Empowering Urban Local Bodies: Leveraging GIS for Fiscal Self-Sufficiency

Anurag Kumar & Amrit Raj Barnwal
23 hours ago
6 min read

Introduction

Urban local bodies (ULBs) are in a chronic funding shortfall, which they decide either to maintain their deteriorating infrastructure or demand state grants to meet their needs. The way out of this trap does not lie in some other central government project, but instead lies right above our cities, in the sky. This discussion demonstrates that the systematic introduction of the Geographic Information System (GIS) technology is the most effective non-partisan reform to release fiscal self-sufficiency to ULBs; however, its implementation is facing not technical barriers, but a knot of interlaced antique laws and political opposition.

As the money required by India to develop its urban infrastructure is approximately $840 billion, the existing paradigm of state-based funding has now come to an end. Although property taxes make up 16 percent of the total municipal revenues, the property tax-to-GDP ratio in India is at a meager 0.15 as compared to 1-3 percent in developed countries.

According to the ICRIER report, property tax collection as a ratio of GDP fell to 0.084 percent in 2012-2018; however, during the same period, the population in the 37 largest municipalities in India increased drastically.

The GIS Revolution: Mapping is Over.

GIS technology is based on a logical process: Satellite Imagery → Digitization and Mapping Data → Integration, Automated Assessment → Billing, and Collection Enforcement. It is not only about developing digital maps, but also a system to develop whole property intelligence.

The example of such collaboration is Pune and Elixir AI, as 10,000 previously unmapped properties were identified and brought an additional 30 crores of revenue via GIS-enabled assessment. However, it is not only Pune; similar programs have increased the tax base of Bengaluru by 25 percent, and pilot projects in Hyderabad show a rate of 85 percent accuracy in automated valuation.

Moreover, Pune municipal corporation managed to collect an additional 30 cr. in a single use of GIS; thereby, the potential throughout the country is immense. Based on ICRIER data, a systematic GIS initiative across the 100 largest cities in India could potentially identify 15,000-20,000 crore of previously unknown property tax to the system, which could finance major infrastructure building in some cases without any external sourcing.

The Law vs. Technology: A Fatally Mismatched Pairing.

The major bottleneck here is not technological know-how and implementation, but the absence of an appropriate legal framework. The 74th Amendment through Article 243X gives ULBs power to collect taxes; however, multiple overlapping laws make it’s realisation difficult. Through this fragmentation, it is impossible to have a successful GIS rollout. The complexity of India's federal structure compounds this problem. Tamil Nadu's ongoing reservations about the 74^th Amendment highlight how constitutional frameworks often struggle to address state-specific needs. Similar legal fragmentation affects GIS implementation - what works in Maharashtra cannot be directly replicated in Tamil Nadu without state-specific legal reforms. The development of law is far behind the advancement of Technology. This discrepancy is crippling throughout the country.

Physical verification is required in courts as a symptom of deep-rooted institutional distrust towards digital evidence. In Shiv Sewak Singh v. State of U.P. (2012), the Court recognized the usefulness of GIS but ordered door-to-door manual verification, establishing an additional superfluous hybrid model that negates the performance improvements that GIS is designed to achieve. Although this judicial warning is comprehensible, it compels ULBs to have two systems, which increases cost rather than reducing it.

Section 63 of Bharatiya Sakshya Adhiniyam obliges electronic evidence to be certified in writing, which brings with it the challenge of authentication, rendering GIS-based evidence susceptible in court. In the meantime, privacy concerns related to the use of data in GIS mapping emerged after K.S. Puttaswamy v. UOI (2017). The court gave three essential tests: legality, necessity, and proportionality tests, developing an extra burden of compliance.

The major lesson that can be learned from some early adopter countries, such as the UK and the USA, is not their high-tech features, but their high-tech systems of governance. The national-level digital property records and valuation standards were established initially and were implemented later on. India is attempting to implement the technology, with the legal system still being archaic.

"Austria's 200-year evolution from the world's first systematic property tax cadastre (1817) to today's fully digital, real-time cadastral system demonstrates how systematic GIS implementation can transform municipal revenue collection - a lesson directly applicable to India's current property tax challenges."

Brazil and South Africa’s cases show that GIS can be used to pursue progressive objectives along with efficiency. The land value capture systems in the city of São Paulo and the Municipal Property Rates Act in South Africa demonstrate how GIS can be used to solve the urban inequality issue, which is particularly important in the Indian cities where 25 percent of the urban inhabitants live in informal settlements.

The Political Economy Trap

Political opposition and an informal settlement are not distinct phenomena; they are symbiotically connected. Informal settlements have a leaderless voter base that local politics maintains by patronage, so that they are not present on the official map. The very introduction of GIS renders these properties visible and presents a clear threat to this political economy.

The property dealers and the informal settlement dwellers constitute popular political constituencies: dealers enjoy a system of non-transparent valuation that allows them to avoid taxes, and informal settlers are afraid that their groups can be formalized, thus taxed or evicted. This is the reason why reform is not an easy task; it is not all about technology, but a matter of breaking down systems of power and patronage.

The Escape Route: A Phased Strategy.

To overcome this stalemate, it is necessary to have a three-stage plan involving:

Phase 1: The Foundation

The requirement of all Class I cities to develop GIS-based digital property master lists, not to be taxed, but to map the properties in detail by the Central Government. This covers the problem of not knowing what we do not know without creating an immediate political backlash.

Phase 2: The Next Integration.

Making it legally obligatory to integrate property databases with the UIDAI and utility databases (water, electricity) to check occupancy and ownership. This provides a verified and cross-referenced database of properties that filters ghost properties out, creating ownership clarity.

Phase 3: The Implementation

Implementation can be done by assessing, billing, and transparent grievance redressal with the help of this proven database. Most importantly, introduce a no-questions-asked voluntary disclosure amnesty program, and roll out GIS, where residents of informal settlements can get their properties registered at nominal fixed rates without fear of punitive retroactive tax or demolition.

Critical Legal Reforms:

1. Model Municipal Laws: Streamline GIS-enabled property tax between states.

2. Digital Evidence Recognition: Confer GIS-based assessment with grant legal validity.

3. Integrated Data Architecture: Requirement to connect property records to UIDAI and utility databases.

4. Privacy-Compliant Framework: coexist between efficiency and constitutional rights to privacy by having a policy of transparent data usage.

The Choice Ahead

The technology exists, and Pune became the first city to collect additional taxes, which shows that the concept is tested. Scalable models are evident throughout the world. The fiscal situation of urban India may be altered by the prospective revenue of ₹15,000-20,000 crore annually on a national level.

It is no longer a question of whether GIS can help solve the revenue crisis of urban India but whether our cities are willing and legally deft enough to adopt it. It is either feed the cycle of dependency and decaying infrastructure, or take a different path of empowering and self-reliant urban governance. The maps are already there; whether we are brave enough to follow them or not is the question of choice ahead.

Table:

Reform Theme	Issue	Recommendation
GIS-based property registers & assessments	Property records are manual, incomplete, and irregularly updated; assessments depend on official discretion, manual surveys, and staff shortages.	Legally mandate GIS-based digital property registers and periodic updates. Require field surveys and assessments using GIS/digital tools integrated with other departments.
Digitization, integration & legal backing	Records are fragmented, paper-based, and lack standardized addresses; databases are not integrated; weak legal recognition of digital evidence.	Create a single, legally backed digital property database. Link property records (via UPIDs) with land registry and utility databases, enabling digital registers, assessments, and legal reliance on digital evidence.
Dispute redressal & privacy safeguards	Dispute resolution is slow and ineffective; increasing GIS surveillance lacks clear privacy norms.	Establish robust GIS-enabled dispute redressal, allowing partial payments and digital evidence. Enact privacy and data protection safeguards for handling geospatial/personal data.