With reference to the funding of Municipal Corporations, consider the following 1. Property tax is one of the sources of revenue for the Municipal Corporation. 2. Property taxes typically constitute 90 % of the money a Municipal Corporation earns. 3. Taxes are also levied on education, amenities, and entertainment services like movies. Which of the statements given above is/are correct?

Correct Option The correct option is (c) 1 and 3 only. Explanation Municipal Corporations are established for the administration of big cities. To fund their operations and provide essential services, they are empowered to collect revenue through various taxes, user charges, and grants from the state government. The financial autonomy and revenue sources of these bodies are critical for urban governance. Statement-wise Analysis - Statement 1 is Correct: Property tax is a statutory tax levied on real estate, including land and buildings. It serves as one of the most significant sources of "own revenue" for Municipal Corporations in India. - Statement 2 is Incorrect: While property tax is a major component of the revenue, it does not constitute 90% of the total earnings. According to standard administrative data and on Urban Administration, property taxes typically constitute approximately 25% to 30% of the money a Municipal Corporation earns. The remaining funds come from other taxes, fees, and government grants. - Statement 3 is Correct: Municipal Corporations have the authority to levy taxes on various services and amenities. This includes taxes on education, water supply, and other amenities. Additionally, taxes or charges related to entertainment services (such as movie tickets or entertainment zones) fall under the purview of local revenue generation, although the structure has evolved with the introduction of GST. Key Takeaway Property tax is a primary source of own revenue for Municipal Corporations, typically accounting for 25-30% of earnings, not the vast majority. Municipalities also rely heavily on state government grants and other specific taxes like education and water taxes.

With reference to the funding of… - NCERT Class 6 Political Science MCQ

NCERT Class 6 Political Science — Chapter 5: Urban Administration

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With reference to the funding of Municipal Corporations, consider the following

Property tax is one of the sources of revenue for the Municipal Corporation.
Property taxes typically constitute 90 % of the money a Municipal Corporation earns.
Taxes are also levied on education, amenities, and entertainment services like movies.

Which of the statements given above is/are correct?

NCERT textbook question

From NCERT Social & Political Life I · Page 59

Options

A1 and 2 only
B2 only
C1 and 3 only
D1, 2 and 3

Did you get this right?

Solution

Correct Option

The correct option is (c) 1 and 3 only.

Explanation

Municipal Corporations are established for the administration of big cities. To fund their operations and provide essential services, they are empowered to collect revenue through various taxes, user charges, and grants from the state government. The financial autonomy and revenue sources of these bodies are critical for urban governance.

Statement-wise Analysis

Statement 1 is Correct: Property tax is a statutory tax levied on real estate, including land and buildings. It serves as one of the most significant sources of "own revenue" for Municipal Corporations in India.
Statement 2 is Incorrect: While property tax is a major component of the revenue, it does not constitute 90% of the total earnings. According to standard administrative data and on Urban Administration, property taxes typically constitute approximately 25% to 30% of the money a Municipal Corporation earns. The remaining funds come from other taxes, fees, and government grants.
Statement 3 is Correct: Municipal Corporations have the authority to levy taxes on various services and amenities. This includes taxes on education, water supply, and other amenities. Additionally, taxes or charges related to entertainment services (such as movie tickets or entertainment zones) fall under the purview of local revenue generation, although the structure has evolved with the introduction of GST.

Key Takeaway

Property tax is a primary source of own revenue for Municipal Corporations, typically accounting for 25-30% of earnings, not the vast majority. Municipalities also rely heavily on state government grants and other specific taxes like education and water taxes.

Your note

More from Chapter 5: Urban Administration

With reference to the Municipal Commissioner, which of the following statements is incorrect?

easy

Consider the following statements regarding the functions of a Municipal Corporation: 1. It is responsible for preventing the outbreak of diseases in the city. 2. It is prohibited from running schools and hospitals. Which of the statements given above is/are correct?

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Which of the following statements correctly distinguishes the role of Ward Councillors from that of the administrative staff in a Municipal Corporation?

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Property Tax, one of the major sources of revenue for Municipal Corporations, is typically determined on the basis of:

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Match List I with List II and select the correct answer using the code given below: List I | List II A. Property Tax | 1. Local body for smaller towns B. Sub-Contracting | 2. Privatization of garbage collection services C. Ward Committee | 3. Paid by people who own homes D. Municipal Council | 4. Body that debates city-wide issues

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