Ahmedabad's experience may hold lessons for Mumbai. But the political will is missing.

 Sanjeev Nayyar.................

 

 THE REPEAL of the Urban Land Ceiling Act in Mumbai  has led to optimism all around. It is just one of sore ly needed measures to solve Mumbai's problems. Here are some out-of-the-box ideas that might help Mumbai regain its glory .

Create Lakes: Thousands of acres of land are expected to be available now. Their redevelopment plan should include space for artificial lakes and gardens with walkways around them. They could be funded through public private partnerships.

The Mumbai Heritage Conservation Committee found 11 water bodies in NTCowned cotton textile mills situated in the Parel-Lalbaug area. These water bodies need to be retained and beautified. Some of the mills are India United Mills, Cadell road, Mumbai Textile Mills, Lower Parel, Madhoosudan Mills, Parel, and Gold Mohur Mills, Dadar, among others.

The benefits are manifold. One, it would reduce temperatures and provide citizens with a place to unwind. Two, it would promotes community living in an inclusive way, meaning open access to all sections of society. Multiple lakes and parks could transform the city in the same way that the proposed Sabarmati Riverfront Development Ahmedabad will. Closer home, Thane's lakes make it a much better place to live in.

For this dream to come true the State Government and Courts have to ensure that open spaces are retained.

Ferry services: Visitors to Hong Kong may have used the Star Ferry Service. With its fleet of sturdy ships it ferries people between islands virtually throughout the year. Among its fleet is the 750-seater ‘Golden Star' that has an air-conditioned upper deck cabin. Ironically, the ferry service was originally founded by a prominent Parsee, Dorabjee Nowrojee, under the name of Kowloon Ferry Company. In 2002, Hong Kong had 55 million ferry passengers. Something like that in Mumbai would take some pressure off local transport- besides making for a pleasurable ride.

The idea is to introduce a ferry service comprising 1000-seat vessels on the western (Borivali to Nariman Point) and eastern flanks (Navi Mumbai to Gateway of India). This needs to be supported by strong lateral connections into entry/exit points. Hovercrafts were introduced earlier but failed because of their small size and the lack of supporting infrastructure.

The service would benefit the aam aadmi, provide car owners an alternative and possibly spur the Indian Railways to improve the quality of their services.

Critics might argue: what happens during the rains when the sea is rough? A noted town planning expert opines that the service would be suspended for a maximum of 75 days on the western seafront and 30 days on the eastern coastline (protected by the harbour). Even if commuters have to travel by other transport for this short period, ferries still offer a comfortable commute for at least 225 working days in a year. The service could earn additional revenue from tourism and parties.

Could one of India's major industrial houses make a ‘Nano' out of the Ferry project?

Property Tax Reform: Mumbai must take a leaf out of Ahmedabad on property reforms. Property tax used to be determined on the basis of Annual Rateable Value in Ahmedabad. It was complicated and perceived to be irrational and unfair. The assessed values, based on the notional rental value of properties, were very low. A large number of residential and commercial properties were exempt from paying tax.

Moving to an area-based system increased revenues and made it more equitable too.

In the first phase municipal records were updated, existing undervalued properties were re-assessed and tough action taken against defaulters. In phase 2, the city moved to an area-based property tax system. It involved comprehensive survey of properties and computerisation of data. Feedback from the public was invited.

The main features of the amended Ahmedabad system are: the standard factor is ‘1' in all cases. The value of each factor is raised or lowered depending on the type of locality/building, age of building. The prevailing market value of the land determines the location factor of the area. Properties over 10 years old get a discount of 15 per cent, going up to 50 per cent for properties more than 40 years old. Property occupied by owners are levied half the tax as compared to tenanted property .

Property tax is no longer based on annual rental value and its assessment de-linked from the ‘standard rent' concept of the rent control acts. This linkage has in the past undermined the revenue generating potential of property tax.

Following the reforms, revenues jumped from about Rs 96 crore in 2001 to nearly Rs 175 crore in 2006. Reforms at AMC show that e-governance, along with a rational, equitable, transparent system of property valuation generates higher revenues.

In the recent past, Bihar, Andhra Pradesh, Delhi and Karnataka have introduced legal reforms in property tax assessment. Reform requires political will, something that is scarce in Maharashtra. And yes, Assembly Elections are due in 2009.

Double entry Accounting: Most municipal bodies function on the concept of single entry accounting where income and expenditure is accounted for on a cash basis. Under the accrual system, when a bill for property tax is raised the party's account is debited, amounts received credited and amount unpaid shown as outstanding. A party-wise outstanding list forms part of the general ledger. In the cash system, property tax is accounted as income when money is received from a party .

In November 2005, Gujarat launched the historical Municipal Accounting Reform project for implementing the computerised accrual-based double entry accounting system in all municipalities. With help from the state government and two reputed local chartered accountants, a simple tender was designed. Chartered accountant firms from all over the state were assigned three to four municipalities each. A common vendor was selected for distributing the adapted and upgraded software with training inputs.

BMC introduced double entry accounting in 1980 for water supply and sewerage services, which was a precondition for obtaining World Bank funding. A. F. Ferguson & Co was appointed in 2006 to assist BMC extend double entry accounting across its operations. Accounts for the year ended March 2008 are expected to be prepared on accrual basis. Meanwhile, a number of municipal bodies such as Thane, Pune, and Nasik have, on a stand-alone basis, started work on double entry accounting.

Unlike Gujarat, where the new system is driven by the state government and is thus consistent, in Maharashtra cities are doing their own thing.

If Mumbai fails to bring about reforms, there would be a flight of capital and talent to financial centres like Dubai. If that were to happen India's policies would once again contribute to Dubai's growth, just as restrictions on the import of gold made Dubai a key transit point for smuggling of the yellow metal into India.

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