Accelerating Revenue Mobilisation through Digital Public Infrastructure (DPI)
A Case from Andhra Pradesh, India where a Property tax DPI led to significant revenue growth
Overview
Revenue mobilization through taxation is essential for thriving countries and cities, particularly in low-income countries with limited resources, for investing in human capital and infrastructure. These investments foster resilient and inclusive growth by funding essential public services like healthcare, education, infrastructure, safety, and social welfare. Property taxes are a key revenue source for development initiatives, but governments often struggle with administrative capacity, outdated technology, and a shortage of skilled personnel, hindering effective tax collection and revenue management. The Digital Public Infrastructure (DPI) approach solves for scalability, ease of use, and data integrity by providing a standardized platform upon which new services and applications can be built unlike traditional methods requiring bespoke solutions. DPI streamlines government operations, reduces redevelopment needs and ensures strategic control over software and data through existing infrastructure, open standards, and APIs.
Objective
Andhra Pradesh, a state in India with approximately 84 million residents as of 2011, underwent significant urbanization, driven by rapid industrialization and rural-to-urban migration. Facing challenges and opportunities in managing its growing urban landscape, the government of Andhra Pradesh initiated various programs in 2016 to enhance public service delivery and digitization. The efforts reflected a need for digital transformation in governance essential for revenue mobilization and responsive public service delivery.
Product
Property Tax
Property tax revenue surged from approximately $69 million in FY16 to $249 million in FY23
+260%
Date
2016 to present
Digitization increased total coverage to 3.87 million properties by FY23 in
Andhra Pradesh
+96%
Practice Area
Local Governance
The amount of tax dues collected within the first quarter itself is due to early rebates for citizens
+35%
The Challenges
Legacy system
In 30 cities, the tax collection systems were paper-based, in 77 outdated technology, and scalability issues in 3 due to multiple vendors. Integration difficulties with discrepancies in managing registers added to inefficiencies.
Data silos
Stand-alone systems impeded information sharing while manually prepared data posed a severe challenge in accessing quality data for performance tracking and decision-making. The systems were built with governmental operations in consideration.
Delayed demand generation
Varied bill distribution schedules and manual processes, compounded by delays in updating property registers due to city expansions, hampered revenue collection, and operational efficiency in property tax systems.
Poor compliance
Inadequate adherence to operational requirements and municipal regulations led to the deployment of inappropriate software applications, with varied interpretations of municipal acts resulting in poor compliance.
Solutions
Engagement Model
A Steering Committee, led by the head of municipal administration and eGov, supervised the process. Key players included a system Integrator for rollout and training, a Cloud Service Provider for hosting, a team of Property Tax Experts for driving changes, and a Nodal Officers Team for monitoring.
DPI implementation
The tax management system used a strong registry, friendly design, and Open APIs for integration. Service and complaint access points, such as call centres, web portals, and apps were combined allowing citizens to use any channel. The registry made connecting services like water and power better
Capacity-building
Initiatives were undertaken, from grassroots workers to senior-level bureaucrats, through user manuals, workshops, interactive training sessions, and on-the-job support to empower public servants in driving the state’s vision. This resulted in saving time and resources and minimising potential disputes.
GIS Integration
In 2017, a comprehensive GIS-based survey was conducted to ensure the inclusion of all properties in the registry. The tax system built on DIGIT integrated with Survey Applications, GeoServers, Finance systems, and dashboards to enhance tax coverage statewide, offering visibility across defined processes.
