Trade License, Overview.

BBMP collects annual trade license fees from some 55,000 traders.
By BBMP’s own admission it needs to collect fees from some additional 4 lakh traders.
As per SC 2% of a cities population should be allowed to ply their trade as street vendors, The data on this 2 lakh street vendors is missing.
An Analysis of Trade license data from 2015 shows that BBMP has either failed to collect or to report the collected trade license fees from traders in Mahadevapura and Yelhanka Zone. Data Available indicates they have collected 16 Crore from 40284 traders. We request BBMP to put the remaining data online.
The analysis of available Data shows that the reported fees collection is far less than the potential.
The average fees collected is 3317.2 targeting the missing 4 lakh traders would result in a total collection of at least 150.93 Crores.
This year BBMP has increased the fee rates (at least doubled for all categories, 4 times increase for a few category) So the potential collection for 2016-2017 will be 301.87 Crores

Click on the ward to get details of that particular ward.

We would expect gradual shift in earning from one ward to another. But instead we find a drastic change from ward to ward.

Q: Why is Shantala Nagar able to collect 1 Crore+ while Market areas like Malleshwaram (4 lakh), Shivaji Nagar(5 lakh),Chickpet(11 lakh), K.R Market(6 lakhs) collect less than a 10th?

Paying Guest accomodations in Bangalore

Areas in Bangalore which attract migrant population will typically have establishments which cater to their requirement, Shelter is one of the major requirement which is normally fulfilled by the Paying guest accommodation. As per the BBMP demographic analysis (http://rpubs.com/vijayvithal/ward-demographics) These PG Homes should be located around the Various Industrial and commercial hubs like Peenya, Electronic City, ITPL, Outer Ring Road(Sarjapur to KR Puram) and Hebbal

The mapping of the PG Homes does not reflect our expectation of where the PG Homes should be.

BBMP’s Trade license database reports 646 Paying Guest homes in 102 Wards. BBMP has either not collected the license fee or has not reported the collection in the remaining 96 wards

Examining the map in detail we find examples like
Kumarswamy layout with 20 PG Homes, with its neighboring wards having 0-3 PG Homes.
Madiwala with 88 PG Homes while it neighbor Jakkasandra has only 4 and Gurappanapalya has 0 PG Homes.

If we assume that proper identification of PG homes took place in wards with more than 10PG Homes then the average across Bangalore would be 32.45 instead of the current average of 6.33 PG Homes.

	Ward.Name	WARD_NO	NumPG	fees
1	Adugodi	147	6	16000.00
2	Agrahara Dasarahalli	105	1	6000.00
3	Arakere	193	3	8000.00
4	Aramane Nagar	35	8	25500.00
5	Attiguppe	132	4	13500.00
6	Attur	3	2	6000.00
7	Azadnagar	141	1	3000.00
8	Bagalagunte	14	4	9500.00
9	Banasawadi	27	3	6500.00
10	Banashankari Temple Ward	180	3	19500.00
11	Basavanagudi	154	9	45000.00
12	Basaveshwara nagar	100	5	18500.00
13	Begur	192	3	12500.00
14	Bommanahalli	175	4	14500.00
15	BTM Layout	176	21	55000.00
16	Chikkallasandr a	183	1	3000.00
17	Dattathreya Temple	77	2	9000.00
18	Deepanjali Nagar	158	2	6500.00
19	Dharmarayasw amy Temple Ward	119	7	27000.00
20	Dr. Rajkumar Ward	106	3	10500.00
21	Ejipura	148	48	147500.00
22	Gandhinagar	94	2	6000.00
23	Ganeshmandir a Ward	165	9	41500.00
24	Ganganagar	20	1	3500.00
25	Gangenahalli	34	4	15000.00
26	Gayathrinagar	76	1	3500.00
27	Girinagar	162	2	9000.00
28	Govindrajnaga ra	104	9	24000.00
29	Hampinagar	133	1	10000.00
30	HBR Layout	24	3	9000.00
31	Hebbal	21	4	12500.00
32	Hemmigepura	198	3	10500.00
33	Herohalli	72	1	3000.00
34	Hombegowdan agar	145	8	17000.00
35	Hongasandra	189	1	3600.00
36	Hosahalli	124	2	7000.00
37	Hosakerehalli	161	2	6500.00
38	Hoysalanagar	80	1	3000.00
39	HSR Layout	174	7	17000.00
40	J.P.Nagar	177	4	9500.00
41	J.P.Park	17	8	25000.00
42	Jakkasandra	173	4	10500.00
43	Jayachamaraj endra Nagar	46	2	6000.00
44	Jayanagar East	170	2	9000.00
45	Jnanabharathi ward	129	5	14000.00
46	Kacharakanah alli	29	4	10500.00
47	Kadumalleshw ara	65	1	3500.00
48	Kamakshipaly a	101	2	6000.00
49	Karisandra	166	7	31500.00
50	Katriguppe	163	1	3000.00
51	Kengeri	159	2	6500.00
52	Konanakunte	195	1	6000.00
53	Koramangala	151	48	154600.00
54	Kottigepalya	73	3	3500.00
55	Kumaraswamy Layout	181	20	88500.00
56	Lakkasandra	146	34	108500.00
57	Lakshmidevina gar	42	2	6000.00
58	Madiwala	172	88	295500.00
59	Mahalakshmip uram	68	1	3000.00
60	Malleshwaram	45	5	16000.00
61	Manorayanapa lya	33	1	3000.00
62	Marenahalli	125	10	35000.00
63	Maruthi Mandira Ward	126	2	6500.00
64	Maruthiseva Nagar	59	2	9000.00
65	Mathikere	36	3	10500.00
66	Moodalapalya	127	1	3000.00
67	Nagapura	67	4	12000.00
68	Nagarabhavi	128	1	3000.00
69	Nayandanahall i	131	1	6000.00
70	Padmanabhan agar	182	1	3000.00
71	Pattabhiramna gar	168	3	12500.00
72	Peenya Industrial Area	41	1	3500.00
73	Prakashnagar	98	2	6500.00
74	Radhakrishna Temple Ward	18	2	6000.00
75	Rajajinagar	99	8	23500.00
76	Rajarajeshwari nagar	160	2	6500.00
77	Sampangiram nagar	110	3	12000.00
78	Sanjaynagar	19	3	9000.00
79	Sarakki	178	2	3500.00
80	Shakthiganapa thi nagar	74	1	3000.00
81	Shankaramata	75	2	6000.00
82	Shanthala Nagar	111	4	9500.00
83	Shanthinagar	117	7	14400.00
84	Shettyhalli	12	13	44500.00
85	Shivajinagar	92	7	21000.00
86	Shivanagar	107	9	25000.00
87	Singasandra	191	1	3500.00
88	Srinagar	156	2	9500.00
89	Srirammandira ward	108	14	44000.00
90	Sudamnagar	118	6	18500.00
91	Sudduguntepal ya	152	51	163500.00
92	Sunkenahalli	142	1	3500.00
93	T. Dasarahalli	15	1	3000.00
94	Ullalu	130	1	3000.00
95	Vasanthapura	197	2	0.00
96	Vasanthnagar	93	2	6000.00
97	Vijaynagar	123	2	7000.00
98	VishwanathNa genahalli	22	1	3000.00
99	Vishweshrapur am	143	6	20000.00
100	Yadiyuru	167	4	13000.00
101	Yelahanka Satellite town	4	2	6000.00
102	Yeshwanthpur	37	10	34000.00

Data corelation with secondary source of information.

While an establishment may not declare itself to BBMP, or the BBMP official may not have the motivation to survey each ward and identify different kind of establishments, multiple private entities have a good quality dataset regarding establishments in specific sectors. These datasets are created by using dedicated field staff who visit evaluate and rate establishments also the establishments voluntarily share data with these entities as it drives business.

e.g.

Restaurants are registered with online food portals.
Hotels are registered with travel portals.
Doctors and clinics are registered with health portals
Portals like JustDial have a database across multiple business segments.

A comparison of some of the data from these portals with BBMP’s Data is as below.

Hotels

Travel portals list about 1070 Hotels in Bangalore. This does not include the smaller boarding and lodging units.
BBMP’s Trade license data shows that Bangalore has
649 lodging units. i.e. atleast 39.35% units are missing from BBMP trade license dataset
783 PG Units i.e. 4 PG Homes per ward. Visual inspection and the scourge of PG Home pamphlets on every street indicates a different picture. Check below for a detailed analysis of PG Houses
306 Choultries, Marriage halls, Party halls, convection centers etc across Bangalore. i.e. approx 1.5 per ward. JustDial lists 319 Kalyan Mantap’s in Bangalore. Every other medium size restaurant in Bangalore has a party hall. Religious institution also double up as marriage halls. So the actual collection under this head should atleast double

Where is the Building Mafia and the Water Tanker Mafia?

BBMP Has a category of Construction materials(brick, sand, cement, roofing etc. ) under which only 81 Traders are registered.
Similarly there is only one registered Water Tanker operator in Bangalore.

Other gross Errors…

13 Firework wholesale/retail units are listed. Every Diwali we have at least 4-5 fire cracker shops in our layout averaging to approximately 20 shops across the ward. Extrapolating this, we should have around 4000 shops across Bangalore
BBMP lists 6 theaters whereas Bookmyshow lists 93 theaters.

Conclusion

Revenue Leakage

We have identified 6 types of revenue leakage in BBMP’s System

Units who do not pay.
Units which are mis-classified and pay at lower rate.
Units who pay but are issued fake challan.
Reuse of the same DD number for multiple units in the system
Non-remittance of the amount collected to the proper account.
Delayed remittance of the amount collected to the proper account.
Non reversal of Bounced cheque transaction in the system.
Manipulation of due amount in the system backend.

The first two require a collusion between the citizen and the BBMP revenue officer. The collusion may require something as simple as BBMP officers neglecting their duties for this type of leakage to take place. or it may be as worse as the BBMP officers being active participants and advisors to the citizens in this evasion scheme.

The third, fourth, fifth and sixth can be addressed by eliminating the need for the citizen to interact with the BBMP officials. Direct online transfer can address this issue. Merging the old records in the new system and enabling online payment of past dues is also required to curb this set of leakage.

The seventh type of leakage can be detected by regular reconciliation of BBMP accounts with the corresponding bank.

The eights type of leakage can be addressed by auditing the tax/fees computation and tax/fees collection systems.

Recommendation.

In accordance with Section 4-1b xiii of the RTI Act BBMP should proactively and regularly declare on its website the details of the permits, concessions and authorization granted by it. This should go beyond just the trade license and also include construction permits, occupancy certificates etc.
An audit of the trade license fee collection in Mahadevapura and Yelhenka zone should be conducted to understand why the collection is so low and the correct figures should be published in the public domain.
A Trade License collection drive in all major market and commercial areas of Bangalore should be launched.
Comparison of the Hotel data from the travel sites to BBMP’s internal license data should be done and demand notice should be issued to those units operating without proper trade license.
The location of kalyan mantapa’s should be extracted from the marriage registration database and demand notice should be issued for all places where marriage was conducted
Demand notice should be issued to all restaurants sporting a party hall.

Appendix

Extrapolating this data to Property Tax

Residential Units

The city population is currently estimated to be over 1 crore.
This translates to over 25 lakh residential units (average family size of 4 as per census)
As per BBMP there are over 16 lakh residential properties in Bangalore.
Last year BBMP Collected property Tax from 10 Lakh residential properties.
BBMP’s revenue loss from residential properties is between 40-60%
As per our sources while over 2 lakh residential units were built from 2010 to 2015 only 95 Occupancy certificates were issues.

Commercial Units.

Trade license

The heads under which fees are collected are.

	V1
AERATED WATER, SOFT DRINKS & BOTTLED WATER	184
ALCOHOL AND SPIRITS	44
ALL FOOD ARTICLES INCLUDING SPICES, CONDIMENTS STORING PACKING, PRESSING,CLEANING, PREAPARING O MANUFACTURING OR SALE (PROVISION STORES) V	1
ALL FOOD ARTICLES INCLUDING SPICES, CONDIMENTS STORING PACKING, PRESSING,CLEANING, PREAPARING OR MANUFACTURING OR SALE (PROVISION STORES)	3729
AUTOMOBILE BATTERY MANUFACTURING AND STORING	4
BARBER SHOPS,HAIR DRESSING SALOON, BEAUTY PARLOR, MASSAGE PARLOR	1513
BATTERY RECONDITIONING AND SERVICING	16
BEEDIES PROCESSED IN FACTORY	17
BLOOD STORING, PACKING, PROCESSING ETC	268
BOARDING & LODGING TO WHICH THE PUBLIC ARE ADMITTED FOR REPOSE OR LET WITH OR WITHOUT CONSUMPTION OF ANY FOOD OR DRINK	1504
BOARDING & LODGING TO WHICH THE PUBLIC ARE ADMITTED FOR REPOSE OR LET WITH OR WITHOUT CONSUMPTION OF ANY FOOD OR DRINK 1	1
BREAD,BISCUITS,PASTRY CONFECTIONARY AND SAVORIES	2828
CAMPHOR PREPERATION, MANUFACTURING	5
CANDLE PREPERATION, STORAGE OR SALE	2
CATGUT, FAT, BONES, TALLOW, MEAT FISH OIL AND LIKE	43
CATTLE FEED	11
CHARCOAL ,FIREWOOD	12
CHEMICALS & PESTICIDES OF ALL KINDS MANUFACTURING, MIXING, STORING SELLING WITH	102
CHOULTRIES,MARRIAGE HALLS, CONVECTION CENTRE	306
CONSTRUCTION /MATERIALS	81
COTTON, WOOL , JUTE	11
DIAGNOSTIC LABORATORIES	535
DRY CLEANING AND LAUNDRY	59
DYEING & PRINTING UNITS	25
EDIBLE OIL STORING,PACKING ,PRESSING, CLEANING, PREPARING OR MANUFACTURING	151
ENTERTAINMENT	4
FIREWORKS	13
FOUNDRY OF ALL KINDS WHERE NUMBER OF EMPLOYED	5
FUEL STATIONS AND FUEL STORAGE	34
FURNACE OIL, TRANSFORMER OIL, LUBRICATING OIL GREASE SOLVENT OIL COOLANTS	39
GAS STORAGE FILLING FOR RETAIL DISTRIBUTION	20
GOLD SILVER REFINING COMMERCIAL SPACE	97
GRANITE, MARBLE AND CUDDAPAH STONE PROCESS AND CUTTING UNITS OR STOCKING	23
HORSE POWER	16207
HOTELS, RESTAURANT AND ALL ESTABLISHMENT SERVING/SELLING/STORING FOOD, BEVERAGES OR ALCOHOL	5679
ICE, ICECREAM & CANDY	328
LICENSE RENEWAL FOR THEATERS	6
MANUFACTURE OF PAINT,LACQUERS AND SHELLAC	37
MILK AND MILK PRODUCTS STORING & SALE	68
NURSING HOMES AND HOSPITALS	1131
OTHER NOT INCLUDED IN THIS LIST BUT REQUIRING BBMP’S NOCS	26
Others	4
PACKED FOODS	36
Polyclinic with Speciality Service	1
PREPARING STORING AND PACKING OF GHEE	23
SOAPS, DETERGENTS & DISINFECTANTS INCLUDING SEEGEKAI MANUFACTURING	37
TAR STORAGE FOR SALE	1
TEA	8
TIMBER STORING AND SALE	151
TRADE - ALL FOOD & NON FOOD ITEMS NOT SPECIFICALLY MENTIONED UNDER PART I TO PART 0	1
TRADE - ALL FOOD & NON FOOD ITEMS NOT SPECIFICALLY MENTIONED UNDER PART I TO PART V	12774
TRADE - ALL FOOD & NON FOOD ITEMS NOT SPECIFICALLY MENTIONED UNDER PART I TO PART V s	1
WATER TANKERS	1
WELDING AND ELECTROPLATING	12

Missing Items

The following heads have no receipts..

Canteen in industries/hospitals etc.
Heads for building material (lime,cement, sand, stone etc.)

3rd Party sources

Make My Trip

Make my trip reports 1070 hotels in Bangalore
39 5 star hotels
57 4 star hotels
261 3 star hotels
121 2 star hotels
300 1 star hotels

Zomato

Zomato lists 8000+ restaurants in Bangalore

JustDial

JustDial has 319 listings under Kalyan Mantapa. This will not cover the smaller party halls attached to restaurants.

Explore this dataset.

The script and dataset used to create this analysis are available at https://github.com/DataDrivenPolicy/BBMP-Finances

Review of BBMP Finances, Part 1 Trade License

Vijayvithal

April 28, 2016