Arpa Complex 18 180 648 1.40 80 21.77
Block B
Total 499 25.14 419.04
Note: The market rents are based on market assessment carried by Knight Frank.
From the above table 5-7, it is seen that if the lease rent for the municipal properties is made comparable
to the prevailing market rentals there is a potential of increasing the annual revenue from the Rentals from
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Final Report
above stated 499 properties to almost Rs. 419 lakh per annum against the existing revenue of Rs. 25 lakh. This
approach if scaled up to all the municipal properties which are currently contributing to annual revenue of Rs.
252.40 lakh, there is a potential to increase the annual revenue to almost Rs. 4200 lakh.
In line with the Terms of Reference, the Cost Benefit Analysis in terms of existing status, potential value, efficiency,
equity, adequacy, manageability, legal feasibility, timelines (short, medium, long) and general remarks is presented
in Table 5-8.
Table 5-8 : Cost – Benefit Analysis for Leasing of Immovable Properties of BMC
Instrument Name Leasing of Immovable Properties of BMC

Existing Status Shops are given on lease by BMC. The lease rents however are much less as
compared to the prevailing market rents.
Potential Value The annual lease rent potential could be around Rs. 4200 lakh against existing revenue
stream of approximately Rs. 252 lakh.
Efficiency Lease rents when linked to market rentals will ensure buoyancy in the value capture.
Equity Lease rents based on prevailing market value will ensure equity for any lessee.
Adequacy The revenue potential of Rs. 4200 lakh from lease rent will increase the share of
revenue from rentals from the current level of approximately 2.3% substantially in
coming FYs.
Manageability Lease rents are collected on monthly basis according to the conditions laid in the lease
agreement. Require manpower for collection thereby incurring administrative costs.
Online system for collection of lease rent may be introduced to reduce administrative
costs.
Legal Feasibility Chhattisgarh Municipal Corporation Act, 1956
Timelines Revision in leasing method should be worked out based on prevailing market rents – A
Medium Term Measure (1-3 years).
Introduction of on-line system for collection of lease rent may be targeted in Medium
Term (1-3 years).
Remark Effective tool to increase revenue of BMC.
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5.3 BUILDING PERMISSION FEE
The Building Fee in Bilaspur is charged as under:
(a) For residential development @ Rs. 11 – Rs. 30 per sqm
(b) For commercial building @ Rs. 16.5 – Rs. 45 per sqm.
The above method is area based and does not take into account the market value of the underlying asset, hence
fails to capture value though there is a provision of 10% increase every year.
The average circle rate of land in Bilaspur varies from Rs. 13,000 per sqm to Rs. 45,000 per sqm. The averaged
out building fee rate for residential development works out at Rs. 20 per sqm while that for commercial development
works out at Rs. 30 per sqm
An analysis of land values in different localities of Bilaspur vis-à-vis current building permission fee for same size
of property is presented in Table 5-9:
Table 5-9 : Building Permission Fee amount as percentage of Land Values
Building
Building
Area of Value of permission
Land Value permission
Locality property Land (in charge as
(in Rs/sqm) fee
(area in sq ft) Rs.) %age of
@Rs.20
Land Value
1 Harijan Mohalla 13000 1200 2230 1449275 0.15%
2 Kasturba Nagar 14000 1200 2230 1560758 0.14%
3 Ganga Nagar 15300 1200 2230 1705686 0.13%
4 16800 1200 2230 1872910 0.12%
Mandir Road
Both sides under
5 19500 1200 2230 2173913 0.10%
Overbridge
6 21000 1200 2230 2341137 0.10%
Chowk
7 32500 1200 2230 3623188 0.06%
8 45000 1200 2230 5016722 0.04%
Shefar School
This analysis reflects that the Building Fee on low valued plots is 4 times higher than the plots which are high
valued. Therefore, the area-based rates are iniquitous and results in loss of substantial revenue. It is therefore
suggested to charge the Building Fees based on the land value without increasing the total liability for the citizen
who holds plots with lesser market value. This can be done by applying the effective rate of Building Fee as
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a percent @ 0.15% of notified land rate applicable to the lowest land rate (Rs. 13,000/- per sqm) to all land parcels.
During the FY 2015-16, BMC collected INR 218 lakh from building fee. Going by the analysis as presented in the
previous para, the potential revenue can be enhanced by 4 to 5 times thereby resulting in potential revenue of
about INR 800 lakh to INR 900 lakh per annum from Building Fee.
Similarly, the rates of land development approval fees @ Rs.50/-per acre and fees for development of colony @
Rs.50000/- per hectare, based on per acre /hectare of plot area look easy to understand and administer but the
same are not equitable as the same are more (in terms of percentage of land value) for the land parcels which
have less market value. Moreover, the area-based rates are not buoyant as they do not keep pace with increase
in value of land. This results in loss of potential revenue. Moreover, whenever the rates are sought to be revised
in line with rise in market value, it requires amendment of Law/Rules which is a lengthy legislative procedure. If
the rates are linked to land value, the same would automatically keep pace with change in the notified land rates
and no amendment of law/rules will be required.
Table 5-10: Cost – Benefit Analysis for Building Permission Fee

Instrument Name Building Fee/ Construction Fee
Existing Status The Building Permission Fee is charged for new constructions under the provision of
the Chhattisgarh Bhumi Vikas Rules, 1984
Potential Value The annual incremental revenue potential of 4 to 5 times by moving from area-based
method to value based method.
Efficiency Building fee when linked to market rentals will ensure buoyancy in the value capture.
Equity Building fee based on prevailing market value will ensure equity.
Adequacy The annual revenue potential could be INR 800 lakh to INR 900 lakh.
Manageability Building Permission Fee is collected upfront. Online system for collection of building
construction fee may be introduced to reduce administrative costs.
Legal Feasibility Chhattisgarh Bhumi Vikas Rules, 1984
Timelines Move from area-based method to value based method will need amendment in Act – A
Medium Term Measure (1-3 years).
Introduction of on-line system for collection of building construction fee may be targeted
Remark Effective tool to increase revenue of ULB.
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5.4 Development Charges
States like Andhra Pradesh, Gujarat, Maharashtra, Tamil Nadu and Madhya Pradesh levy Impact Fee and collect
it upfront while granting development permissions. In Hyderabad, the Impact Fee is charged based on the width
of the road abutting the property and it varies from Rs. 200/- to Rs. 400 per sq. ft on total built up area. It is legally
backed by Andhra Pradesh Urban Areas (Development) Act, 1975 and under Special Development Regulations.
Development charges are levied in Chhattisgarh backed by the Chhattisgarh Nagar Tatha Gram Nivesh
Adhiniyam, 1973, Section 59.
built up area depending on the usage, no of floor and size of plot under developments. The method of calculation
of development charges does not take into account the market value of the underlying asset, hence fails to capture
value. The method also lacks buoyancy.
An analysis of currently charged Development Charges as a percentage of value of underlying asset is presented
in Table 5-11 below.
Table 5-11: Analysis of currently charged Development charges as a percentage of value of underlying asset
Development Permission
Average Value of
Land Value charge @ charge as
Locality building Land (in
(in Rs/sqm) Rs.53.8 per %age of
area (sq ft) Rs.)
sqft Land Value
1 Harijan Mohalla 13000 1200 64560 1449275 4.45%

2 Kasturba Nagar 14000 1200 64560 1560758 4.14%
3 Ganga Nagar 15300 1200 64560 1705686 3.78%
16800 1200 64560 1872910 3.45%
4 Mandir Road
Both sides under
5 19500 1200 64560 2173913 2.97%
Overbridge
21000 1200 64560 2341137 2.76%
6 Chowk
32500 1200 64560 3623188 1.78%
7 Maharana Pratap Chowk
45000 1200 64560 5016722 1.29%
8 Shefar School
* For a standard residential unit size of 1200 sq. ft, estimated development charge is Rs. 64,560 @ Rs.53.8 per
sq. ft, which is the applicable charge for a residential development at ground floor with plot area less than 1500 sq.
ft
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From the above table 5-11, it is seen that the development charges are non-equitable. Property owners with leased
property value are exposed to highest development charges.
Section 59 of The Chhattisgarh Nagar Tatha Gram Nivesh Adhiniyam, 1973 provides for levy of Development
charges. Section 59 (1) states that where as a result of the implementation of town development scheme, there is,
in the opinion of the Town and Country Development Authority, as appreciation in the market values of lands
adjacent to and affected by a scheme the Town and Country Development Authority may, in lieu of providing for
the acquisition of such land, levy development charges on owners of such land. Sub-section 59(2) lays down the
rate for levying development charges. It states that the development charges shall be an amount equal to not less
than one-fourth and not more than one-third of the difference between the value of the land on the date of
publication of the intention to prepare the town development scheme and the date of completion of the scheme.
The provision in the Act is linked to the value of the land however the implementation at present is based on area-
based method. In order to effectively capture land value increment, create buoyancy and equity, it is recommended
to transition from the current area-based development charges to value linked charges.
Table 5-12: Cost – Benefit Analysis for development charges
Instrument Name Development charge

Existing Status Charged along with the building permission fee
Potential Value If charged as per Section 59 of The Chhattisgarh Nagar Tatha Gram Nivesh Adhiniyam,
1973 @ an amount equal to not less than one-fourth and not more than one-third of the
difference between the value of the land on the date of publication of the intention to
prepare the town development scheme and the date of completion of the scheme, the
revenue potential for the ULB is substantial
Efficiency Development charges when linked to market rentals will ensure buoyancy in the value
capture.
Equity Development charges based on prevailing market value will ensure equity.
Adequacy If the development charge is levied @ 4.5% (the rate which currently is levied on the
land parcels with least value) of the land value, the current average rate of Rs. 53.8 per
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Instrument Name Development charge

sqft will increase to Rs. 83 per sqft. This will result in an increase in revenue of the ULB
by almost 50%. Therefore the revenue potential could be sizeable.
Manageability Development charge is collected upfront along with building permission fee. Online
system for assessment and collection may be introduced to reduce administrative
costs.
Legal Feasibility The Chhattisgarh Nagar Tatha Gram Nivesh Adhiniyam, 1973, Section 59
Timelines Move from area-based method to value based method – A Short Term Measure (0-1
years).
Introduction of on-line system for collection of development charges may be targeted
Remark Effective tool to increase revenue of BMC.
5.5 Premium on Relaxation of Rules or Additional FSI/FAR
Sale of additional FSI is a planning and fiscal tool whereby the Local Planning Authority provides development
rights in excess of the baseline FSI in exchange of payment of a pre-defined premium. The basic principle behind
this fiscal tool is the separation of property rights and development rights. As a planning tool, premium FSI can be
used effectively for managing the density of urban areas. For example, higher FSI along transport corridors such
as metro lines (Transit Oriented Development) encourages greater use of public transport and prevents urban
sprawl.
As a fiscal tool, premium FSI is effective in locations where developable land is scarce or the baseline FSI is low.
It needs to be used judiciously as it serves as a perverse incentive to local authorities to restrict baseline FSI use
the tool for revenue maximisation, often leading to erosion of the legitimate tax base (such as property or land
value tax).
More and more States are coming with the policy of saleable FSI/FAR. It is widely used in Maharashtra, Karnataka,
Gujarat and Tamil Nadu to allow for additional development rights beyond the permissible limits in the state town
planning laws and regulations. Nagpur Municipal Corporation (NMC) has adopted a policy of increasing FSI/FAR
by 0.3 by paying premium to it. The premium will be charged at the rate of 60% of ready reckoner value for
residential constructions and at the rate of 90% for commercial constructions. Half of the premium collected by
NMC will go to the state government. This policy is only applicable for non-congested areas.
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Purchase-able FAR is one the most effective VCF tools for the cities/areas where land values are high. The
instances of unauthorised construction are very high in the city of Bilaspur. Hence it represents the need for
regulating and institutionalizing this widely used value capture tool of charging a premium on additional FAR.
Under the Chhattisgarh Municipal Corporation Act, 1956, there is provision of relaxation in compounding the
unauthorized construction and regularization of unauthorized colonies. There are provisions of hefty regularisation
charges on such constructions. However, the Municipal Commissioner has authority to regularize the construction
only if the unauthorised area is 10% of permissible constructed area. In such scenario, the instances of people
going for regularisation are very less. There are regularisation drives by state government under the provisions of
Chhattisgarh Anadhikrit Vikas Ka Niyamitikaran Adhiniyam for regularisation of unauthorised constructions and
colonies beyond the 10% mark. The last such drive was announced in 2014-15, after almost 10 years of previous
such drive-in year 2003. The provision of premium for purchasable FAR will also help in curtailment of instances
of unauthorised construction.
5.5.1 Revenue Potential from Premium on relaxation of rules or additional FSI/FAR
Some of the key assumptions made to estimate revenue from sale of FAR are as follows:
(a) Overall sale-able FAR is kept at 0.25 over the base FAR of 1.5. The percentage proposed increase in
FAR therefore works out at 16%.
(b) Only 25% people will go for purchase-able FAR thereby resulting in selling of 4% area.
(c) Assuming the purchasable FSI to be charged at 50% of circle rate.
(d) Average circle rate for plots in Bilaspur is Rs. 23,000 per sqm.
(e) The purchase-able FAR cost therefore works out at Rs. 11,500 per sqm
Based on the above assumptions the potential revenue from purchase-able FAR has been worked out and
presented in Tables 5.13.
Table 5-13: Revenue Potential from Purchase-able FAR
Estimated Building
Average Sellable Rate of Saleable Area Revenue from Sale of
FY Permission Area (in sq
FAR (Rs per sq mt) * @ 4% (in sq mt) FAR (in Rs Lakh)
mt)
2017-18 11500 20,000 800 92.00
2018-19 11845 20,000 800 94.76
2019-20 12200 20,000 800 97.60
2020-21 12566 20,000 800 100.53
2021-22 12943 20,000 800 103.55
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Estimated Building
Average Sellable Rate of Saleable Area Revenue from Sale of
FY Permission Area (in sq
FAR (Rs per sq mt) * @ 4% (in sq mt) FAR (in Rs Lakh)
mt)
2022-23 13332 20,000 800 106.65
2023-24 13732 20,000 800 109.85
2024-25 14144 20,000 800 113.15
2025-26 14568 20,000 800 116.54
2026-27 15005 20,000 800 120.04
Note: * The annual increase in Circle Rate have been assumed at 3%
If BMC introduces concept of purchase-able FAR, they can generate a potential revenue of Rs. 94.76 lakh during
the FY 2018-19 based on the assumptions considered herein. This will also help BMC is handling the menace of
unauthorized constructions/ additions currently happening in the commercial segments.
Table 5-14: Cost – Benefit Analysis for purchasable FAR

Instrument Name Premium on Relaxtion of Rules or Additional FSI/FAR
Existing Status In Chhattisgarh there is no provision in any Act for charging any premium or fees for
grant of any additional FSI. Section 24A of the Chhattisgarh Nagar Tatha Gram Nivesh
Adhiniyam, 1973 provides for construction of an additional floor in a residential building.
Section 358 of The Chhattisgarh Municipal Act,1956 confers Power to make bye-laws
governing height of buildings; the number and height of storey's.
Potential Value The annual revenue potential of Rs. 94.76 lakhs in 2018-19
Efficiency Through the use of additional FAR as a fiscal tool, the planning authority can efficiently
incentivise vertical development and prevent urban sprawl. Doing this through market-
based incentives is far more efficient then doing the same through strict development
restrictions as the letter is prone to non-compliance.
Equity The charge is equitable as cost of FAR is linked with the property value
Adequacy The revenue potential could be sizeable.
Manageability Development charge is collected upfront along with building permission fee. No
additional cost is required to manage.
Legal Feasibility Can be introduced either in Chhattisgarh Nagar Tatha Gram Nivesh Adhiniyam, 1973
or The Chhattisgarh Municipal Act,1956.
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Instrument Name Premium on Relaxtion of Rules or Additional FSI/FAR

Timelines Require concurrence from State Legislative Assembly – A Medium Term Measure (1-3
years).
Remark Effective tool to increase revenue of ULB and will also help in curtailing the practice of
unauthorised construction.
5.6 Remunerative Use of Land Parcels
The present Policy on Value Capture is restricted to enabling capture of value from increases in private land
valuation from public investments and public policy actions and does not cover direct monetization (sale/leasing)
of government land. However, land monetization options can help converting under-utilized and/or vacant land
parcels into an income generating ones. A process driven approach could help derive significant annuity revenues
for BMC.
As per SCP for Bilaspur, to meet the capital cost of implementation of smart city challenge proposal Rs. 2176 crore
will be mobilized through PPP channel. It is anticipated that 145 acres of land will be made available for
redevelopment. The PPP revenue streams as given in SCP are presented in Table 5-15:
Table 5-15: PPP revenue streams as per Smart City Proposal- Bilaspur
S.No. Description Revenue Mobilization (in Rs. Crore)

1 Baney Ghar (Housing) 7.53
2 Baney Utthaan (Upliftment) 632.14
3 Baney Swasth (Health) 0.42
4 Baney Hariyar (Green) 77.99
5 Baney Bazaar (Markets) 1240.52
6 Baney Parivahan (Transport) 216.23
7 Baney Akikaran (Integration) 0.99
Total 2175.82
The anticipated realization of revenue from monetization of land parcels could be around Rs. 1758 crore as shown
in Figure 19.
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Figure 19 : Estimated Revenue from Monetization of Land Parcels
The shortfall post monetization of land parcels will be Rs. 418 crore which can be generated through user charges
as shown in below.
Figure 20: Shortfall in the CAPEX post land monetization as per SCP-Bilaspur
In order to meet the CAPEX, besides monetization of land parcels, collection of Rs. 577 per sqm of land area is
desired for a period of 5 years from the private land with in ABD area.
5.7 Revenue from Regularization of Unauthorized Colonies
The details of unauthorized colonies in Bilaspur are as under:
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S.No. Construction Location Khasra Numbers Area (in acre)

1. Bhartiya Nagar 638, 639, 640, 641, 642, 643, 650 10.07
and others
2. Telipara (Ward No. 24) Medical Complex 326 0.29
3. Ward No. 25 – Kudru Bari Kumharpara 338 1.5
4. Devnandan Nagar Phase 1 & 2 Ward No. 42 113, 118, 133 and others 43.32
5. Shivaji Marg Tikrapara Ward No. 34 As per map of T&CP 2.30
6. Hemu Nagar Part Plan 1 Ward No. 38 1216, 1217, 1226, 1229, 1289, 9.86
1230, 1232, 1231, 1233, 1243/1,
1254, 1250, 1246, 1236, 1255,
1290, 1249
7. Ganesh Nagar (near over bridge) 924, 942/2, 950, 951, 952 1.34
8. Ward No. 42 (on road to Ashok Nagar) 419 and others 2.53
9. Ward No. 36 (near Torva Railway Pump 249, 276 1.35
House)
10. Ward No. 45 (behind Sarkanda Badhwapara 257, 258 3.25
Satbahaniya Mandir)
11. Arvind Nagar Ward No. 45 74, 77, 78 (part) 2.11
12. Land adjacent to Revenue Colony 26 0.93
13. Kasimpara 747 to 753, 755, 756 9.25
14. Ward No. 36 (on Devri Khurd Road) 1336/2, 1336/3 1.96
15. Ward No. 36 (near Tareva Bridge) 507 1.10
16. Hemu Nagar Part Plan – 3 Ward No. 38 1146, 1174 to 1185, 1218 to 1223, 40.00
1225, 1226, 1264 to 1276, 1280,
1281, 1167 to 1170, 1262
17. Near Kasimpara Kabristan 741 0.50
18. Ward No. 45 Arvind nagar Sarkanda Choube 371/2, 372/2, 371/28, 372/30, 1.70
Colony 375/3
19. Ward No. 3 Nehru Nagar – area near 353 2.57
Geetanjali Vihar Colony
20. Village Ameri Ward No. 4 Kasturba Nagar 479/1, 480/1 1.21
21. Village Kududand Ward No. 3 (area near 412/2 1.74
Nehru Nagar Parijaat Extension)
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S.No. Construction Location Khasra Numbers Area (in acre)

22. Village Juna Ward No. 14 (area within Hans 638 (part) 1.00
Vihar Colony adjoining Srikant Verma Road)
23. Ward No. 38 Hemu Nagar 784 to 788, 799, 801, 802, 837 to 76.86
862 (except 855, 858, 859), 873 to
899, 903 to 906, 1202 to 1209,
1214, 1215, 1233, 1236 to 1240,
1216 to 1218, 1254, 1289/1, 1216,
1185 (part)
24. Ward No. 39 Ganesh Nagar 924, 942/2, 950, 951, 952, 970/7, 1.34
970/8
25. Ward No. 25 Juna Bilaspur Sant Ravidas 337, 338 2.50
Nagar Kashyap Colony
26. Ward No. 36 Vivekanand Nagar 1341/2 0.30
27. Village Chatidih 207/4 (part) 0.63
28. Ward No. 31 (adjacent to High Court) 201/14 1.70
29. Ward No. 28 (Madhuban Road) 22 0.27
Total Area (in acre) 223.70
Bilaspur Municipal Corporation is providing services viz. drainage works, road works, electrification, water supply,
etc. in these colonies. The Development Charge is levied @ Rs. 25 per sq ft. This will result in potential revenue
of Rs. 24.35 crore to BMC.
built up area depending on the usage, no of floor and size of plot under developments. As discussed in the earlier
section, the development charges when translated to the land value (Collector Rate) on low valued plots works out
at around 4.5% of the land value (Collector Rate). It was therefore suggested to levy the Development Charges @
4.5% of notified land rate. In cases of regularized colonies, assuming that the land value (Collector Rate) is lowest
i.e. Rs. 13000/- per sqm, the overall revenue potential could be around Rs. 53.0 crore.
5.8 Expanding Municipal Limits
There are significant developments just across the Municipal Limits of Bilaspur and these developments to a large
extent enjoys the municipal services provided by Bilaspur Municipal Corporation. The stakeholder analysis
suggested to look into possibility of increasing the municipals limits.
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The Chhattisgarh Municipal Corporation Act, 1956 provides for Determination of number and extent of wards and
conduct of elections under Section 10 (1). The State Government shall from time to time, by notification in the
official gazette, determine the number and extent of wards to be constituted in each municipal area Provided that
the total number of wards shall not be more than seventy and not less than forty in any municipal area.
Section 10 (3) further lays down that the formation of the wards shall be made in such a way that the population of
each of the wards shall, so far as practicable, be the same throughout the city and the area included in the ward
is compact.
Section 10 (4) of The Chhattisgarh Municipal Corporation Act, 1956 also requires that as soon as the formation of
wards of a municipal area is completed, the same shall be reported by the State Government to the State Election
Commission.
Section 405 of The Chhattisgarh Municipal Corporation Act, 1956 provides for Power of Governor to include or
exclude certain area.
Section 405 (1) states that the Governor may, by notification in the gazette, declare the intention to include within
or exclude from the limits of the city, any specified area.
(2) If the Local Authority having jurisdiction in the said area or any person resident therein, objects to such
declaration, such Authority or person may submit an objection in writing to the Collector "within a prescribed period"
and Governor shall take such objection into consideration.
(3) When the said period has expired and the Governor has considered the objection under sub-section (2), the
Governor may by notification, include within or exclude from the limits of the city any specified area:
Provided that when an area is excluded from the limits of any municipal area, such area notwithstanding such
exclusion shall continue to be within the limits of the municipal area until the area so excluded is included in a duly
constituted Panchayat area.
Section 406 of The Chhattisgarh Municipal Corporation Act, 1956 states the Effect of inclusion.
Section 406 (1) states that When the said area is included within the limits of the city under Section 405 the effect
is -
(a) the Municipal Law or any other Act dealing with local self-government, as the case may be, if in force in such
area shall be deemed to be repealed therein; and
(b) except as the Government may otherwise by notification in the Gazette direct, all rules, bye-laws, regulations,
notifications, orders, directions and powers made, issued or conferred under this Act and in force at the dale of
inclusion shall apply to the said area, in supersession of all corresponding rules, bye-laws, regulations,
notifications, orders, directions and powers made, issued or conferred under the Act deemed to be so repealed.
Section 406(2) of The Chhattisgarh Municipal Corporation Act, 1956 further empowers the state Government to
issue such orders as may be necessary to give effect to the inclusion of the said area and any matters
incidental or ancillary thereto.
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Accordingly the state Government framed the Chhattisgarh Nagarpalika (wardon ka vistar) Niyam,1994 for Division
of municipal area into wards, Boundaries of wards, demarcation of boundaries of wards and lays down even the
format by way of Annexure to the Rules for Publication of Proposals regarding demarcation of boundaries of wards
in municipal corporation areas.
Rule 3 of the Chhattisgarh Nagarpalika (wardon ka vistar) niyam,1994 deals with Division of municipal area into
wards.
Rule 3(1) provides for Division of municipal area into wards equal to the number of prescribed wards by the State
Government under section 10(1) 0f the Municipal Corporation Act,1956
Rule 3 (2) provides that the Population of each municipal area divided by prescribed number of wards for that
municipal area shall be the average population for each ward of that municipal area in which maximum variation
up to 15% is allowed.
Rule 4 deals with Boundaries of wards - Boundary of every ward shall be demarcated on all four sides-north, east,
south and west.
Rule 5 provides for Serial number and name of each ward - Every ward shall be allotted its serial number and such
serial numbers shall be in a continuous manner.
Rule 6 clearly lays down the manner of preparation of proposals for demarcation of boundaries of wards as under-
(1) Proposals for demarcation of ward boundaries shall be prepared by the District collector of the district
in which the municipal corporation is situated
(2) Collector’s proposals regarding boundaries of wards shall include following information-
(i) Borders on all four sides of the wards
(ii) Maps in which all four directions of each proposed ward shall be shown in such a way that
boundaries of each ward clearly shown separately
(iii) Notification about population based on latest published figures of census showing total population
of municipal corporation area ,total population of SC/STs, total number of wards fixed by state
Government for the concerned municipal area and the average population per ward on that basis
(iv) Population of each proposed ward and figures of population of SC/STs in each ward
Rule 7 requires Prior Publication of demarcation of boundaries of wards and calling for objections/suggestions
from the affected persons.
The collector shall publish information about the proposal prepared under Rule 6 in local Newspapers in the format
given in the Annexure to these Rules and copies of the information shall be put up on the notice boards of collector’s
office and municipal corporation office and pasted on the conspicuous places in the wards for information of general
public
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Rule 8 mandates the Disposal of objections /suggestions received before Final publication
Any citizen can file his objection/suggestion regarding the collector’s publication of proposed boundaries of wards
within 7 days of publication of the collector’s proposal which the collector shall forward to the state government
along with his comments and the state government shall take a decision after considering the comments of the
collector on the objections/suggestions received, and publish the notification regarding demarcation of boundaries
of wards in Gazette. Publication in the Gazette shall be conclusive proof of demarcation of boundaries and shall
be final
Annexure (see Rule 7)

FORMAT for
Publication of Proposals regarding demarcation of boundaries of wards in municipal corporation areas
It is hereby informed that Bilaspur Municipal Corporation area has been divided into ___________ wards and
proposals have been prepared for each ward for demarcation of the boundaries thereof which are available for
inspection during office hours in the office of the municipal corporation of Bilaspur.
Objections/Suggestions, if any, with respect to the proposals can be filed in writing in the District collector’s office
within 7 days of the publication of this notice
Place
Dated
Rationale and Legal Framework for inclusion of New Areas into Bilaspur Municipal Corporation areas:
1. For inclusion of the adjacent area into the municipal corporation area, it has to be continuous and compact
having population approximately equal to the average ward population.
2. The new specified area to be included in the municipal area has to be given continuous serial number
and a ward name.
3. The maximum number of wards permissible in a Municipal Corporation in Chhattisgarh under The
Municipal Corporation Act 1956 is 70. The existing number of wards in Bilaspur is only 59. Therefore
there is ample scope for adding more wards from outside the municipal area in both.
4. The areas adjacent to the Municipal Corporation area are urbanized having a population equal to the
average population of a municipal ward. The residents of such adjacent area are taking full advantage of
good education and employment resources in the municipal area without contributing anything by way of
revenues to the municipal corporation. Their inclusion in the municipal area will allow them better civic
facilities and in turn enable the municipal body to collect taxes from properties falling in the adjacent area.
5. A map of the new ward showing all four boundaries –east, west, north and south, must be prepared to be
published by the Governor in the gazette notification of the intention to include the area in municipal
area.
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6. The figures of population as per latest census with number of SC/STs be also given.
7. A notification copy be published in local newspapers allowing at least 7 days time to file written objections
/suggestions in the District collector’s office on the intention to include the specified area in the municipal
area and copies of the notification placed on the notice board in Municipal corporation office, concerned
District collector office and also pasted on conspicuous places in the new area proposed to be included
in the municipal area.
8. The objections/suggestions received along with comments of the District collector be sent to the Governor
for his consideration and after considering which a final notification from the Governor be published in
local newspapers regarding inclusion and that shall be binding.
5.9 Stakeholder Consultations
The consultant team carried out consultations with the officials from Municipal Corporations Durg, Bhilai,
Rajnandgaon, Bilaspur, Korba, Ambikapur, Raigarh and Jagdalpur as well as officials from SUDA on various VCF
tools and their applicability in the context of respective municipal corporations. The VCF tools as given in the
National VCF Policy Framework prepared by MoHUA were discussed in detail. The current provisions of land
based taxes and user charges were discussed. Opinion on various possibilities to increase the revenue base from
land were given and discussed. The analysis presented above is based on these consultations.
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CHAPTER 6:
IMPLEMENTATION FRAMEWORK
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6 IMPLEMENTATION FRAMEWORK
6.1 IDENTIFICATION OF CLAUSES TO BE AMENDED
6.1.1 Rationale for Change in Area Based Rates of Building Related Fee
Rule 12. Form of application for permission for development of land by others –
(A) Any person not being the Union Government, State Government, or Local Authority, special authority
shall apply under the sub-section (1) of section 20 in Form VII for permission for development of land and
in Form VIII for development of land along with the schedule and specification sheet attached with the
application form. (B) Fees. – Every application submitted under sub-section (2) of section 29 shall be
accompanied by a fee specified below:
(iii) For the development of land other than erection of a building Rs. 50 per acre or part thereof.
(iv) For building operation.
S.No. Area Rate of Fee for Rate of fee for

ground floor subsequent storey
i For a ground floor area up to 1200 sq.ft Rs.20/- Rs.15/-per storey
ii For a ground floor area of more than Rs.25/- Rs.20/-per storey
1200 sq.ft. but not exceeding 3000 sq.ft.
iii For a ground floor area of more than Rs.50/- Rs.40/-per storey
3000 sq.ft. but not exceeding 6000 sq.ft.
iv For a ground floor area more than Rs.75/- Rs.50/-per storey
6000 sq.ft. & above.
Note 1- For purposes of calculation of the fee ground area shall mean the area of the portion which is proposed to
be built upon excluding the internal court yard and portion.
Note 2- For purposes of rates prescribed above the basement where provided will be regarded as the first storey,
the ground floor over the basement as the second storey and so on.
As elaborated in Section 5.2 of Chapter 5, the area-based rates towards Building Plan Sanction Fees as
given above, are not buoyant as the same are not designed to keep pace with any changes in the land
values. To bring in buoyancy and to make the fee rates equitable it is necessary to link the fee rate with the
prevailing land prices.
In Chhattisgarh, the compounding fee for regularization of unauthorized construction is based on value of
the property thus relating the fee and levies to value of the property is not new in Chhattisgarh.
Linking building plan sanction fee to prevailing land prices will ensure automatic increase in rates
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and obviate the need for revision of rates which requires a lengthy process. The land rates however should
be regularly monitored and revised annually as is done for stamp duty purpose.
Similarly, the rates of land development approval fees @ Rs.50/-per acre and fees for development of
colony @ Rs.50000/- per hectare, based on per acre /hectare of plot area look easy to understand and
administer but the same are not equitable as the same are more (in terms of percentage of land value) for
the land parcels which have less market value. Moreover, the area-based rates are not buoyant as they do
not keep pace with increase in value of land. This results in loss of potential revenue. Moreover, whenever
the rates are sought to be revised in line with rise in market value, it requires amendment of Law/Rules
which is a lengthy legislative procedure. If the rates are linked to land value, the same would automatically
keep pace with change in the notified land rates and no amendment of law/rules will be required.
The need to change the unjust and iniquitous rates of fees is also mandated by the provisions of Section
131 of the Chhattisgarh Municipal Act 1961 which are elucidated in next section.
6.1.2 Power of Government to abolish, suspend or reduce the amount or rate of any tax under the
Chhattisgarh Municipalities Act, 1961.
Section 131 of The Chhattisgarh Municipal Act,1961 - Power of State Government in regard to relief in
taxes, if, on a complaint made to it or otherwise, it appears to the State Government that any tax levied by
a Council is unfair in its incidence or that such levy or any part thereof is obnoxious to the interest of the
inhabitants of the Municipality, it may, by an order, require the Council to remove the objections to any such
tax within such time as may be specified, therein, and on the failure of Council to comply with the order
within the time so specified to the satisfaction of the State Government the State Government may, by
notification and subject to such conditions or restrictions as may be specified therein, abolish, suspend or
reduce the amount or rate of any tax.
The case for a change from area-based development charges to value-based development charges is
supported by the example of Mumbai. It could be presented to illustrate the magnitude of benefits that might
accrue if value-based rates are adopted. The rate of development charge under the Maharashtra Regional
and Town Planning Act prevalent since 1992 till 2010 in Mumbai was Rs. 350 per sq.m for residential or
institutional use. It was 1.5 times for industrial uses and 2 times for commercial uses. This rate in 2009-10
was less than 0.11 to 0.58% of the then notified rates of market value of land. The revenue earned on
account of development charge in 2007-08, 2008-09 and 2009-10 was Rs. 61.44, Rs. 87.13 and Rs. 132.8
cores respectively. As the rates remained unchanged the growth in revenue was purely on account of
physical expansion of development area. In 2010 the rate was changed from area-based rates to
value based rate of 2.5% of land value as determined in the Ready Reckoner which are applicable
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for charging stamp duty on transfer of property. As a consequence, the development charge revenue
increased to Rs. 225.1 cores in 2010-11 and to Rs. 306.9 cores in 2011-12. Moreover, Jantri rates are
generally lower than the real market rates. If the Jantri valuation is improved to reflect real market rates, the
revenue could be substantially higher.
6.1.3 Rationale for change in Rates of Premium on diversion of land use under The Chhattisgarh Land
Revenue code, 1959 (Rules regarding Alteration of Assessment and Imposition of premium for the
purpose of levy of premium on Agricultural land)
Rule 14.(1) of the Rules regarding Alteration of Assessment and Imposition of Premium for the purpose of
levy of premium on agricultural land provides that for the purpose of levy of premium of agricultural land
diverted to non-agricultural purposes, in any town and village in the State of Chhattisgarh shall be divided
into the following classes as shown in column (1) of Schedule-A appended to these Rules and the premium
shall be imposed according to the rates specified in column (2), (3), (4), (5), (6), and (7) of the said Schedule.
Schedule-A
Purpose Unit/Colony/ or Institutional Facility
Project Industrial Purpose
Purpose
Municipal Rs.15/- per Rs.20/- per Rs.25/- per Rs.20/- per Rs.20/- per Rs.15/- per
Corporation and sqm sqm sqm sqm sqm sqm
Nagar Palika Area
5 km within Rs.10/- per Rs.15/- per Rs.20/- per Rs.15/- per Rs.15/- per Rs.10/- per
Municipal sqm sqm sqm sqm sqm sqm
Corporation and
Nagar Palika Area
The area-based rates of Diversion Premium as given above, are not buoyant as the same are not designed
to keep pace with change in the land values. Therefore, the rates need to be made land value based as a
percent of land rate for sale/purchase. Linking fee rates to prevailing land prices will ensure automatic
increase in rates and obviate the need for revision of rates which requires a lengthy process. The land rates
however should be regularly monitored and revised annually as is done for stamp duty purpose.
Moreover, the area based rates of Diversion Premium are unjust and iniquitous as the same when translated
to percentage of land value works out relatively higher for land parcels with low market value.
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For instance, the Diversion Premium @ Rs.25/- per square meter for land in Harijan Mohalla Bilaspur will
work out to 0.19% {(25*100)/(13000)} of the market value of land of Rs.13000/- per square meter. However,
in case of Minocha Colony area where the land rate is Rs.22000/- per square meter, the Diversion Premium
will come to only 0.11% of the market value of land. Similarly, in case of Narmada Nagar Chowk - Bhopar
School area where the land rate is Rs.45000/- per square meter the diversion premium works out to 0.055%
(25*100/45000) of the market value of land. Therefore, the area-based rates are iniquitous and results in
loss of substantial revenue. It is therefore suggested to charge the Diversion Premium based on the land
value without increasing the total liability for the citizen who holds plots with lesser market value. This can
be done by applying the effective rate of Diversion Premium as a percent @ 0.19% of notified land rate
applicable to the lowest land rate (Rs. 13000/- per sqm) to all land parcels.
The case for a value-based levy of charges for change of land use is supported by practice in other states
like Rajasthan where, in exercise of powers conferred by sub-section (I) of Section 74 and Section 73-B of
the Rajasthan Urban Improvement Act, 1959, the State Government of Rajasthan made the rules called the
Rajasthan Urban Improvement (Change of use of Residential Land or Premises for Commercial Purposes)
Rules, 1974. Rule 5 (1) of these Rules provides that the State Government shall consider recommendation
of the Collector and may allow the change of the use of residential land and/or premises of the applicant to
commercial purpose subject to the payment of conversion charges subject to Rule 5(2) which provides that
the applicant shall pay the following conversion charges:
a. Where the change of use is in respect of land and/or premises with full proprietary rights - 75% of
the appreciated value of such land and/or premises subject to a maximum of Rs. 200/- per sq. yard
if such change of use is only for hotel purpose and Rs. 100/- per yard if the change of use is only for
cinema purpose.
b) Where the change of use is in respect of land or premises with lease hold rights 5% of the
appreciated value of such land/or premises which shall be subject to revision every 15th year in the
first instance and every 10th year later on and the amount of upward revision shall at each state be
not less than 24% but shall not exceed Rs. 200 per sq. yard if such change of use is only for hotel
purpose and Rs. 100/-per sq. yard if the change of use is only for cinema purpose.
However, the rates of conversion charges @ 75% of the appreciated value of land and/or premises
converted to commercial use under The Rajasthan Urban Improvement (Change of Use of Residential Land
or Premises for Commercial Purposes) Rules, 1974, has been capped at the maximum of Rs. 200/- per
square yards for Hotels and at Rs.100/- per square yards for cinemas, but it remains on the higher side for
others.
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Conversion fee under the Chandigarh Conversion of Land Use of Industrial sites into Commercial activity
/services in industrial area, phase-I and phase-II, Chandigarh Scheme 2005 (published in gazette dated
19/09/2005) under Capital of Punjab (Development and Regulation) Act,1952 was declared under Clause
6(ii) to be 50% of the average price of the commercial sites fetched in the auctions held in the last 3 years.
6.1.4 Rationale for enacting Law/Rules for levy of Conversion charges on change of land use in urban
areas from residential to commercial / industrial use and for sub-division, and amalgamation of
plots:
The Chhattisgarh law provides for charging premium for permitting diversion of agricultural land from
agricultural land use to non-agricultural land use and provides for different rates of premium to be charged
for diversion of agricultural lands for different categories of land use i.e. residential land use, colony use,
commercial land use / industrial land use, institutional use ,SEZ use or Medical facility land use .The rates
in Municipal Corporation and Nagar Palika Area range from Rs.15/- per square meter for residential and
medical land use to Rs.20/- per square meter for colony project, institutional land use and SEZ land use to
Rs.25/- per square meter for commercial /industrial land use. However, in Chhattisgarh there is no provision
for charging fees for change of land use or land conversion / diversion from residential use to other non-
residential uses in urban areas under the relevant Acts like the Municipalities Act, the Development Act and
the Housing Board Act. Many other states like Rajasthan provide for the same.
Section 166 (1) of the Rajasthan Municipalities Act. 2009 provides for Declaration of Development Areas.
The Municipality may, with the approval of the State Government and by notification in the Official Gazette,
declare any area in the city to be a development area for the purposes of this Act. Under section 166 (2) -
on or after the date on which notification under subsection (1) is published in the Official Gazette, no person
shall institute or change the use of any land or carry out any development of land without the permission in
writing of the Municipality.
Section 171 (1) of the Rajasthan Municipalities Act, 2009 deals with Sanction for sub-division of plot or
lay out of Private Street. Every person who intends to sub-divide his land or his plot or make or lay out a
private street on such land or plot on or after the date of the operation of plan under Section 161 shall submit
the intended layout plan for such purpose together with such particulars and such fees, as may be
determined by bye -laws or by Government Orders, to the Municipality for sanction.
Section 177 (1) of the Rajasthan Municipalities Act,.2009 provides for restrictions on use and development
of land after declaration of a Scheme. On or after the date on which a draft scheme is published
under section 174, no person shall, within the area included in the project or scheme, institute or
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change the use of any land or building or carry out any development, unless such person has applied for
and obtained the necessary permission for doing so from the Municipality in accordance with the bye-laws
made in this behalf:
Section 182 of the Rajasthan Municipalities Act, 2009 states that there is restriction on change of use of
land and it is only within the power of the State Government to allow change of use of land. Section
182 (1) lays down that No person shall use or permit the use of any land situated in any municipal area, for
the purpose other than that for which such land was originally allotted or sold to any person by the State
Government, any Municipality, any other Local Authority or any other body or authority in accordance with
any law for the time being in force or, otherwise than as specified under a Master Plan, wherever it is in
operation. Section 182 (2) further states that in the case of any land not allotted or sold as aforesaid and
not covered under sub-section (1), no person shall use or permit the use of any such land situated in a
municipal area for the purpose other than that for which such land was being used on or before the
commencement of this Act. It is section 183 (3) which permits the state government to allow change of
use. It states that Notwithstanding anything contained in sub-section (1) or sub-section (2), the State
Government or any authority authorized by it by notification in the Official Gazette, may allow the owner or
holder of any such land to have change of use thereof, if it is satisfied so to do in public interest, on payment
of conversion charges at such rates and after inviting and hearing objections from the neighborhood in
such manner as may be prescribed with respect to the following changes in use, namely:
a) from residential to commercial or any other purpose; or
b) from commercial to any other purpose; or
c) from industrial to commercial or any other purpose; or
d) from cinema to commercial or any other purpose; or
e) from hotel to commercial or any other purpose; or
f) from tourism to commercial or any other purpose; or
g) from institutional to commercial or any other purpose:
Provided that rates of conversion charges may be different for different areas and for different purposes.
Where the State Government or any authority authorized by it under sub-section (3), is satisfied that a
person who ought to have applied for permission or regularization under this section, has not applied and
that such permission can be granted or the use of land can be regularized, it may proceed to determine the
conversion charges after due notice and hearing the party or parties and the charges as may be prescribed,
shall become due to the Municipality and be recoverable under sub-section (6). The Municipality may hold
camps for expediting this work and take the assistance of any agency as well: Provided that regularization
of land use change shall not be permitted in cases where the original land use was for a public
purpose such as education, medical or any charitable purpose and the allotment was made at any
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concessional rate unless the difference in the original rate of allotment and the prevailing is paid and specific
consent of the authority which made the original allotment has been obtained.
The Rajasthan Urban Improvement (Change of Use of Residential Land or Premises for Commercial
Purposes) Rules, 1974 lay down the rates for conversion charges for change of land use. The same are
briefly given below:
1) Rule 5 (2) of The Rajasthan Urban Improvement (Change of Use of Residential Land or Premises
for Commercial Purposes) Rules, 1974 lays down that the applicant shall pay the following
conversion charges:
a) Where the change of use is in respect of land and/or premises with full proprietary rights - 75%
of the appreciated value of such land and/or premises subject to a maximum of Rs. 200/- per sq.
yard if such change of use is only for hotel purpose and Rs. 100/- per yard if the change of use
is only for cinema purpose.
b) Where the change of use is in respect of land or premises with lease hold rights 5% of the
appreciated value of such land/or premises which shall be subject to revision every 15th year in
the first instance and every 10th year later on and the amount of upward revision shall at each
state be not less than 24% but shall not exceed Rs. 200 per sq. yard if such change of use is
only for hotel purpose and Rs. 100/-per sq. yard if the change of use is only for cinema purpose.
The Rajasthan Unified Building Bye-laws 2017 applicable to entire State prescribe the current fee for
allowing sub-division / reconstitution of plots on covered area of plot as under:
a. Sub-division: Rs. 50/- per sqm.
b. Reconstitution of plot: Rs 100/- per sqm.
Section 73-B of the Rajasthan Urban Improvement Trust Act, 1959 also provides for Restriction on change
of use of land and power of State Government to allow change in use of land. Under section 73-B (2),
notwithstanding anything contained in Sub-section (1), the State Government or any authority authorized
by it, by notification in the Official Gazette, may allow the owner or holder of any such land, to have change
of use thereof, if it is satisfied so to do in public interest, on payment of conversion charges at such rates
and in such manner as may be prescribed with respect to the following changes in use:
a) from residential to commercial or any other purpose; or
b) from commercial to any other purpose; or
c) from industrial to commercial or any other purpose; or
d) from cinema to commercial or any other purpose; or
e) from any existing permissible use of land to any other purposes, as the State Government
may prescribe.
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It is also provided that rates of conversion charges may be different for different areas and for different
purposes. As per Government of Rajasthan, Urban Development Department Notification No. P.3(50)/n v
v/03/2012 dated 21/09/2012 issued under section 90A (4) of Rajasthan Land Revenue Act,1956 read with
Rajasthan Urban Areas (Conversion of agricultural lands into non-agricultural uses and allotment) Rules
2012, conversion charges called Premium per square yards in Jaipur Development Authority area (except
Lal Kothi scheme, 200 feet strip on both sides of JLN Road and Prithviraj Nagar scheme) the rates of
premium are as under:
Residential
• Upto 200 sq. yards within Corporation area = Rs.150/- per sq. yard
• More than 200 sq. yards within Corporation area = Rs.200/- per sq. yard
• Group Housing within Corporation area = Rs.150/- per sq. yard
Commercial
• Up to 200 sq. yards within corporation area = Rs.600/- per sq. yard
• More than 200 sq. yards within corporation area = Rs.800/- per sq. yard
These rates were valid up to 31/03/2014 and thereafter additional 5% per year. Also, these rates would be
increased by 10% for corner plots and plots on roads with 60 feet or more width.
6.1.5 Rationale for change in Rates of Betterment Charges under the Chhattisgarh Griha Nirman Mandal
Adhiniyam, 1972
Section 51 of the Chhattisgarh Griha Nirman Mandal Adhiniyam, 1972, Chapter XI provides for Assessment
and Recovery of Betterment Charges. Section 51(1) states that “When by making of housing scheme any
land in the area comprised in the scheme will in the opinion of the Board be increase in value, the Board in
framing the scheme may declare that betterment charges shall be payable by the owner of the land or any
person having an interest therein in respect of the increase in value of land from the execution of the
scheme”.
Section 51(2) of the Chhattisgarh Griha Nirman Mandal Adhiniyam, 1972, further states that “Such increase
in value shall be the amount by which the value of the land on the completion of the execution of the housing
scheme, estimated as if the land were clear of the buildings exceeds the value of the land prior to the
execution of the scheme estimated in like manner and the betterment charges shall be one half of such
increase in value”.
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The rate of Development Tax levied by the Municipal Corporation of Faridabad under section 118 of the
Faridabad Municipal Corporation Act, 1994 on increase in land values as a result of execution of
development schemes, is equal to one-half of the increase and in case of Betterment charges levied by the
local Development Authority in Faridabad on the increase in land values as a result of execution of
development schemes it is fixed at one-third of the increase in land values.
Section 62 of the Rajasthan Urban Improvement Trust Act, 1959 gives power to the Improvement Trust to
levy betterment charges, where as a consequence of any scheme having been executed by the Trust in
any area, the value of any property in that area, in the opinion of the Trust, has increased or will increase,
the Trust shall, with the sanction of the State Government, be entitled to levy upon the owner of the property
or any person having interest therein a betterment charge in respect of the increase in the market value of
the property resulting from the execution of the scheme. Such betterment charge shall be an amount equal
to one-fourth of the amount by which the market value of the property on the completion of the execution
of the scheme, estimated as if the property were clear of buildings, exceeds the market value of the property
prior to such execution estimated in like manner.
The rate of levy of betterment charges under all the Acts is, however, dependent upon increase in market
value of land and if there has been no increase in land values in a particular year or for consecutive years
there will be no levy of the betterment charges by the Housing Board or the Improvement Trust or the
Municipal Corporation or the Development Authority and normally there is no provision even for cost
recovery in spite of expenditure having been incurred on betterment of infrastructure in the area except
some states like Goa. The Goa, Daman and Diu Town and Country Planning Act, 1974 provides for
establishment of Development Authorities for urban areas, control on lands and building activity and levy
and collection of contribution for cost recovery of expenditure on schemes for development of infrastructure
in a development area in the city. The Planning and Development Authority has power under the Goa,
Daman and Diu Town and Country Planning Act,1974 to make planning schemes for different areas and to
estimate the costs of the scheme as per provisions of section 86 of the Act and also to collect the costs from
the beneficiary plot owners as Contribution towards costs of scheme under section 88 of the Act. However,
the contribution is limited to cost recovery of the scheme and cannot exceed 1/3rd of the increase in land
value as a result of execution of a scheme. Therefore, the flaw is that in case there is no increase in land
values as a result of execution of the scheme there will be no contribution for cost recovery.
Having this type of uncertain and slippery Tax base is against the principles of having a clear and precise
tax base. No increase in land rates would normally happen either because of liberal policies of the
government in allowing construction of affordable housing by subsidized loans and/or by allowing
more FAR which would cause more burden on infrastructure and civic services needing more funds
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for construction of additional infrastructure. Thus, on the principle that development must pay for
development the beneficiaries must pay for development schemes implemented by the ULBs even if there
is no increase in land values. Therefore, it is suggested that the rates of Betterment Charge leviable by the
Housing Board/Municipal corporation/Development Authority in Chhattisgarh should be made on the lines
of Rajasthan Land and Building Tax which is chargeable @ up to 2% of the market value/circle rates of
lands annually but is being charged @ 0.5% -1% on the market value of lands. Similarly, the Betterment
Charge may be levied on all properties falling in the scheme area except the small plot holders who are the
low-income group in the city, by fixing the minimum fees @10% on the market value of lands as notified for
stamp duty purposes or 50% of increase in land value, whichever is more. That will provide the right kind of
funds for funding the strengthening and augmentation of infrastructure for the city.
6.1.6 Rationale for enacting new provisions for levy of Infrastructure development tax on big residential
properties/complexes and on non-residential properties.
The Goa Infrastructure Tax Act, 2009 provides for levy and collection of Infrastructure Tax from big
residential properties admeasuring 101 square meter and above, commercial and industrial properties for
providing infrastructure like water, electricity, roads, sewerage. The logic is very clear that such development
of new big properties /complexes and commercial complexes/properties create substantial additional
burden on infrastructure and following the American principle that development should pay for development
and old property owners should not be made to pay for them, the new big property owners and the non-
residential ones should pay for their infrastructure requirements of new roads, parking needs, power
requirements and transport needs. Therefore, there is a good case for levy of Infrastructure Development
Tax based on market value of the new properties and not as a contribution for meeting the actual/estimated
costs so as to avoid legal challenges to ‘cost of the scheme’ and also to build some Infrastructure fund for
financing future needs of infrastructure.
The Infrastructure Tax as charged in Goa as given in the schedule can be termed as the Impact Fee for
providing infrastructure for the new development like water, electricity, roads, sewerage, etc. It is levied
under The Goa Infrastructure Tax Act, 2009 on new development at the time of seeking construction
permission. Section 3 of The Goa Infrastructure Tax Act, 2009 provides for the levy of Tax on Infrastructure
on any construction to be undertaken by any person on any land specified in the Schedule. There shall be
levied and paid a tax on infrastructure at the rates specified in the said Schedule. The Government may, by
notification in the Official Gazette, amend any entry in the Schedule and the Schedule shall be deemed to
have been amended accordingly. Therefore, amendment of the rates is not very difficult and does not
require legislative intervention.
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It also states that where a license for construction has already been issued to any person before the
commencement of this Act, the infrastructure tax shall be levied and paid at the time of the renewal of the
construction license or before the issuance of the occupancy certificate/completion certificate, whichever is
earlier, after carrying out assessment of tax through the Competent Authority under this Act. The tax on
infrastructure shall be assessed and collected by the Competent Authority at the time of approving the
construction plan or at the time of issuing construction license.
It also states that where a building proposed to be constructed is on a land earmarked for commercial
use/zone, the rate of tax applicable thereto shall be as applicable to commercial buildings irrespective of its
use. However where a building proposed to be constructed is in a land earmarked for other use or in zone
other than commercial zone, in any plan in force, such as residential or settlement zone, where commercial
utilization of building is done partly on the ground floor or any other floor, the rate of tax applicable to
commercial buildings shall be charged only to the floor area which is used for commercial purpose while for
other area of the building which is used for residential purpose, the rate applicable to residential building
shall be charged while assessing infrastructure tax.
The Infrastructure Act is not in derogation of other laws. Therefore, the provisions of this Act shall be in
addition to the laws governing the building activities, including The Goa Municipalities Act, 1968, The Goa,
Daman and Diu Town and Country Planning Act, 1974, The Goa Panchayat Raj Act, 1994, The City of
Panaji Corporation Act, 2002 and The Goa (Regulation of Land Development and Building Construction)
Act, 2008. However, in order to ensure the primacy of this Act, it is provided that no Local Authority can
issue construction license to any residential building or a commercial building or an industrial building unless
a person applying for the construction license has paid the infrastructure tax due under this Act, in respect
of such building or structure. Also, no person shall start constructing a building unless the tax payable under
this Act, in respect of such building or structure, has been paid. It is also provided that no local authority
shall issue Occupancy Certificate to any building for which the construction license has been issued before
the coming into force of this Act, unless the person applying for it produces a certificate from the competent
authority that the tax due under this Act has been paid and no person shall occupy any building or part
thereof unless the tax payable under this Act in respect of such building or structure has been paid. The
rate of Infrastructure Tax in Goa is Rs.200/- per sqm for residential, Rs.800/- per sqm for commercial and
Rs.250/- per sqm for industrial building or structure.
It is pertinent to note that in Goa there is no nexus between payment of Infrastructure Tax or Impact fee and
the cost or actual expenditure on provision of infrastructure. Therefore, being a Tax and not a fee, it is
slightly different from the Impact fee in USA as it is not charged limited to the cost of the project. The
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Impact fee in USA however is charged on new development to finance incremental expansion of on-site
infrastructure.
Impact fee in Andhra Pradesh is levied in order to mitigate the impacts of construction of commercial
buildings that lead to increased traffic necessitating decongestion measures. This fee is levied for the sites
abutting certain important roads having demand for commercial activity.
6.1.7 Rationale for levy of Infrastructure Development Charge as well as of Infrastructure Augmentation
Charge on change of land use/diversion of land use:
The conversion of agricultural lands into non-agricultural use entails not only increase in market value of
lands which is partly shared by the ULBs by levy of conversion charges, it also entails additional demand of
modern infrastructure and additional burden on civic services requiring additional funds for providing
additional infrastructure. Similarly, permission for conversion of residential lands into commercial user not
only increases the market value of such lands which is again shared as conversion charges by the ULBs
but also results into additional burden on civic services and demand for additional infrastructure. Therefore,
following the principle that development must pay for development, the financial impact of the need for
additional infrastructure generated by the change of land use must be compensated by the beneficiaries of
change of land use .This justifies levy of Infrastructure Development Charge on construction on lands
converted from agricultural to residential use and levy of Infrastructure Augmentation Charge on new
developments which come up on lands converted from residential to commercial user.
The Haryana Development and Regulation of Urban Areas Act, 1975 section 2 (hha) defines "Infrastructure
Development Charges" to include the cost of development of major infrastructure projects and section 2
(hhb) defines "Infrastructure Augmentation Charges" to include the cost of the augmentation of major
infrastructure projects. Section 3 (1) of The Haryana Development and Regulation of Urban Areas Act, 1975
provides that “Any owner desiring to convert his land into a colony shall, unless exempted under section 9,
make an application to the Director, for the grant of license to develop a colony in the prescribed form and
pay for it such fee and conversion charges as may be prescribed. The Haryana Development and
Regulation of Urban Area Rules, 1976 prescribe the rates in Schedule-A and Schedule-B for Infrastructure
Development Charges and Infrastructure Augmentation Charges respectively. For instance, in Faridabad
Complex the development of colonies by colonizers attracts conversion charges for change of land use as
well as payment of Infrastructure Development Charges and Infrastructure Augmentation Charges. The
rates of Infrastructure Development Charges are given in Schedule –A of the Haryana Development and
Regulation of Urban Area Rules, 1976 which are per square meter ranging from Rs.70/- per square
meter in residential category lower potential zone to Rs.500/- per square meter in residential hyper
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potential zone. In case of commercial category, the rates vary from Rs.190/- per square meter to Rs.1000/-
per square meter. Similarly, the rates of Infrastructure Augmentation Charges in Faridabad as given in
schedule – B of the Haryana Development and Regulation of Urban Area Rules, 1976 are between Rs.0.5
lakh per acre to Rs.5 lakh per acre for residential land and between Rs. 2 lakh per acre to Rs. 20 lakh per
acre for commercial land.
These charges are levied and collected at the time of application for license for laying a colony and issuance
of completion certificate. The area-based rates of Infrastructure Development Charge as well as of
Infrastructure Augmentation Charge as presently levied in Faridabad are iniquitous as these are the same
for owners of lands with less market value as well as for those with higher market value of land. Moreover,
these are not buoyant as the same are not designed to keep pace with rise in land value and the need for
buoyancy. Therefore, the rates, if adopted by State of Chhattisgarh, need to be made value based as a
percent of land rate per square meter linked to current land rates. Since the converted lands may fall within
the jurisdiction of the Municipal Corporation or the Development Authority or the Housing Board necessary
amendment for inserting provisions for levy of Infrastructure Development charge as well as of Infrastructure
Augmentation Charge will be required to be made in the three Acts and corresponding Rule and notifications
for fixing the rates.
In Chhattisgarh Rule 8 (1) of The Chhattisgarh Municipal Corporation and Municipalities (Registration of
colonizer, term and conditions) Rules, 2013 captioned “Application for the development of the colony and
permission fee” provides that when a colonizer registered under rule 3 wants to establish any colony and
take up development work, he shall submit an application to the competent authority together with the fee
prescribed under rule 8(2) which is Rs.50000/- per hectare in case of Municipal Corporation having
population of 3 lakh or more and @ Rs.25000/- per hectare in case of Municipal Corporation having
population of less than 3 lakh.
Rule 11 of The Chhattisgarh Municipal Corporation and Municipalities (Registration of colonizer, term and
conditions) Rules, 2013 deals with permission for development work and provides that Permission shall be
granted after fulfilling the following conditions-
a) Out of plots/flats to be developed 15% of plots / 10% of flats shall be reserved for transfer to the
b) Colonizer shall deposit 2% of the estimated cost of internal development cost of the colony as
c) Rupees 100/- per square meter for external development of the colony with the Municipality
d) The rate in (c) relates to 2011 and will increase @5% per year thereafter.
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However, it would be better to levy Infrastructure development charges and Infrastructure augmentation
charges based on market value of land on conversion /diversion of land use for development of a colony.
6.1.8 Rationale for making provision in law for charging Premium on Additional FAR/FSI:
A Betterment levy related Amendment to Jaipur Region Building Regulation 2010 was made as per
Gazette notification dated 20 May 2011 and Additional FAR over and above standard FAR in case of flats
will be sanctioned on payment of betterment levy of Rs.100/- per square feet or 25% of residential land rate,
whichever is more. In case of group housing standard FAR of 1.33 could be exceeded up to 2.25 on payment
of betterment levy @ Rs.100/- per square feet or 25% of land rates, whichever is more. Additional coverage
can be allowed up to 5% on payment of betterment levy on the additional covered area at the same rates.
If the height of the building is more than 30-meter betterment levy @ of Rs.300/- per square feet or 25% of
residential land rates, whichever is more, will be payable on the covered area in the additional height. In
case of commercial use which can be allowed up to 3% of the covered area in group housing, betterment
levy on the commercial use area will be 40% of residential land rate. In case of commercial properties, the
additional covered area will attract betterment levy @ of Rs.200/- per square feet or 25% of reserved land
rate for commercial lands, whichever is more.
The betterment levy in case of additional FAR over and above standard FAR will be a per table below-
Additional FAR above 2.25 For Residential/ Institutional premises For Commercial premises
0-1 Betterment levy 30% of residential reserve Betterment levy 30% of
land rate commercial reserve land rate
1-2 Betterment levy 35% of residential reserve Betterment levy 30% of
More than 2 Betterment levy 50% of residential reserve Betterment levy 30% of
Note: In case of Hotels the betterment levy rates will apply in case the FAR is above 3.
Betterment charges for allowing extra FAR were further amended under Jaipur Region Building Regulation 2012
vide Gazette notification dated 07.12.2012 amending Jaipur Region Building Regulations 2010. A New provision
made in para 8.10(8) FAR provided that for more than standard FAR, Betterment Charge will be payable as per
table below:
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0-1 30% betterment levy (On residential 30% betterment levy (On
reserve price) commercial reserve price)
1-1.15 35% betterment levy (On residential 35% betterment levy (On
More than 1.15 50% betterment levy (On residential 50% betterment levy (On
A further Amendment was made as per Gazette notification dated 2 August 2013 as under-
On roads 24m - 30m wide for 30% of reserved residential land rate 30% of reserved commercial
additional FAR up to 0.5 land rate
additional FAR 0.5-1 land rate
additional FAR up to 1-1.5 land rate
On roads more than 60m 50% of reserved residential land rate 50% of reserved commercial
wide for additional FAR land rate
above1.5
Premium on additional FSI has been used as a fiscal tool in Maharashtra in 2008 when the State
Government proposed in the Budget to allow additional FSI of 0.33 in the suburbs of Mumbai by charging
‘premium’ linked to ‘Ready Reckoner’ rates. The revenues were to be shared in equal proportion between
the State Government and the Municipal Corporation of Greater Mumbai. The scarcity of development rights
created by constrained FSI Regulations was sought to be exploited by turning it into a fiscal tool. However,
charging of such premium was struck down by Mumbai High Court as ultravires in Writ Petition Number
2443 of 2008 wherein the Honorable High court held that “Section 22 which falls under Chapter III and which
requires what must be the contents of the development Plan, does not expressly confer any power on the
state government or the planning Authority to make a provision for imposing a fee whether regulatory or
compensatory…..Once the legislature has provided for development charge under provisions of Section
124 A, which charge has to be kept in a separate fund to be used for providing amenities, it is not open for
the state or the Planning Authority to contend that under the guise of giving grant of additional FSI of 0.33
they are entitled to a charge or a fee for the purpose of providing amenities. The Respondents /state
Government has not been able to show any provision in the MRTP Act expressly / specifically
authorizing any levy of such premium based on the ready Reckoner value of land per sq. meter
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“Since there was no legal provision in the MRTP Act for charging any premium on permitting additional FSI,
amendment to the MRTP Act 1966 was therefore brought by inserting provision for imposition of fees,
charges and premium for grant of additional FSI or for special permission or for use of discretionary powers
under the development control legislation. Maharashtra had to go for Amendment of section 14 by inserting
new sub-section (l) at the end of the section as under-
In Section 14 of the principal Act, after clause (k), the following clause shall be added, namely: -
“(l) Provisions for permission to be granted for controlling and regulating the use and development of land
within the jurisdiction of a local authority or the Collector, as the case may be, including imposition of fees,
charges and premium, at such rate as may be fixed by the State Government or the Planning Authority,
from time to time, for grant of an additional Floor Space Index or for the special permissions or for the use
of discretionary powers under the relevant Development Control Regulations, and also for imposition of
conditions and restrictions in regard to the open space to be maintained about buildings, the percentage of
building area for a plot, the location, number, size, height, number of storeys and character of buildings and
density of population allowed in a specified area, the use and purposes to which buildings or specified areas
of land may or may not be appropriated, the sub-division of plots, the discontinuance of objectionable users
of land in any area in reasonable periods, parking space and loading and unloading space for any building
and the sizes of projections and advertisement signs and hoardings and other matters as may be considered
necessary for carrying out the objects of this Act”.
In the case of Ahmedabad Urban Development Authority vs. S.J. Pasawalia, the Supreme Court upheld a
Gujarat High Court judgment where it had been held that in the absence of any express/specific provision
in the Gujarat Town Planning & Urban Development Act authorizing the levy of a development charge on
plot holders who carried out any development/ construction, regulations framed by the Ahmedabad Urban
Development Authority purporting to levy a development charge were illegal. Both the High Court and the
Supreme Court negated the contention that even in the absence of any specific provision, a power to recover
a fee for the purpose of development of the area in question and for implementing schemes of development,
could be implied in the Act as being incidental or ancillary to carrying on the functions for which the
Development Authority had been constituted under the Town Planning Act. The Supreme Court held "in a
fiscal matter it will not be proper to hold that even in the absence of express provision; a delegated authority
can impose a fee or a tax. In our view, such power of imposition of tax and/or a fee by a delegated authority
must be very specific and there is no scope for implied authority for imposition of such tax or fee. It appears
to us that the delegated authority must act strictly within the parameters of the authority delegated to it under
the Act and it will not be proper to bring the theory of implied intent or the concept of incidental and ancillary
power in the matter of exercise of fiscal power.”
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In Chennai, the Chennai Metropolitan Development Authority has made provision for collection of charges
for award of premium FSI in the Development Control Regulations, but The Tamil Nadu Town and Country
Planning Act 1971 does not have explicit provisions for levy of any charges for award of additional FSI.
Similar is the position in Karnataka Zonal Regulations of Mangalore 2011 and also in Gujarat General
Development Control Regulations where additional FSI may be permitted on payment of premium or
additional Infrastructure Charge. However, in the absence of explicit provision for levy of a premium or
charge as a tax in the Town and Country Planning Act the legality of the charges is doubtful.
Charging premium for additional FSI is emerging as a popular VCF tool. However, in Chhattisgarh there is
no provision in any Act for charging any premium or fees for grant of any additional FSI. Section 24A of the
Chhattisgarh Nagar Tatha Gram Nivesh Adhiniyam, 1973 provides for construction of an additional floor in
a residential building stating that “where under the provisions of this Act or rules made there under or any
other law enacted under entry 5 of the State List of the Seventh Schedule to the Constitution of India for the
time being in force, regulating the constructions of residential building or any rules or regulations or bye-
laws made there under it is permissible to construct less than three floors then notwithstanding anything
contained in the Act or the law or the rules or the regulations or the bye-laws aforesaid it shall be permissible
to construct an additional floor in such residential building subject to sanction of a plan of such construction
under the aforesaid Act or law, as the case may be”. However, there is no provision for charging any fee on
sanction of an additional floor.
Section 358 of The Chhattisgarh Municipal Act,1961 confers Power on the Municipality to make bye-laws
governing height of buildings; the number and height of storey's composing a building and height of rooms
and the dimensions of rooms intended for human habitation; and the height and slope of the roof above the
uppermost floor but nowhere the power to levy fees or charges for allowing additional height has been
conferred on the state government or any authority.
The position in Bilaspur is similar as there is no provision for charging any premium or fees or betterment
levy for grant of any additional FSI in the Bilaspur Development Authority Act, 1982 although the
Development Authority has power to regulate the location, height, number of storey and size of buildings
and other structures. Therefore, it is necessary to amend the law and make provision for levy of premium
or charge or betterment levy for grant of additional FSI by inserting provisions in section 68 of the Bilaspur
Development Authority Act 1982, similar to the one inserted by Maharashtra into Section 14(1) of the MRTP
Act 1966 as under: -
“Provisions for permission to be granted for controlling and regulating the use and development of
land within the jurisdiction of a local authority or the Collector, as the case may be, including
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imposition of fees, charges, betterment levy and premium, at such rate as may be fixed by Regulations
by the State Government or the Planning Authority, from time to time, for grant of an additional Floor
Space Index or for the special permissions or for the use of discretionary powers under the relevant
Development Control Regulations.”
6.1.9 Rationale for levy of Certain Fee/Charges in Chhattisgarh levied by the State Government in
Rajasthan
(i) Certification of Ownership Application Fee

The Rajasthan Urban Land (Certification of Titles) Bill, 2016 has an objective to providing clear land title to
urban lands - a step towards good governance and increase the Ease of Doing Business. The Rajasthan
Assembly passed the Rajasthan Urban Land (Certification of Titles) Bill, 2016 on 5th April 2016. With this,
Rajasthan also became the first state to bring and pass Rajasthan Urban Land (Certification of Titles) Bill,
2016.
State residents can now seek a certificate of ownership of their lands by paying a nominal fee to the state
government. The state government will set up an authority which will seek all the documents from the
landowners and will verify it against records held by the state. The authority will issue a certificate and a
map to the owner for property with state guarantee. Currently, it is kept voluntary for the owners to apply for
this certificate. The state government has kept the application fee of 0.5% of the land rate determined by a
district level committee to encourage more people to join this new scheme. Through the Bill the state
government has given itself the power to enter into any property or premise for the purpose of survey by
giving its owner a prior notice. Experts believe that this Bill will give a clear title to the owner and will reduce
litigations in the courts. This is seen as one of the key steps towards land reforms and Rajasthan has
become the first state to introduce in the country.
(ii) Development under Land Pooling Bill

The Rajasthan Land Pooling Scheme Bill provides for easy aggregation of small land parcels to undertake
urban development, revenue from which can then be generated through user fee/taxes. This Act will
facilitate acquisition of small land parcels for bigger infrastructure projects. In many big-ticket projects,
fragmented land holdings often prove to be tricky in terms of acquisition thereby also affecting the projects.
According to this law, if land owners decide to give up their properties, they would get a proportional share
in the developed land, thereby stimulating easier acquisition. This law has been primarily meant for the
development of the infrastructure & investment promotion regions. The biggest advantage of this law would
be that it will speed up development works and simultaneously would create a fare advantage for
those who own the properties, where the project would have to be set up. This will help in developing
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infrastructure as per the master plan. The land required for development will be shared by all the land
owners in the area. People in the area will contribute land and in return will get developed land in the same
proportion. In order to ensure justified acquisition of land, the government will allocate land close to where
it has been taken from, as far as possible. According to the law, land owners will get up to 55 per cent of
the developed land from the authority. Post development, it could be said that the value of their returned
land will be much more than the original value of their entire land & hence it can be a win-win situation for
all the stakeholders involved.
The allocation of land from the total area covered under the scheme include (i) fifteen percent for parks,
playgrounds, garden and open spaces and social infrastructure such as schools, dispensary, fire brigade,
community facilities, and public utility; (ii) fifteen percent for roads; and (iii) fifteen percent for sale by
appropriate authority for residential, commercial or industrial use depending on the nature of development
including minimum 5% for Economically Weaker Sections and Lower Income Group housing. Provided that
the percentage of the allocation of land may be altered depending upon the nature of development and for
the reasons to be recorded in writing. The proceeds from the sale of land referred to in (iii) above shall be
used for the purpose of providing infrastructure facilities.
(iii) Contribution from plots in land pooling scheme
Chapter 3 - Control of Development and Use of Land provides under section 14 of The Rajasthan Land
Pooling Scheme Bill for Restrictions on development after publication of declaration of intention of land
pooling scheme.- (1) On or after the date on which a declaration of intention of land pooling scheme is
published in the Official Gazette under section 4 in respect to any area, no person shall carry out any
development in any building or in or over any land, within the limits of the said area without the permission
in writing of the appropriate authority and without obtaining certificate from it to the effect that development
charge, scrutiny fees or any other fee leviable under this Act has been paid or that no such charge is leviable.
Section 15 of The Rajasthan Land Pooling Scheme Bill -. Application of permission for development - (1)
Any person, intending to carry out any development in any building or in or over any land after the publication
of intention of land pooling scheme shall make an application in writing to the appropriate authority for
permission for such development in such form and containing such particulars and accompanied by such
documents as may be prescribed. (2) Every application under sub-section (1) shall be accompanied by such
fee as may be prescribed. (3) On an application having been duly made under subsection (1) and on
payment of the development charge or betterment charges or any other charges, if any, as may be
assessed, the appropriate authority with the approval of the Land Pooling Officer appointed under section
21 of The Rajasthan Land Pooling Scheme Bill may- (i) pass an order- (a) granting permission
unconditionally; or (b) granting permission subject to such conditions as it may think necessary to
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impose; or (c) refusing permission. (4) The appropriate authority in considering the application for
permission shall ensure that it is in conformity with the provisions of the land pooling scheme prepared or
under preparation under this Act and where the development or any modification is likely in the opinion of
the appropriate authority to interfere with the operation of the land pooling scheme or to be prejudicial to
planned development, or any plan of the local authority, the appropriate authority may refuse such
permission
Section 23 of The Rajasthan Land Pooling Scheme Bill provides the Contents of preliminary and final
scheme.- (4) In the final scheme, the Land Pooling Officer shall - (i) fix the difference between the total of
the values of the original plots and the total of the values of the plots included in the scheme in accordance
with the clause (vi) of sub-section (1) of section 41; (ii) determine whether the areas used, allotted or
earmarked for a public purpose or purposes of the appropriate authority are beneficial wholly or partly to
the owners or residents within the area of the scheme; (iii) estimate the portion of the sums payable as
compensation on each plot used, allotted or earmarked for a public purpose or for the purpose of the
appropriate authority which is beneficial partly to the owners or residents within the area of the scheme and
partly to the general public, which shall be included in the costs of the scheme; (iv) calculate the contribution
to be levied under subsection (1) of section 43 of The Rajasthan Land Pooling Scheme Bill, on each plot
used, allotted or earmarked for a public purpose or for the purpose of the appropriate authority which is
beneficial partly to the owners or residents within the area of the scheme and partly to the general public;
(v) determine the amount of exemption, if any, from the payment of contribution that may be granted in
respect of plots exclusively occupied for religious or charitable purposes; (vi) estimate the increment to
accrue in respect of each plot included in the scheme in accordance with the provisions of section 42; (vii)
calculate the proportion of the contribution to be levied on each plot in the final scheme to the increment
estimated to accrue in respect of such plot under sub-section (1) of section 43 of The Rajasthan Land
Pooling Scheme Bill; (viii) calculate the contribution to be levied on each plot included in the final scheme;
(ix) determine the amount to be deducted from, or added to, as the case may be, the contribution leviable
from a person in accordance with the provisions of section 43 of The Rajasthan Land Pooling Scheme Bill;
(x) estimate with reference to claims made before him, after notice has been given by him in the prescribed
manner and in the prescribed form, the compensation to be paid to the owner of any property or right
injuriously affected by the making of the land pooling scheme in accordance with the provisions of section
46, (5) The Land Pooling Officer shall draw in the prescribed form the preliminary and the final scheme in
accordance with the draft scheme:
Section 42 of The Rajasthan Land Pooling Scheme Bill gives the method of Calculation of increment.- For
the purposes of this Act, the increments shall be deemed to be the amount by which, at the date of
the declaration of intention to make a scheme, the market value of the plot included in the final
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scheme estimated on the assumption that the scheme has been completed, would exceed at the same date
the market value of the same plot estimated without reference to improvements contemplated in the
scheme: Provided that in estimating such value, the value of buildings or other works erected or in the
course of erection on such plot shall not be taken into consideration. Section 43 of The Rajasthan Land
Pooling Scheme Bill. Contribution towards costs of scheme.- (1) The costs of the scheme shall be met
wholly or in part by a contribution to be levied by the appropriate authority on each plot included in the final
scheme calculated in proportion to the increment which is estimated to accrue in respect of such plot by the
Land Pooling Officer: Provided that- (i) (a) where the cost of the scheme does not exceed half the increment,
the cost shall be met wholly by a contribution, and (b) where it exceeds half the increment, to the extent of
half the increment it shall be met by a contribution and the excess shall be borne by the appropriate
authority;
Section 52 of The Rajasthan Land Pooling Scheme Bill empowers and gives Power of appropriate authority
to make agreement.- (1) The appropriate authority shall be competent to make any agreement with any
person in respect of any matter which is to be provided for in a land pooling scheme, subject to the power
of the State Government to modify or disallow such agreement and unless it is otherwise expressly provided
therein, such agreement shall take effect on and after the day on which the land pooling scheme comes
into force
6.1.10 Rationale for levy of Land and Building Tax on the market value of lands and buildings in
Chhattisgarh as levied by the Municipal Corporations in Rajasthan.
The Rajasthan Lands and Buildings Tax Act, 1964 is an Act to provide for the levy of a tax on land and
buildings in urban areas of the State of Rajasthan. Section 3 – Levy of Lands and Buildings Tax: (1) With
effect on and from 1st April 1973, for each year, the State Government shall levy and collect a tax on lands
and buildings situated in an urban area (hereinafter referred to as Lands and Buildings Tax), from the owner
of such lands and buildings, at such rate not exceeding 2% of the market value thereof as the State
Government may, by notification in the Official Gazette declare in this behalf. However, the State
Government may fix graduated rates of tax on different slabs of market values of urban lands and buildings:
But until a notification declaring rate of tax is issued under this sub-section, the rate of tax on lands and
buildings shall be as follows: -
On the first Rs. 1, 00,000/- of the market value Nil

of the land and building.
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On the next Rs. 2, 00,000/- of the market value ½%

On the next Rs. 7, 00,000/- of the market value 1%
On the balance of the market value of the land 1½%
and building in excess of Rs. 10,00,000/-
Provided further that with effect on and from [the date of commencement of the Rajasthan Lands and
Buildings Tax (Amendment) Act, 1995 (Act No. 14 of 1995)] no tax shall be levied and collected on lands
and buildings situate in an urban area having a population of less than [one and a half lakh according to the
latest census figures. Provided further that if any area is declared a cantonment, or is constituted a
Municipality, after the commencement of the Rajasthan Urban Land Tax (Amendment) Act, 1973, the tax
on lands and buildings situate in such area shall be levied and collected with effect from the commencement
of the year following the year during which the area is declared a cantonment or is constituted a Municipality.
It is suggested that the Land and Building Tax may be levied in Chhattisgarh on the lines of Rajasthan. The
rates of tax may be 1% of the market value of lands per year and the collections from the Land and Building
Tax put in a separate Bank account and reserved for infrastructure development in the city. As per census
2011 the population of Bilaspur was about 3.65 lakh. The estimated number of properties in Bilaspur is
60000. If the smaller plots, say, smaller than 200 square meters estimated to be 12000 are excluded, from
the levy of Land and Building Tax and estimate average size of the balance taxable plots numbering 48000
to be 200 square meters each and the average market price of land to be Rs.20000/- per square meter (the
minimum being Rs.13000/- per square meter and going up to Rs.45000/- per square meter) an average plot
of 200 square meters would be values at Rs. 4000000/- and the annual Land and Building Tax for each
property @ 1% of the market value would come to Rs 40000/-. Thus, collection of Rs. 192 crores from the
levy of Land and Building Tax from 48000 properties can be envisaged.
6.2 Proposed amendments
Broadly the following amendments/changes need to be made in the various Acts /Rules/Schedules in
Chhattisgarh.
• Rates of fees for land development/building plan sanction to be made market value of land-based
instead of area based
• Rates of diversion of land use/conversion charges to be amended from area based to land
value based as a percentage of market value on the lines of Mumbai.
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• Rates of betterment charges to be amended with provision for some minimum charges regardless
of nominal increase or no increase in land value.
• Conversion charges on change of land use from residential to commercial / industrial in urban areas
to be levied in Chhattisgarh and made land value based on the lines of Mumbai.
• Chhattisgarh laws to be amended to add provision for charging betterment levy on grant of additional
FAR on the lines of Rajasthan.
• Insertion of new provisions in the Chhattisgarh Municipal Act and the Development Act for charging
Infrastructure Development charge and Infrastructure Augmentation charge in addition to land use
diversion fee/conversion charges on the lines of Faridabad.
• Insertion of new provisions for allowing land pooling and charging fees for making application for
land pooling and for charging contribution from beneficiaries of land pooling plots.
• Insertion of new provisions for land titling and land title certificates on payment of fee.
• Enactment of new law for levy of Land and Building Tax on the lines of Rajasthan.
6.3 Acts/sections/Rules/Bye-laws /Notifications to be amended
6.3.1 Amendment of Section 187A of The Chhattisgarh Municipalities Act. 1961
Section 187A - Compounding of offences of construction of buildings without permission, (1)

Notwithstanding anything contained in this Act or any other Act for the time being in force or any rules or
byelaws made there under, the offence of constructing buildings without permission or contrary to the
permission granted may be compounded, provided that in compounding the cases, fees shall be charged,
as under in respect of the area of unauthorized construction on the basis of the rate of sale of land
determined by the Collector of Stamps for the area concerned:--
Provided further that the compounding shall be made in case of residential construction by the Chief
Municipal Officer and in case of non-residential construction with the permission of President-in-Council.
This section may be amended to include all compoundable deviations in erection of buildings and
sanction/ regularization of additional FAR.
6.3.2 Amendment of Section 339B of the Chhattisgarh Municipalities Act. 1961
Section 339B - Development of Colonies

(1) The Registration Certificate granted under Sections 339-A shall entitle the colonizer to undertake the
development of one or more colonies in the Municipal area or the Nagar Panchayat area, as
the case may be, subject to the provisions of this Act, and on the following conditions: --
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(a) in every residential colony in the Municipal Council or Nagar Panchayat area, out of the total
area fifteen percent of the land shall have to be transferred by the colonizer to the Chief
Municipal Officer for economically weaker sections on such terms and in such manner
as may be prescribed;
(b) in respect of land on which the Urban Land (Ceiling and Regulation) Act, 1976 was applicable,
the colonizer shall have to transfer land to the Chief Municipal Officer as required under
clause (a);
(c) where the colony is proposed on a small piece of land the area of which is less than one acre,
such colonizer who does not wish to provide land for economically weaker sections as
required in clause (a) shall deposit into the "Service to Poor Fund" of the Municipal Council
or the Nagar Panchyat area, as the case may be, opened in terms of Section 117-A, fee at
such rate as may be prescribed.
(2) In addition to transferring land for economically weaker sections under sub-section (1), the colonizer
shall also reserve at least ten percent fully developed plots of the prescribed size or in alternate offer,
constructed houses/flats of the prescribed size in his residential colony for sale to persons belonging
to lower income group on terms as may be prescribed.
(3) For sale of houses to the economically weaker sections and the lower income group, the procedure
for selection of eligible persons and the determination of the cost of such plots or houses shall be as
may be prescribed by the Government.
(4) Permission to develop colony shall be given by the Chief Municipal Officer and appeal against any
order of the Chief Municipal Officer shall lie before the Government.
The above conditions may be amended by adding further conditions as these do not include a
condition to pay Infrastructure Development Charges in case of new development and Infrastructure
Augmentation Charges in case of addition to the existing infrastructure of an existing colony.
of colonizer, term and conditions) Rules, 2013.
Rule 8- Application for the development of the colony and permission fee - (1) When a colonizer
registered under rule 3 wants to establish any colony and take up development work, he shall submit an
application to the competent authority together with the fee prescribed under rule 8(2) as under-

a Municipal corporation having population of 3 Lakh or more Rs.50000/-per hectare
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b Municipal corporation having population of less than 3 Rs.25000//-per hectare
Lakh
c Municipal councils Rs.10000//-per hectare
d Nagar palikas Rs.50000//-per hectare
The fee prescribed for development of a colony is area based and should be amended and made
land value based.
of colonizer, term and conditions) Rules, 2013
Rule 11 - Permission for development work. Permission shall be granted after fulfilling the following
conditions-
(a) Out of plots/flats to be developed 15% of plots/10% of flats shall be reserved for transfer to the
(b) Colonizer shall deposit 2% of the estimated cost of internal development cost of the colony as
(c) Rupees 100//- per square metre for external development of the colony with the Municipality
(d) The rate in (iii) relates to 2011 and will increase @5% per year thereafter.
This Rule may be amended to make the Rates of external development charges land value based
and should include rates of Infrastructure development charge and Infrastructure Augmentation
charge at (v) and (vi) based on market value of land as in case of compounding fee for regularization
of unauthorized construction.
6.3.5 Amendment in section 349 of the Chhattisgarh Municipalities Act, 1961
Section 349 of The Chhattisgarh Municipalities Act. 1961- Fees for licenses and permissions. The
Council may charge such fee as may be prescribed by bye-laws for--
a) any license granted under this Act;
b) any permission granted under this Act
This section may be amended to include -

c) Sanction of additional FAR
d) Land pooling application fee
e) Contribution by final plot holders in a land pooling scheme
f) Land title certification fee
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6.3.6 Amendment of Section 163-A of The Chhattisgarh Municipal Corporation Act, 1956.
Section 163-A - Creation of Infrastructure Development Fund. -

1. Notwithstanding anything contained in this Act or any other Act for the time being in force, the State
Government may create an Infrastructure Development Fund with a view to assist the Municipal Corporation
in developing the infrastructure. 2. The sources of the infrastructure fund and the procedure and manner in
which the amount from the fund shall be provided to Municipal Corporation shall be such as may be
prescribed.
This section may be amended to include the collections from Infrastructure development charges
and Infrastructure Augmentation charges
6.3.7 Amendment of Section 308-B of the Chhattisgarh Municipal Corporation Act, 1956.
Section 308-B -Relaxation in Compounding the unauthorized construction. - (1) Notwithstanding

anything contained in Section 308-A or any other provisions of this Act or any other law for the time being
in force , the Commissioner may, on the application made in this behalf by order, compound the cases
involving deviations from the approved plan or map, or construction made without permission by collecting
compounding fee at such rate as may be determined by the State Government.
This section may be amended to include compounding of deviations in erection of buildings and
sanction of additional FAR.
6.3.8 Amendment of Rule 12 of The Chhattisgarh Nagar Tatha Gram Nivesh, Niyam, 1975.
Section 29 of The Chhattisgarh Nagar Tatha Gram Nivesh Adhiniyam, 1973 - Application for permission for
development by others provides under sub-section 29 (2) that Such application for permission for
development shall also be accompanied by such fee as may be prescribed.
For prescribing the fee Section 85 of The Chhattisgarh Nagar Tatha Gram Nivesh Adhiniyam, 1973 confers
Powers to make rules on The State Government which may, after previous publication, make rules for
carrying out the purposes of this Act and In particular and without prejudice to the generality of the foregoing
power, such rules may provide for the fee which shall be accompanied with the application under Section
29 (2).Accordingly The Chhattisgarh Nagar Tatha Gram Nivesh, Niyam, 1975 were framed.
Rule 12 of The Chhattisgarh Nagar Tatha Gram Nivesh, Niyam, 1975 provides that - (A) Any person not
being the Union Government, State Government, or Local Authority, special authority shall apply
under the sub-section (1) of section 20 in Form VII for permission for development of land and in
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Form VIII for development of land along with the schedule and specification sheet attached with the
application form.
(B) Fees. – Every application submitted under sub-section (2) of section 29 shall be accompanied by a fee
specified below: -
(a) For the development of land other than erection of a building Rs. 50 per acre or part thereof.
(b) For building operation.
Serial Area Rate of Fee For Rate of fee for

No. Ground Floor subsequent storey
1 2 3 4
i For a ground floor area up to 1200 sq.ft Rs.20/- Rs.15/-per storey
ii For a ground floor area of more than 1200 sq.ft. Rs.25/- Rs.20/-per storey
but not exceeding 3000 sq.ft.
iii For a ground floor area of more than 3000 sq.ft. Rs.50/- Rs.40/-per storey
but not exceeding 6000 sq.ft.
iv For a ground floor area more than 6000 sq.ft. & Rs.75/- Rs.50/-per storey
above.
The rates are area based which may be amended and made market value of land based.
6.3.9 Amendment of Section 59 of The Chhattisgarh Nagar Tatha Gram Nivesh Adhiniyam, 1973
Section 59 of The Chhattisgarh Nagar Tatha Gram Nivesh Adhiniyam, 1973 provides for levy of
Development charges. Section 59 (1) states that Where as a result of the implementation of town
development scheme, there is, in the opinion of the Town and Country Development Authority, as
appreciation in the market values of lands adjacent to and affected by a scheme the Town and Country
Development Authority may, in lieu of providing for the acquisition of such land, levy development charges
on owners of such land. Sub-section 59(2) lays down the rate for levying development charges. It states
that The development charges shall be an amount equal to not less than one-fourth and not more than
one-third of the difference between the value of the land on the date of publication of the intention to prepare
the town development scheme and the date of completion of the scheme.
Levy of Development charges under Section 59 (1) is dependent upon incurring of expenditure on
development of an area so that as a result of the implementation of town development scheme the
value of land increases. However it has not been envisaged that in some years there may be no
increase in land values for various reasons in spite of investment of substantial funds by the
state on development of an area, In such cases even the cost recovery of the expenditure
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incurred by the state may not be possible leaving the state /ULB without funds for continuing the
development works for the citizens .Therefore provision may be made in section 59 for charging
the cost of the scheme spread over the beneficiary properties/area as the minimum levy of
development charge and the share of ½ or 1/3 of the increment in land values may be kept as the
upper limit.
6.3.10 Amendment of Rule 21(3) of The Chhattisgarh Bhumi Vikas Rule, 1984
Rule 21. Fees - (1) Validity of Notice subject to payment of Fees-No notice as referred to in rule l6 shall be
deemed valid unless the person giving notice has paid the fees for the time being in force to the Authority
and an attested copy of the receipt of such payment is attached with the notice. (2) In case the authority
after processing the application of building permit, the building permission/development. (3) Scale of Fee.-
The scale of fee shall be as under:-
A For permission for development Fee
(i) For development of area up to I hectare Rs. 2500/-
(ii) For development of area exceeding I hectare but not exceeding 2.5 Rs. 5000/-
hectare
(iii) For development of area 'exceeding 2.5 hectare but not exceeding 5 Rs. 10000/-
hectare
(iv) For development of area exceeding 5 hectare for every hectare or part additional fee at Rs.
thereof 2500/-
1 A building intended to be exclusively for 0 75 500
residence 76 125 875
126 200 1500
201 300 2250
301 400 3000
401 600 5000
601 750 6250
751 1000 8750
l00l 1250 12500
l25l 1500 I7500
l50l 2000 25000
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Final Report
2001 2500 37500

2500 Above 37500 and l5 per
square meter for
additional fees
store house, factory or for carrying or charge of 50% of such amount of fees, except that for a
trade or business or any other built-up area above 2500 square meter the fees chargeable
commercial or industrial purpose. shall be Rs. 15/- per square metres for additional fees.
5 A building intended to be used as Up to 800 seating capacity @ Rs. 15,000/-;
cinema theatre. Above 800 seating capacity @ Rs. 25,000/-
6 A building intended to be used for any 50% of fees specified in item No. 4
social charitable culture, educational
purposes, Dharmshala and similar
types of building and for any other
purpose not specifically provided for.
7 Addition or alteration with built up area Rs. 100/- in each case of building mentioned in item 1, 3
or external addition or alteration which and 6 Rs. 500/- in each case of building mentioned in item
does not add to the built-up area such No. 2. 4 and 5.
as Court yard compound N-4 wall,
alteration in elevation or roofing such
tiles to A.C. Sheet or flat surface,
additional opening or closing not
covered by proviso to sub-rule (l) of
Rule 14.
8 ln case of addition alteration in the Up to 5% Nil. above 5% to 10% - Rs. 125/-. Above I0% fresh
proposed plan. application according to the rule shall be necessary
9 Revaluation of the building permission l0% of the amount of fees charged originally in respect of
the building
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Final Report
S.No. C. For permission for high-rise building

Type of construction Fees chargeable in Rupees
1 A building intended to be exclusively for residence. Rs. 25/- per square meter floor area
space.
2 A building intended to be used as shop, store, house, Fees prescribed in item no. 1 with
factory or for carrying on trade or business or any other additional charges of 100% of amount of
commercial or industrial purpose. fees.
3 A building intended to be used as administrative block in Fees as prescribed in item no. 1
a factory.
4 A building intended to be used for shop cum- residence Fees specified in item no. 1 together with
purposes. additional charges of 50% of such amount
of fees.
5 A building intended to be used for any special, charitable, 50% of fees specified for item no. 1
cultural, educational purposes, including hospital,
school, club, Dharmshala and similar types of building
and for any other purpose not specifically provided for.
S.No. D. Fees for the permission of development of Integrated Township

Name of Planning / Special Area Fees
1 Raipur, Naya Raipur Rs. 200 per sq. rneter
2 Bilaspur, Korba, Bhilai Rs. 150 per sq. meter
3 Other Planning & Special Area Rs. 100 per sq. Meter
The scale of fees is area based per hectare /per square meter which may be made land value based.
6.3.11 Amendment of Rule 95 of The Chhattisgarh Bhumi Vikas Rules, 1984
Rule 95 of The Chhattisgarh Bhumi Vikas Rules, 1984 contains the Power of relaxation given to the
Director of Town and Country Planning, Government of Chhattisgarh who may permit special relaxation to
any of the rules, provided the relaxation sought does not violate the health safety, fire safety. structural
safety, public safety of the inhabitants and the building and neighborhood.
However, Rule 95 of The Chhattisgarh Bhumi Vikas Rules 1984 does not empower the Director to
charge any fees for granting the relaxation which may be added by amending this Rule.
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Final Report
6.3.12 Amendment of section 258 of The Chhattisgarh Land Revenue Code, 1959 regarding premium on
diversion of land use.
Section 59 (5) of The Chhattisgarh Land Revenue Code, 1959 provides that where land for use for any
purpose is diverted to any other purpose and land revenue is assessed thereon under the provisions of
this section, the competent authority shall also have power to impose a premium on the diversion in
accordance with rules made under the Land Revenue code,1959.
Section 258 of The Chhattisgarh Land Revenue Code, 1959 provides for the General rule making power of
the state Government. Section 258(1) empowers the state government to make rules generally for the
purpose of carrying into effect the provisions of this code and sub-section 258(2) further lays down that in
particular and without prejudice to the generality of the foregoing powers such rules may provide for (iii)
regulation of assessment of land revenue on diversion of land to other purposes and imposition of premium
under section 59; (iv) diversion of survey numbers into sub-divisions and apportionment of the assessment
of survey number among the sub-divisions of a survey number under section 70; (xiv) the manner of dividing
plot numbers into sub-divisions and apportioning the assessment of plot number among ,the sub-divisions;
and the limits either of area or of land revenue or both in any local area for recognition of sub-divisions
under section 94.
However, this section does not provide for the power to levy any premium or fees on (vi) – diversion
of survey numbers into sub-division. Also it does not provide for allowing amalgamation of plots
and for charging premium or fees for allowing amalgamation of plots. Therefore, in order to do all
that section 258 may be amended accordingly
6.3.13 Amendment of Rule 14 of the Rules regarding Alteration of Assessment and Imposition of premium
for the purpose of levy of premium on Agricultural land.
Rule 14 (1) - For the purpose of levy of premium of agricultural land other than the land specified in the
proviso to sub-section (5) of section 59 of the code diverted to non-agricultural purposes, in any town and
village in the state of Chhattisgarh shall be divided into the following classes as shown in column (1) of
schedule-A appended to these Rules and the premium shall be imposed according to the rates specified in
column (2), (3), (4), (5), (6) and (7) of the said Schedule.
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Final Report
Schedule-A
purpose Unit/ or Industrial Institutional Facility
Colony/ Purpose Purpose
Project
Municipal Rs.15/-per Rs.20/-per Rs.25/-per Rs.20/-per Rs.20/- Rs.15/-
Corporation sqm. sqm sqm sqm per sqm per sqm
and Nagar
Palika area
5 km within Rs.10/-per Rs.15/-per Rs.20/-per Rs.15/-per Rs.15/- Rs.10/-
Municipal sqm sqm. sqm sqm per sqm per sqm
Corporation
and Nagar
Palika area
The above schedule of rates of premium is clearly area based per square meter and may be amended
on land value basis.
6.3.14 Amendment of Section 51 of the Chhattisgarh Griha Nirman Mandal Adhiniyam, 1972 relating to
Betterment charges.
Section 51 CHAPTER XI - Assessment and Recovery of Betterment Charges.

Betterment charges - (1) When by making of housing scheme any land in the area comprised in the scheme
will in the opinion of the Board be increase in value, the Board in framing the scheme may declare that
betterment charges shall be payable by the owner of the land or any person having an interest therein in
respect of the increase in value of land from the execution of the scheme. (2) Such increase in value shall
be the amount by which the value of the land on the completion of the execution of the housing scheme,
estimated as if the land were clear of the buildings exceeds the value of the land prior to the execution of
the scheme estimated in like manner and the betterment charges shall be one half of such increase in
value.
Levy of Betterment charges by the Housing Board under Section 51 is dependent upon incurring of
expenditure on betterment of an area so that as a result of the implementation of town development
scheme the value of land increases. However it has not been envisaged that in some years there
may be no increase in land values for various reasons in spite of investment of substantial funds
by the Housing Board on development of an area, In such cases even the cost recovery of the
expenditure incurred by the Housing Board may not be possible leaving the Housing Board
without funds for continuing the development works for the citizens .Therefore provision may
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Final Report
be made in section 51 for charging the cost of the scheme spread over the beneficiary
properties/area as the minimum levy of betterment charge and the share of ½ of the increment in
land values may be kept as the upper limit.
6.4 Need for Separate Accounting for diversion Charges, Conversion charges, Betterment charges and
Betterment levy:
Section 132A of The Chhattisgarh Municipal Act, 1961 relates to Creation of Infrastructure Development
Fund by the state government. Section 132A(1) state that Notwithstanding anything contained in this Act
or any other Act for the time being in force, the State Government may create an Infrastructure Development
Fund with a view to assist the Municipalities in developing the infrastructure.
Section 132A (2) further provides that The sources of the infrastructure fund and the procedure and manner
in which the amount from the fund shall be provided to Municipalities shall be such as may be prescribed.
However the levy and collection of diversion charges, conversion charges/Betterment charges and
Betterment levy is presently not required to be deposited into any such Fund and not directly linked to
incurring of actual expenditure on infrastructure .The Corporation Act, the Development Authority Act and
the Housing Board Act do not make explicit provisions for a direct nexus between the payment of these
Charges and levy and its use only for creation of infrastructure by reserving the collections and putting it
into separate bank accounts and prohibiting its use for other purposes. As a result the same may be used
for paying salaries to the detriment of development of infrastructure.
There is a need for making it mandatory for the Corporation, the Development Authority and the
Housing Board to keep the collections from these Charges and levy in separate Infrastructure
Development Fund and deposited in separate Bank account so as to use it exclusively for up
gradation and creation of infrastructure.
6.5 Timeline for Implementation
6.5.1 Short term action (up to 1 year):
Short term action plan will include – firstly, issuance of Administrative Instructions like annual notification of
land and building rates for all localities and secondly, amendment of the different Rate Schedules for making
the tax rates value based in place of area based as suggested in this chapter. The amendment of the Rate
Schedules by the Government through issuance of notifications is authorized in the various Acts. It is
permissible for the Government under the present law to amend the same by issuance of
notifications in the official Gazette. It can also be done by amendment of Bye-law. For instance
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Final Report
Section 349 of The Chhattisgarh Municipalities Act, 1961 relating to Fees for licenses and permissions
provides that “The Council may charge such fee as may be prescribed by bye-laws for (i) any license granted
under this Act; and (ii) any permission granted under this Act”.
Section 366(3) of The Chhattisgarh Municipal Corporation Act, 1956 - Licenses and Permissions, provides
that “Except when it is otherwise expressly provided in this Act or in any rule or bye law made there under,
a fee for every such license or written permission may be charged at such rates as may be fixed by the
Corporation and such fee shall be payable by the person to whom the license is granted”.
Section 29 (2) of the Chhattisgarh Nagar Tatha Gram Nivesh Adhiniyam, 1973 provides for “Application for
permission for development by any person, not being the Union Government, State Government, a local
authority or a special authority constituted under this Act, intending to carry out any development on any
land, and that such application shall also be accompanied by such fee as may be prescribed.
6.5.2 Medium term action plan (1 to 3 years):
Medium term action plan will include amendment of the Rules, Regulations and Bye-laws which normally
require to be placed on the table of the Legislative Assembly and which are subject to modifications which
may be made by the Assembly. For instance, Section 355 of The Chhattisgarh Municipalities Act, 1961
relates to Power to make rules and provides under section 355 (1) that in addition to any power specially
conferred by this Act, the State Government may prescribe forms and make rules generally for the purpose
of carrying into effect the provisions of this Act.
Section 356 of The Chhattisgarh Municipalities Act, 1961 makes General Provision regarding rules and
section 356 (1) states that All rules for which provision is made in this Act, shall be made by the State
Government and shall be Consistent with this Act. Section 356(2) further provides that All rules may be
general for all Municipalities or for all Municipalities not expressly exempted from its operation or may be
special for the whole or any part of any one or more Municipalities, as the State Government may direct.
Section 356 (3) mandates that All rules shall be subject to publication in the gazette and section 356 (4)
makes it mandatory that All rules shall be laid on the table of the Assembly.
Section 357 of The Chhattisgarh Municipalities Act, 1961 contains General Provision regarding bye-laws.
Section 357 (1) provides that All bye-laws for which provision is made in this Act shall be made by the
Council and shall be consistent with this Act, and with the rules made there under. Section 357 (2) further
states that A bye-law may be general for the whole Municipality under the jurisdiction of the Council
making it, or special for any part of such Municipality, as the Council may direct. Section 357 (3)
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Final Report
makes it clear that Unless specially excepted in this Act from the operation of this subsection no bye-law
shall take effect until it has been confirmed by the State Government. Also, section 357 (4) further stipulate
that Unless specially excepted in this Act, from the operation of this subsection, no bye-laws shall take effect
until it has been published in the manner prescribed by rules made under this Act.
Section 358 of The Chhattisgarh Municipalities Act, 1961 relating to Power to make bye-laws states that in
addition to any power specially conferred by this Act, the Council may, and if so required by the State
Government shall, make bye-laws for--
(1) Municipal administration--
(h) determining the rates of fees for notice, warrant or maintenance of livestock under Chapter VIII;
(i) regulating entry and inspection for the purposes of this Act;
(j) generally, for the guidance of Municipal Officers and servants in all matters relating to municipal
administration;
(2) Taxation--
(e) the submission of returns by person liable to pay any tax under this Act;
(h) any other matter relating to the levy, assessment, collection, refund or remission of taxes under this Act;
(3) Buildings--
(a) the regulation or restriction of the use of sites for building for different areas;
(b) the regulation or restriction of buildings in different areas;
(c) the form of notice of erection of any building or execution of any work and the fee in respect of the same;
(d) the plans and documents to be submitted together with such notice and the information and further
information to be furnished;
(e) the level and width of foundation level of lowest floor and stability of structure;
(f) the construction of buildings and the materials to be used in the construction of building;
(g) the height of buildings whether absolute or relative to width of streets or to different areas;
(h) the number and height of storey's composing a building and height of rooms and the dimensions of
rooms intended for human habitation;
(i) the height and slope of the roof above the uppermost floor upon which human beings are to live or
cooking operations are to be carried;
(j) the provision of open spaces, external and internal, and adequate means of light and ventilation;
(v) the supervision of buildings
The procedure for making the Rules is very simple in as much as every rule made under these Acts/Sections
shall be laid before the Legislative Assembly and unless modified or dropped by the Assembly the rule shall
have effect.
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The medium-term actions will include amendment of Bye-laws and Rules.
6.5.3 Long term actions (more than 3 years):
Long term actions would basically include amendment of Acts/ Laws. This is a time–consuming and difficult
process which requires legislative intervention and approval. For instance, amendment of the Municipalities
Act and the Housing Board Act for amending the basis of levy of betterment charges, and the Development
Authority Act, for providing legal authority for charging premium for grant of additional FAR. Also new
provisions for levy of Infrastructure Development Charges and Infrastructure Augmentation Charges will be
required to be added into the Development Authority Act. Further, it would be better in a long term
perspective, to lay down the share of various Urban local bodies out of taxes, charges, fees and duties to
be collected – to be distributed amongst all Urban local bodies in a rational manner keeping in view their
respective duties and responsibilities for providing civic services and modern infrastructure to the citizens
of the city or lay down the principles for sharing of revenues between the Municipal Corporation, Councils
,and Development Authorities, and the Authorities administering the Revenue code in the respective areas
by amending the provisions in the Development Act, the Municipal Act and the Revenue Code.
6.5.4 Recommendations:
• Property Survey with GIS enabled mapping for reclassification of institutions with such as private
hospitals, coaching institutes, hotels, guest houses and plots owned by NGOs that are currently being
run on commercial lines on residential use property as commercial use property for the purpose of
application of tax collection. GIS mapping will enable real-time tracking of urban services provided along
with details of tax/fee collection from properties within the municipal limits. This will improve the ULBs’
ability to enforce better tax rules and will have a positive impact on collection efficiency.
Example: Bhubaneshwar.one portal provides a detailed GIS map for Bhubaneshwar city containing
details of infrastructure facilities, social amenities, ward and property details. There is a proposal to
include tax collection details in the GIS mapping framework.
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Final Report
Services provided and available ward wise.
Details of particular ward with mapping of all the properties and details.
• As suggested by the municipal authority for Change in the criterion of leasing for the municipal shops,
and also corrections or changes required if any in the present lease deed template, will covered and
looked on in compliance to the handholding stage. This in reference to the letter to the Secretary (dated
03/05/2017 letter reference no: NPN/Bazaar/2017/016) from the municipal corporation in subject to
“charging premium value on the illegal construction /expansion of the municipal lease commercial
shops”. The suggestion and proposal are regard to avoid the illegal construction and utilization
of the spaces for commercial activities by charging premium value on it and to regularize the
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Final Report
growth in a systematic matter. For the same, the lease agreement in accordance to the Regularisation
need to be uphold with changes in lease pattern, years of lease, lease policy , and marked it to the
prevailing market rate with “first right of bid” and open online tender system.
• As suggested by the municipal official for the extension of the municipal limit so as to cover the
immediate developed areas adjoining the municipal corporation limit in order to increase the base of tax
collection from the properties. Presently, the basic services are being rendered by the municipal
corporation in these areas but are exempted from the levy of tax as they don’t fall in the prevailing
municipal limit. Increase of the municipal limit with inclusion of the industrial area will enhance the
revenue collection from the concerned sources and will also help to streamline, manage the
development taking place in these areas.
6.6 Contractual Agreements/ MOU etc. (to be addressed during handholding phase in consultation with
stakeholders)
The drafting of the amendments will be done in consultation with the concerned authorities during the
handholding period.
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Final Report
Key Contact
Ajay Agrawal
Director – Planning & Infrastructure Advisory
Phone: +91 9599620019
Email: ajay.agrawal@in.knightfrank.com
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Final Report

TABLE OF CONTENTS ....................................................................................................................................... 2

LIST OF FIGURES .............................................................................................................................................. 6

LIST OF TABLES ............................................................................................................................................... 7

LIST OF ABBREVIATIONS .................................................................................................................................. 8

EXECUTIVE SUMMARY .................................................................................................................................... 10

1.1 INTRODUCTION TO VALUE CAPTURE FINANCE ................................................................................................ 18

2 VCF TOOLS ............................................................................................................................................ 23

2.1.1 STANDARD LAND BASED FISCAL TOOLS IN INDIA ........................................................................... 23

3.1 DEMOGRAPHIC PROFILE ................................................................................................................ 35

3.2 CITY GROWTH ......................................................................................................................................... 39

4 EXISTING LAND BASED FISCAL TOOLS IN BILASPUR .............................................................................. 54

4.1 FINANCIAL POSITION OF BILASPUR MUNICIPAL CORPORATION ............................................................................ 54

5 IDENTIFICATION OF APPLICABLE VCF TOOLS FOR BILASPUR ................................................................ 91

5.1 PROPERTY TAX........................................................................................................................................ 91

6 IMPLEMENTATION FRAMEWORK .......................................................................................................... 115

6.1 IDENTIFICATION OF CLAUSES TO BE AMENDED ................................................................................ 115

6.2 PROPOSED AMENDMENTS ........................................................................................................................ 136

Figure 1 : Diagrammatic Presentation of the Concept of VCF .............................................................................. 19

AMRUT Atal Mission for Rejuvenation and Urban Transformation

• Plan work for the assignment

Deliverable – Inception Report

• Collection of relevant data for Bilaspur City.

• Efficacy of existing land based fiscal tools

• Short, medium and long term implementation plan

Deliverable – Draft Report 1

• Presentation of ULB officials

• Incorporation of changes suggested indicated by the ULB officials.

Deliverable – Draft Report 2

• Presentation of ULB officials

• Incorporation of changes suggested indicated by the ULB officials.

Deliverable – Final Report

IDENTIFICATION OF APPROPRIATE VCF TOOLS FOR BILASPUR

• All the properties to be mapped and linked to GIS.

• Online system of demand and collection to be introduced.

• GIS Mapping of all properties – A Short Term Measure (0-1 year).

Rental Income from Immovable Properties

Building Permission Fee

• Rationalization of Building Permission Fee based on the Collector Rate of land.

• Rationalization of Development Charges based on the Collector Rate of land.

Premium on Relaxation of Rules or Additional FSI/FAR

• Introduction of provision of sell-able FAR in the Act.

Remunerative Use of Land Parcels

Revenue from Regularization of Unauthorized Colonies

Expanding Municipal Limits

1.1 INTRODUCTION TO VALUE CAPTURE FINANCE

Figure 1 : Diagrammatic Presentation of the Concept of VCF

Source: Knight Frank Research

Net Increase in value after public investments

Value without public

Figure 2: Diagrammatic Presentation of the Concept of VCF

Source: Knight Frank Research

1.2 OBJECTIVE OF STUDY

1.3 SCOPE OF THE ASSIGNMENT

The scope of the assignment covers:

• Provide any other suggestions for effective use of VCF Tools

1.4 NEED OF VCF FOR BILASPUR

2.1.1 STANDARD LAND BASED FISCAL TOOLS IN INDIA

2.1.2 Land Value Tax