Trade License, Overview.
Defination Trade License is a license issued by the municipal corporation which gives you permission to carry on the particular trade or business for which it is issued.
- BBMP Estimates that there are over 4 lakh establishments in Bangalore which require a trade license.
- The Min, Max, average and Median Trade license fees paid in Bangalore are Rs 20, 773200, 3734.93, 1200 respectively.
- BBMP collected a total of Rs 16 crores for the period under survey.
- At the median Rate BBMP has the potential to collect Rs 48 Crores
- If we consider the average the fee collection should be Rs 149.4 Crores.
Let us explore where this revenue leak is taking place.
- 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.
- 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. 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.
- This year(2016) 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.
The most striking feature in the map above is East Banglore which Includes the Whitefield and ITPL area and is supposed to be the biggest revenue source for BBMP is far far behind the rest of Bangalore in terms of trade license fees collection.
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.
We see that over 50% of Bangalore wards have not collected the trade license fees for the PG Homes in their Wards.
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 | Agrahara Dasarahalli | 105 | 1 | 6000.00 |
| 2 | Azadnagar | 141 | 1 | 3000.00 |
| 3 | Chikkallasandr a | 183 | 1 | 3000.00 |
| 4 | Ganganagar | 20 | 1 | 3500.00 |
| 5 | Gayathrinagar | 76 | 1 | 3500.00 |
| 6 | Hampinagar | 133 | 1 | 10000.00 |
| 7 | Herohalli | 72 | 1 | 3000.00 |
| 8 | Hongasandra | 189 | 1 | 3600.00 |
| 9 | Hoysalanagar | 80 | 1 | 3000.00 |
| 10 | Kadumalleshw ara | 65 | 1 | 3500.00 |
| 11 | Katriguppe | 163 | 1 | 3000.00 |
| 12 | Konanakunte | 195 | 1 | 6000.00 |
| 13 | Mahalakshmip uram | 68 | 1 | 3000.00 |
| 14 | Manorayanapa lya | 33 | 1 | 3000.00 |
| 15 | Moodalapalya | 127 | 1 | 3000.00 |
| 16 | Nagarabhavi | 128 | 1 | 3000.00 |
| 17 | Nayandanahall i | 131 | 1 | 6000.00 |
| 18 | Padmanabhan agar | 182 | 1 | 3000.00 |
| 19 | Peenya Industrial Area | 41 | 1 | 3500.00 |
| 20 | Shakthiganapa thi nagar | 74 | 1 | 3000.00 |
| 21 | Singasandra | 191 | 1 | 3500.00 |
| 22 | Sunkenahalli | 142 | 1 | 3500.00 |
| 23 | T. Dasarahalli | 15 | 1 | 3000.00 |
| 24 | Ullalu | 130 | 1 | 3000.00 |
| 25 | VishwanathNa genahalli | 22 | 1 | 3000.00 |
| 26 | Attur | 3 | 2 | 6000.00 |
| 27 | Dattathreya Temple | 77 | 2 | 9000.00 |
| 28 | Deepanjali Nagar | 158 | 2 | 6500.00 |
| 29 | Gandhinagar | 94 | 2 | 6000.00 |
| 30 | Girinagar | 162 | 2 | 9000.00 |
| 31 | Hosahalli | 124 | 2 | 7000.00 |
| 32 | Hosakerehalli | 161 | 2 | 6500.00 |
| 33 | Jayachamaraj endra Nagar | 46 | 2 | 6000.00 |
| 34 | Jayanagar East | 170 | 2 | 9000.00 |
| 35 | Kamakshipaly a | 101 | 2 | 6000.00 |
| 36 | Kengeri | 159 | 2 | 6500.00 |
| 37 | Lakshmidevina gar | 42 | 2 | 6000.00 |
| 38 | Maruthi Mandira Ward | 126 | 2 | 6500.00 |
| 39 | Maruthiseva Nagar | 59 | 2 | 9000.00 |
| 40 | Prakashnagar | 98 | 2 | 6500.00 |
| 41 | Radhakrishna Temple Ward | 18 | 2 | 6000.00 |
| 42 | Rajarajeshwari nagar | 160 | 2 | 6500.00 |
| 43 | Sarakki | 178 | 2 | 3500.00 |
| 44 | Shankaramata | 75 | 2 | 6000.00 |
| 45 | Srinagar | 156 | 2 | 9500.00 |
| 46 | Vasanthapura | 197 | 2 | 0.00 |
| 47 | Vasanthnagar | 93 | 2 | 6000.00 |
| 48 | Vijaynagar | 123 | 2 | 7000.00 |
| 49 | Yelahanka Satellite town | 4 | 2 | 6000.00 |
| 50 | Arakere | 193 | 3 | 8000.00 |
| 51 | Banasawadi | 27 | 3 | 6500.00 |
| 52 | Banashankari Temple Ward | 180 | 3 | 19500.00 |
| 53 | Begur | 192 | 3 | 12500.00 |
| 54 | Dr. Rajkumar Ward | 106 | 3 | 10500.00 |
| 55 | HBR Layout | 24 | 3 | 9000.00 |
| 56 | Hemmigepura | 198 | 3 | 10500.00 |
| 57 | Kottigepalya | 73 | 3 | 3500.00 |
| 58 | Mathikere | 36 | 3 | 10500.00 |
| 59 | Pattabhiramna gar | 168 | 3 | 12500.00 |
| 60 | Sampangiram nagar | 110 | 3 | 12000.00 |
| 61 | Sanjaynagar | 19 | 3 | 9000.00 |
| 62 | Attiguppe | 132 | 4 | 13500.00 |
| 63 | Bagalagunte | 14 | 4 | 9500.00 |
| 64 | Bommanahalli | 175 | 4 | 14500.00 |
| 65 | Gangenahalli | 34 | 4 | 15000.00 |
| 66 | Hebbal | 21 | 4 | 12500.00 |
| 67 | J.P.Nagar | 177 | 4 | 9500.00 |
| 68 | Jakkasandra | 173 | 4 | 10500.00 |
| 69 | Kacharakanah alli | 29 | 4 | 10500.00 |
| 70 | Nagapura | 67 | 4 | 12000.00 |
| 71 | Shanthala Nagar | 111 | 4 | 9500.00 |
| 72 | Yadiyuru | 167 | 4 | 13000.00 |
| 73 | Basaveshwara nagar | 100 | 5 | 18500.00 |
| 74 | Jnanabharathi ward | 129 | 5 | 14000.00 |
| 75 | Malleshwaram | 45 | 5 | 16000.00 |
| 76 | Adugodi | 147 | 6 | 16000.00 |
| 77 | Sudamnagar | 118 | 6 | 18500.00 |
| 78 | Vishweshrapur am | 143 | 6 | 20000.00 |
| 79 | Dharmarayasw amy Temple Ward | 119 | 7 | 27000.00 |
| 80 | HSR Layout | 174 | 7 | 17000.00 |
| 81 | Karisandra | 166 | 7 | 31500.00 |
| 82 | Shanthinagar | 117 | 7 | 14400.00 |
| 83 | Shivajinagar | 92 | 7 | 21000.00 |
| 84 | Aramane Nagar | 35 | 8 | 25500.00 |
| 85 | Hombegowdan agar | 145 | 8 | 17000.00 |
| 86 | J.P.Park | 17 | 8 | 25000.00 |
| 87 | Rajajinagar | 99 | 8 | 23500.00 |
| 88 | Basavanagudi | 154 | 9 | 45000.00 |
| 89 | Ganeshmandir a Ward | 165 | 9 | 41500.00 |
| 90 | Govindrajnaga ra | 104 | 9 | 24000.00 |
| 91 | Shivanagar | 107 | 9 | 25000.00 |
| 92 | Marenahalli | 125 | 10 | 35000.00 |
| 93 | Yeshwanthpur | 37 | 10 | 34000.00 |
| 94 | Shettyhalli | 12 | 13 | 44500.00 |
| 95 | Srirammandira ward | 108 | 14 | 44000.00 |
| 96 | Kumaraswamy Layout | 181 | 20 | 88500.00 |
| 97 | BTM Layout | 176 | 21 | 55000.00 |
| 98 | Lakkasandra | 146 | 34 | 108500.00 |
| 99 | Ejipura | 148 | 48 | 147500.00 |
| 100 | Koramangala | 151 | 48 | 154600.00 |
| 101 | Sudduguntepal ya | 152 | 51 | 163500.00 |
| 102 | Madiwala | 172 | 88 | 295500.00 |
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 collects Trade License from 6 theaters whereas Bookmyshow lists 93 theaters in Bangalore.
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%
The heads under which Trade License 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
In this report we cover the Trade license data over a 13 months period from Jan 2015 to Feb 2015 available from BBMP's website at http://bbmp.gov.in/trade-license
Note: For reasons best known to it, BBMP has stopped updating the Tradelicense data on its website.