IDEAS home Printed from https://ideas.repec.org/a/eee/lauspo/v110y2021ics0264837719307690.html
   My bibliography  Save this article

Property taxation in India: Issues impacting revenue performance and suggestions for reform

Author

Listed:
  • Awasthi, Rajul
  • Nagarajan, Mohan
  • Deininger, Klaus W.

Abstract

While property taxes are ideally suited for cities to generate own source revenue to provide services underpinning global competitiveness, the technical complexity of establishing tax rolls and administering them has traditionally been a deterrent to their more widespread use. We use the example of India to show how national initiatives for regulatory reform, combined with ICT-based approaches and private sector outsourcing, allowed to increase property tax receipts and client satisfaction by creating complete rolls, ensuring realistic valuation, reducing unwarranted exemptions, and improving administration. Beyond offering lessons for other developing countries, this can also reduce cost of service delivery and provide the stepping stone for a complete property register.

Suggested Citation

  • Awasthi, Rajul & Nagarajan, Mohan & Deininger, Klaus W., 2021. "Property taxation in India: Issues impacting revenue performance and suggestions for reform," Land Use Policy, Elsevier, vol. 110(C).
    • Handle: RePEc:eee:lauspo:v:110:y:2021:i:c:s0264837719307690
    DOI: 10.1016/j.landusepol.2020.104539
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0264837719307690
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.landusepol.2020.104539?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Cristian Sepulveda & Jorge Martinez-Vazquez, 2012. "Explaining property tax collections in developing countries: the case of Latin America," Chapters, in: Giorgio Brosio & Juan P. Jiménez (ed.), Decentralization and Reform in Latin America, chapter 7, pages iii-iii, Edward Elgar Publishing.
    2. Miriam Hortas-Rico, 2014. "Urban sprawl and municipal budgets in Spain: A dynamic panel data analysis," Papers in Regional Science, Wiley Blackwell, vol. 93(4), pages 843-864, November.
    3. Oates, Wallace E. & Schwab, Robert M., 1997. "The Impact of Urban Land Taxation: The Pittsburgh Experience," National Tax Journal, National Tax Association, vol. 50(1), pages 1-21, March.
    4. Douglas Gollin & Remi Jedwab & Dietrich Vollrath, 2016. "Urbanization with and without industrialization," Journal of Economic Growth, Springer, vol. 21(1), pages 35-70, March.
    5. Gollin, Douglas & Lagakos, David & Kirchberger, Martina, 2017. "In Search of a Spatial Equilibrium in the Developing World," CEPR Discussion Papers 12114, C.E.P.R. Discussion Papers.
    6. -, 2012. "Decentralization and reform in Latin America: improving intergovernmental relations," Copublicaciones, Naciones Unidas Comisión Económica para América Latina y el Caribe (CEPAL), number 2028 edited by Edward Elgar.
    7. Ben Dachis & Gilles Duranton & Matthew A. Turner, 2012. "The effects of land transfer taxes on real estate markets: evidence from a natural experiment in Toronto," Journal of Economic Geography, Oxford University Press, vol. 12(2), pages 327-354, March.
    8. Paul Collier & Anthony J Venables, 2018. "Who gets the urban surplus?," Journal of Economic Geography, Oxford University Press, vol. 18(3), pages 523-538.
    9. Michael Hallsworth, 2014. "The use of field experiments to increase tax compliance," Oxford Review of Economic Policy, Oxford University Press and Oxford Review of Economic Policy Limited, vol. 30(4), pages 658-679.
    10. Timothy Besley & Torsten Persson, 2014. "Why Do Developing Countries Tax So Little?," Journal of Economic Perspectives, American Economic Association, vol. 28(4), pages 99-120, Fall.
    11. Byron Lutz, 2015. "Quasi-Experimental Evidence on the Connection between Property Taxes and Residential Capital Investment," American Economic Journal: Economic Policy, American Economic Association, vol. 7(1), pages 300-330, February.
    12. Roy Bahl & Sally Wallace, 2008. "Reforming the Property Tax in Developing Countries: A New Approach," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper0819, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    13. Mr. John Norregaard, 2013. "Taxing Immovable Property Revenue Potential and Implementation Challenges," IMF Working Papers 2013/129, International Monetary Fund.
    14. Marco Gonzalez-Navarro & Climent Quintana-Domeque, 2016. "Paving Streets for the Poor: Experimental Analysis of Infrastructure Effects," The Review of Economics and Statistics, MIT Press, vol. 98(2), pages 254-267, May.
    15. Castro, Lucio & Scartascini, Carlos, 2015. "Tax compliance and enforcement in the pampas evidence from a field experiment," Journal of Economic Behavior & Organization, Elsevier, vol. 116(C), pages 65-82.
    16. Lorenzo Casaburi & Ugo Troiano, 2016. "Ghost-House Busters: The Electoral Response to a Large Anti–Tax Evasion Program," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 131(1), pages 273-314.
    17. Hansjörg Blöchliger & Christian Hilber & Olivier Schöni & Maximilian von Ehrlich, 2017. "Local taxation, land use regulation, and land use: A survey of the evidence," OECD Economics Department Working Papers 1375, OECD Publishing.
    18. Edward L. Glaeser, 2014. "A World Of Cities: The Causes And Consequences Of Urbanization In Poorer Countries," Journal of the European Economic Association, European Economic Association, vol. 12(5), pages 1154-1199, October.
    19. Jedwab, Remi & Christiaensen, Luc & Gindelsky, Marina, 2017. "Demography, urbanization and development: Rural push, urban pull and…urban push?," Journal of Urban Economics, Elsevier, vol. 98(C), pages 6-16.
    20. Wallace E. Oates & Robert M. Schwab & Wallace E. Oates & Robert M. Schwab, 2004. "The Impact of Urban Land Taxation: The Pittsburgh Experience," Chapters, in: Environmental Policy and Fiscal Federalism, chapter 16, pages 273-293, Edward Elgar Publishing.
    21. Hansjörg Blöchliger, 2015. "Reforming the Tax on Immovable Property: Taking Care of the Unloved," OECD Economics Department Working Papers 1205, OECD Publishing.
    22. Banzhaf, H. Spencer & Lavery, Nathan, 2010. "Can the land tax help curb urban sprawl? Evidence from growth patterns in Pennsylvania," Journal of Urban Economics, Elsevier, vol. 67(2), pages 169-179, March.
    23. Daniel Ayalew Ali & Klaus Deininger & Michael Wild, 2020. "Using satellite imagery to create tax maps and enhance local revenue collection," Applied Economics, Taylor & Francis Journals, vol. 52(4), pages 415-429, January.
    24. Barbara Ermini & Raffaella Santolini, 2017. "Urban sprawl and property tax of a city’s core and suburbs: evidence from Italy," Regional Studies, Taylor & Francis Journals, vol. 51(9), pages 1374-1386, September.
    25. Mujtaba Piracha & Mick Moore, 2016. "Revenue-Maximising or Revenue-Sacrificing Government? Property Tax in Pakistan," Journal of Development Studies, Taylor & Francis Journals, vol. 52(12), pages 1776-1790, December.
    26. Venables, Anthony J., 2017. "Breaking into tradables: Urban form and urban function in a developing city," Journal of Urban Economics, Elsevier, vol. 98(C), pages 88-97.
    27. Samuel Jibao & Wilson Prichard, 2016. "Rebuilding Local Government Finances After Conflict: Lessons from a Property Tax Reform Programme in Post-Conflict Sierra Leone," Journal of Development Studies, Taylor & Francis Journals, vol. 52(12), pages 1759-1775, December.
    28. Jibao, Samuel & Prichard, Wilson, 2016. "Rebuilding Local Government Finances After Conflict: Lessons from a Property Tax Reform Programme in Post-Conflict Sierra Leone," Working Papers 13739, Institute of Development Studies, International Centre for Tax and Development.
    29. Jedwab, Remi & Vollrath, Dietrich, 2015. "Urbanization without growth in historical perspective," Explorations in Economic History, Elsevier, vol. 58(C), pages 1-21.
    30. Presbitero, Andrea F. & Sacchi, Agnese & Zazzaro, Alberto, 2014. "Property tax and fiscal discipline in OECD countries," Economics Letters, Elsevier, vol. 124(3), pages 428-433.
    31. Henderson, J. Vernon & Storeygard, Adam & Deichmann, Uwe, 2017. "Has climate change driven urbanization in Africa?," Journal of Development Economics, Elsevier, vol. 124(C), pages 60-82.
    32. Roy Kelly, 2013. "Making the Property Tax Work," International Center for Public Policy Working Paper Series, at AYSPS, GSU paper1311, International Center for Public Policy, Andrew Young School of Policy Studies, Georgia State University.
    33. Timothy Besley & Ethan Ilzetzki & Torsten Persson, 2013. "Weak States and Steady States: The Dynamics of Fiscal Capacity," American Economic Journal: Macroeconomics, American Economic Association, vol. 5(4), pages 205-235, October.
    34. Piracha, Mujtaba & Moore, Mick, 2016. "Revenue-Maximising or Revenue-Sacrificing Government? Property Tax in Pakistan," Working Papers 14000, Institute of Development Studies, International Centre for Tax and Development.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Milosavljević, Miloš & Radovanović, Sandro & Delibašić, Boris, 2023. "What drives the performance of tax administrations? Evidence from selected european countries," Economic Modelling, Elsevier, vol. 121(C).

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Gregory F Randolph & Michael Storper, 2023. "Is urbanisation in the Global South fundamentally different? Comparative global urban analysis for the 21st century," Urban Studies, Urban Studies Journal Limited, vol. 60(1), pages 3-25, January.
    2. J. Vernon Henderson & Sebastian Kriticos, 2018. "The Development of the African System of Cities," Annual Review of Economics, Annual Reviews, vol. 10(1), pages 287-314, August.
    3. Bluhm, Richard & Krause, Melanie, 2022. "Top lights: Bright cities and their contribution to economic development," Journal of Development Economics, Elsevier, vol. 157(C).
    4. Bluhm, Richard & Krause, Melanie, 2022. "Top lights: Bright cities and their contribution to economic development," Journal of Development Economics, Elsevier, vol. 157(C).
    5. Schächtele, Simeon & Eguino, Huáscar & Roman, Soraya, 2022. "Improving taxpayer registration through nudging? Field experimental evidence from Brazil," World Development, Elsevier, vol. 154(C).
    6. Animashaun, Jubril O. & Emediegwu, Lotanna E., 2023. "Rural-to-Urban Migration (RUM) and Women’s Work in Nigerian Households," 2023 Annual Meeting, July 23-25, Washington D.C. 335503, Agricultural and Applied Economics Association.
    7. Taranu, Victoria & Verbeeck, Griet, 2022. "Property tax as a policy against urban sprawl," Land Use Policy, Elsevier, vol. 122(C).
    8. Dina Pomeranz & José Vila-Belda, 2019. "Taking State-Capacity Research to the Field: Insights from Collaborations with Tax Authorities," Annual Review of Economics, Annual Reviews, vol. 11(1), pages 755-781, August.
    9. Bento, Antonio M. & Franco, Sofia F. & Kaffine, Daniel, 2011. "Is there a double-dividend from anti-sprawl policies?," Journal of Environmental Economics and Management, Elsevier, vol. 61(2), pages 135-152, March.
    10. Busso, Matias & Chauvin, Juan Pablo & Herrera L., Nicolás, 2021. "Rural-urban migration at high urbanization levels," Regional Science and Urban Economics, Elsevier, vol. 91(C).
    11. Philipp Rode & Alexandra Gomes & Muhammad Adeel & Fizzah Sajjad & Andreas Koch & Syed Monjur Murshed, 2020. "Between Abundance and Constraints: The Natural Resource Equation of Asia’s Diverging, Higher-Income City Models," Land, MDPI, vol. 9(11), pages 1-33, October.
    12. Christopher Hoy & Luke McKenzie & Mathias Sinning, 2024. "Improving Tax Compliance without Increasing Revenue: Evidence from Population-Wide Randomized Controlled Trials in Papua New Guinea," Economic Development and Cultural Change, University of Chicago Press, vol. 72(2), pages 691-723.
    13. Piracha, Mujtaba & Moore, Mick, 2016. "Revenue-Maximising or Revenue-Sacrificing Government? Property Tax in Pakistan," Working Papers 14000, Institute of Development Studies, International Centre for Tax and Development.
    14. Kristina M. Bott & Alexander Cappelen & Erik Ø. Sørensen & Bertil Tungodden, 2017. "You've Got Mail: A Randomised Field Experiment on Tax Evasion," Working Papers 2017-051, Human Capital and Economic Opportunity Working Group.
    15. Constantin Bürgi & Nisan Gorgulu, 2022. "The Impact of the Spatial Population Distribution on Economic Growth: Evidence from the United States," CESifo Working Paper Series 10008, CESifo.
    16. Mujtaba Piracha & Mick Moore, 2016. "Revenue-Maximising or Revenue-Sacrificing Government? Property Tax in Pakistan," Journal of Development Studies, Taylor & Francis Journals, vol. 52(12), pages 1776-1790, December.
    17. Andrés Rodríguez‐Pose & Jamie Griffiths, 2021. "Developing intermediate cities," Regional Science Policy & Practice, Wiley Blackwell, vol. 13(3), pages 441-456, June.
    18. Remi Jedwab & Daniel Pereira & Mark Roberts, 2019. "Cities of Workers, Children or Seniors? Age Structure and Economic Growth in a Global Cross-Section of Cities," Working Papers 2019-13, The George Washington University, Institute for International Economic Policy.
    19. Boris Cournède & Jean-Marc Fournier & Peter Hoeller, 2018. "Public finance structure and inclusive growth," OECD Economic Policy Papers 25, OECD Publishing.
    20. Bjerke, Lina & Mellander, Charlotta, 2019. "Mover Stayer Winner Loser - A study of income effects from rural migration," Working Paper Series in Economics and Institutions of Innovation 476, Royal Institute of Technology, CESIS - Centre of Excellence for Science and Innovation Studies.

    More about this item

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:lauspo:v:110:y:2021:i:c:s0264837719307690. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Joice Jiang (email available below). General contact details of provider: https://www.journals.elsevier.com/land-use-policy .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.