Urban development ministry mulls tax levies to fund metro expansion

In a bid to up funding for expansion of the metro networks across the country, the urban development ministry has written to state governments, asking them to explore the option of imposing a dedicated tax on property transactions along the metro corridors.

Urban development secretary, Sudhira Krishna said yesterday that since the metro was a very costly system, it was difficult to meet expenses. He added, with many cities in the country planning to  go for the system, there was a need to raise funds.

He added,  a dedicated urban transport fund was being created to cater to these projects. However, he added the government was looking at innovative ways of revenue generation, and one of them is levying additional taxes.

He said, the dedicated fund would get 75 per cent of the amount raised through such taxes, and it would be used to expand metro projects.

According to Krishna, state governments were free to decide the percentage increase in these taxes. He added the governmet had also proposed that a levy of 10 per cent be imposed for increasing the floor area ratio along metro stretches.

Taking a cue from the Bangalore Metro, the DMRC was also exploring the option of issuance of tax-free bonds to raise funds for the project's expansion. He added, this offered  the public an opportunity to invest in tax-free bonds and, at the same time, help the corporation raise funds.