Revenue Generation

The Corporation has been authorized to impose the following taxes and fee subject to approval of State Government as per the Jammu & Kashmir Corporation Act. 2000.

  1. taxes on buildings and lands

  2. such other tax, at such rates as the State Government may, by notification, in each case direct;

  3. a duty on the transfer of immovable properties situated within the limits of the municipal area.

  4. a tax on profession, trades, callings and employments

  5. a tax on vehicles other than motor vehicles and animals

  6. a tax on the increase in urban land values caused by the execution of any development or improvement work

  7. show tax;

  8. tax on consumption of energy at a rate not exceeding 2 paisa for every unit of electricity consumed by any person within the municipal area;

  9. sewerage tax

  10. Any other tax that may be imposed under the provisions of the Jammu and Kashmir Municipal Act, 2000.


Subject to the prior approval of the Government, the Corporation may in the manner prescribed levy a fee with regard to the following

  1. a fee on advertisements other than advertisements in the newspapers;

  2. a fee on building applications;

  3. development fee for providing and maintaining civic amenities in certain areas;

  4. a fee with regard to lighting;

  5. a fee with regard to scavenging;

  6. a fee in the nature of costs for providing internal services in a building scheme or town planning scheme

  7. Any other fee as deemed fit by the Corporation for services rendered.

The SMC’s financial capacity has not grown to match its requirements. Though the imposition of new taxes on the citizens, when the unemployment is at its peak in the city and the trade and commerce is at low ebb, would prove socially and politically disastrous but we have no option but to go for this experiment to impose new taxes and user changes for the better management and city governance. The resentment among the citizens due to lack of infrastructure facilities like macadamized roads, paved lanes, landscapes, widened footpaths, clean environment, proper drainage facilities, modernized housing, sanitation etc is obvious one and without ample resources nothing can be improved. The internal resources of SMC are inelastic in nature and have not increased to match increase in expenditure as in vivid from table bgcolor="#B6C8F3" “A” below giving details of expenditure of last five years.

The provisions of the J&K Municipal Corporation Act, empowers the Corporation to collect various kinds of taxes, fees, charges. In order to be self-sufficient and augment the internal resource base of the Corporation, a new system of taxation is being devised to sustain and make Corporation vibrant one. In the absence of the Bye-Laws, the Corporation has not been able to revise its age old tax structure. In order to ameliorate its income from taxes and other non-tax sources, the Srinagar Municipal Corporation has decided to impose Tax on land and Building. The draft Tax or land and building rules have been approved by the General Council of the Corporation in October 2006 and Submitted to the Government for approval which is awaited. The, drafting and finalization of Advertisement Byelaws, Rules for Tax on Profession, Trading and Calling, Dangerous Trades and Hotel/Restaurant Rules are under process. The Srinagar Municipal Corporation has outsourced a number of hoarding sites in the Srinagar City after inviting tenders on national level and an amount of Rs.85 Lacs are being generated annually under this head of income.

Duringthe year 2008-2009 income from the internal resources is Rs. 603.01 Lac and projected income for the current year 2009-10 is Rs. 650.00 Lacs. There has been appreciable increase in the internal resources owing to number of steps taken by the Corporation to augment the existing resources which also includes imposition of Advertisement fee introduced first time in the year 2005-2006 which along has fetched Rs. 85.00 Lacs to the Srinagar Municipal Corporation in the year 2008-2009. Similarly, the Car Parking Fee fetched us about Rs. 24.62 Lacs alone in the year 2008-2009.

The Srinagar Municipal Corporation is also contemplating to impose a number of user charges and taxes to the Citizens of Srinagar city but this will be possible only when better civic amenities are provided to the citizens who will gladly pay these taxes. But without the support of State Government it will not be possible to levy additional burden of taxes to the militancy ravaged City. There it is imperative for State Government to allocate adequate funds to ameliorate the basis civic amenities in the Srinagar City. Detail of income receipts of the proceedings year is given herein under:



Sr. No.

Head of Income

Year 2008-09








License fee



Infringement of Municipal Byelaws/Fines



Service Charges



Compounding fee






Offensive Trade



Refund, recoveries and Deposits



PWD/Works Division Receipts









Sanitation Fee




In addition to the above;

  1. An amount of Rs. 2.00 Crores is outstanding against Barat Sanchar Nigam Limited (BSNL) on account of license fee for 125 mobile Towers erected by them within Municipal Limits. Total number of 280 towers of various Private Telecom Companies stands erected with permission from SMC.

  2. A huge amount is not being recovered from traders for want of Govt. approval to the rules of offensive trade framed by SMC. Approximately Rs.2.00 Crores shall be generated as revenue if approval is accorded by the Govt.

  3. The fines imposed under Prevention of Food Adulteration Act (PFA) by the Municipal Magistrate are credited in Govt. treasury which needs to be reimbursed to SMC as was previously done.

  4. Proposal for imposition of property Tax to be framed in consultation with experts.

  5. An amount of Rs.1, 24, 209.44 is outstanding with M/S Helpline Advertising Services up to 2009-2010.

  6. An amount of Rs.95, 21, 000.00Crores is outstanding on account of rent with various Departments.

(Devolution Funds)Earlier the levying of Octroi was transferred to Srinagar Municipality by State Government in the year 1975. It constituted a major source of income to us and Srinagar Municipality was least dependent on State grant-in-aid. However, subsequently State Government decided to abolish levying of Octroi in the year 1987 without providing alternative sources of income to local body Institutions. As result Srinagar Municipality got financially wrecked and became total dependent on Gants-in-aid provided by State Government. The State Government is now providing Devolution Funds to the Srinagar Municipal Corporation in lieu of Octroi, share of Entertainment Tax and share of other taxes as per the recommendation of Municipal Finance Commissioner Report 2004. During the year 2008-2009 an amount of Rs. 58.34 Crores has beenreleased by the Government but this allocation is insufficient comparing to multifarious functions, civic amenities, execution of development work and to cater salary/wages bill of huge municipal staff. The Government is releasing Devolution Fund as 10% share of divisible pool taxes and same needs to be enhanced to 25 % so that adequate funds are allocated for developmental activity.

As per the provisions of Jammu and Kashmir Municipal Corporation act 2000, another State Finance Commission was constituted in the year 2001-02 under the Chairmanship of Mr. A.M Lankar which submitted its final report on 0-01-2004, and most of its recommendations are yet to be approved by the Government. The constitution of new State Finance Commission is now requirement of the time and also mandatory as per law.In order to make Srinagar Municipal Corporation a vibrant and an Institution of Local Self Government, the following suggestions are fit for the consideration of State Government:-

  1. For a better and coordinated action, Srinagar Municipal Corporation should be entrusted with the following functions along with the budgetary allocations and the staff. Integration of all services under one umbrella will improve the efficiency of these services and reduce the overall cost:

  1. Construction, maintenance, alteration, improvement of all public roads (excluding National Highway and roads of strategic importance), streets and lanes irrespective of their width and grade;

  2. Construction, maintenance of drainage, sewerage and all drains (drainage transferred partly);

  3. Water supply;

  4. Maintenance of public parks and gardens;

  5. Street Lighting.

  1. There should be proper coordination between the Social Welfare Department of the State and Srinagar Municipal Corporation for proper implementation and utilization of Social Welfare schemes of the State Government and centrally sponsored schemes e.g, poverty alleviation, physically and mentally challenged and weaker sections of the society.

  2. In the context of empowered and democratically elected Corporators, Srinagar Development Authority should work more as technical agencies that would advise Srinagar Municipal Corporation in the formulation of development plans rather function as parallel civic agencies and the assets raised by it should be transferred to Srinagar Municipal Corporation.

  3. The overlapping of the municipal functions such as maintenance of bus stands, parking lots, community centres etc, between the Srinagar Development Authority needs to be avoided by transferring /existing bus lots etc to Srinagar Municipal Corporation which will also fetch a sizeable income to Srinagar Municipal Corporation.

  4. The taxes, duties and fee listed in the Jammu and Kashmir Municipal Corporation Act can be imposed only with the prior approval or subject to any general or special orders/rules of the Government. The draft rules submitted for imposition of tax on land building needs to be approved.

  5. It is desirable to have proper fiscal arrangements which would assure the Srinagar Municipal Corporation to tape financial resources commensurate with its responsibilities laid down by law. In this context it is necessary to have a clear division of functional responsibility and relationship between the state government and the Srinagar Municipal Corporation in matters related to taxation authority, revenue sharing arrangement and the same need to be clearly defined and adopted.

  6. The process of the imposition of the tax on the consumption of energy needs to be processed and proceeds transferred to Srinagar Municipal Corporation.

  7. The Devolution Funds from the State resources should be classified under (1) Entitlements and (2) Grants in aid. The former should comprise (i) share in the divisible pool of specific state taxes, and (ii) proceeds of the assigned tax of local bodies, both levied and collected by the State. The later would broadly comprise (i) post tax devolution revenue deficit grant determined after a reasonable and fair assessment of the expenditure.


table “A”

S. No.


Account Head







Revenue generated Srinagar Municipal Corporations per year?

Internal receipts







Salary and Wages paid by the Corporation to employee annually

Salary wages












Financial Assistance provided by the State Government annually








Grants in aid

for development works)

  1. CCDP

  1. NSDP

  1. EWS.Dev.

  1. LCS

  1. URIF

  1. 12th FC

  1. Street Lights