Ways and means for the infrastructure boom

Kochi is on the threshold of a boom in infrastructure development. With support and financial aid from various agencies, including the Asian Development Bank and the Jawaharlal Nehru National Urban Renewal Mission, the city is charting out its development dreams. Projects for road-traffic improvement, drinking water and sewage treatment will be implemented.

As the city hopes to step up its infrastructure, the biggest challenge faced by civic administrators is raising matching funds for the financial aid from the bank and the mission.

Bringing more sectors and segments under the tax net and increasing revenue collection are the options before them to help in realising the funds. Proposals to this effect were made in the annual budget passed by the Corporation council during the last week of March.

As the real-estate sector is one of the fast growing areas in the city, it is natural that Deputy Mayor C.K. Manisankar, who presented the budget, targeted the sector for garnering more revenue.

Introduction of a development cess, assessment of building tax based on the plinth area and self-assessment of building tax by property owners are some of the ways by which the Corporation hopes to raise additional revenue. It is too early to predict how these reforms and schemes will have an impact on the common man and industry. However, the 2007 budget marks the beginning of a new financial administration and management regime in the Corporation, as it is the first time that the civic administrators are planning development projects for which funds have been earmarked.

Development cess

The development cess targets the fad among builders and property buyers for waterfront structures and apartments. The Corporation plans to collect the cess for development of marshy lands, which are being filled up to create water frontage for the plots. The cess will be collected while issuing permits for commercial buildings, apartment complexes and luxury housing projects built on reclaimed marshy land, the budget proposal says.

A permit from the Corporation has been made mandatory for the development of marshy land. The agency or individual who approaches the civic body for the permit will be made to construct drains with covering slabs and other facilities for preventing water logging. These facilities will have to be put in place according to the design and specifications of the Corporation. Connecting roads from the developed land will also have to be provided by the developer. The basic rate of the development cess has been fixed at Rs. 1,500 a cent. If the total area to be developed is below 25 cents, it will be Rs. 1,000 a cent. In case of holdings below 7 cents, there will no cess. However, a permit should be obtained.

Residential units with area below 3000 sq. ft have been excluded from the levy of development cess.

In the case of unauthorised development of land, the budget suggests that a development permit be issued only after collecting land-development fee and the cess, in addition to the fee for constructing the building.

New tax assessment

The Corporation has announced that it will introduce building tax assessment based on the plinth area in the city from April 1. Houses with area below 300 sq. ft and slums will be exempted from the levy. The system of self-assessment of property tax by the house owners based on the materials used for construction and proximity of the building to important roads and institutions will be introduced in the Corporation area during the current financial year. The new system is expected to bring in an additional revenue of Rs. 10 crore.

The civic body has proposed to target residential apartments rented out for commercial uses. The buildings thus rented out will be slapped with tax applicable to commercial establishments. The Corporation will be able to realise at least Rs. 3 crore from these buildings, the budget says.

The Corporation plans to seek the cooperation of residents' associations and organisations of traders for identifying buildings that have not been brought under the tax net or are under-assessed. The drive will help the civic body realise at least Rs. 3 crore, the budget says.

The budget says the tendency to construct additional floors on buildings, without permission, for commercial and residential use is prevalent in the city. The Corporation proposes to conduct tax assessment of such buildings during the current fiscal. The drive will yield an additional revenue of Rs. 1 crore.

It has come to the notice of the civic administrators that a large number of flats have been rented out in the city. However, the Corporation is not getting its due share of tax from these flats. Hence, the Corporation authorities have proposed to conduct the reassessment of tax for flats that have been rented out. The drive will be implemented with the cooperation of people.

Parking fine

Unauthorised parking on the city streets will invite fine once the Corporation starts implementing the decision to fine vehicle owners who park their vehicles outside the designated areas. The drive will be implemented with the cooperation of the Regional Transport Authority, city police, merchants' union, Kerala Chamber of Commerce and Industry, Confederation of Industries and Ernakulam District Residents' Associations Apex Council. The Corporation plans to introduce this measure from May. The collection of parking fee will be intensified and cess will be collected from pay-and-park centres.

Market renovation

The decades-old Ernakulam market, Broadway and other trade centres will be renovated with public-private participation. A senior architect has been asked to prepare the design. It has also been proposed to constitute a renovation committee consisting of representatives of various stakeholders.

The development programmes in these areas will be implemented with the cooperation of traders and workers. A multi-level parking plaza has been proposed in the parking area at Mullessery canal. The traders at Fashion Street will be provided shops on the ground floor of the complex and multi-level parking will be provided on the upper floors. The project will be implemented on BOT basis.

A sum of Rs. 5 lakh has been earmarked for the project in the budget.