Different instruments of Value Capture Financing
Q. Which of the following are different instruments of Value Capture Financing (VCF)?
1) Land Value Tax
2) Betterment levy
3) Vacant Land Tax
4) Development charges- Published on 09 Nov 16a. 2, 3, 4
b. 1, 2, 4
c. 1, 3
d. All of the above
ANSWER: All of the above
- The different instruments of VCF are ; Land Value Tax, Fee for changing land use, Betterment levy, Development charges, Transfer of Development Rights, Premium on relaxation of Floor Space Index and Floor Area Ratio, Vacant Land Tax, Tax Increment Financing, Zoning relaxation for land acquisition and Land Pooling System.
- While Betterment levy and Development charges are being currently used to some extent in States, the other instruments also have substantial scope for resource mobilization.
- Traditional resource mobilization through direct sale of land, the most fundamental asset owned and managed by States and Urban Local Bodies is an inefficient form of resource mobilization and the Ministry is keen about land monetization more effectively though value capture.
- This innovative mechanism could also be used by central Ministries investing heavily in building national highways, railway projects, power generation and port infrastructure development.
