Municipal corporations across India are discovering a game-changer. Artificial intelligence is transforming how local governments collect property taxes. The Municipal Corporation of Gurgaon (MCG) and MCM demonstrate this transformation.
“MCG has generated Rs 200 crore revenue this financial year, which represents 72% of their FY24-25 target, according to officials.”MCM has collected Rs 29 crore so far this financial year, matching or exceeding their entire property tax revenue from the previous fiscal year.“
Traditional property tax collection faces multiple challenges in India. Outstanding dues pile up while manual processes remain inefficient. AI-driven collection offers municipal bodies a scalable solution.
“We are using AI to boost our property tax collection. We have so far collected a revenue of Rs 200 crore in this financial year. “Using AI, we generated Rs 95 crore revenue in July alone,” MCG Additional Commissioner Yash Jaluka told Times of India.
The system identifies residents with outstanding tax dues automatically. Generative AI bots contact property owners in real-time. These bots ask residents about payment difficulties they face.
MCG’s approach involves data segmentation before outreach begins. Officials categorize property owners into distinct groups—some promise to pay while others refuse completely. A third group faces genuine payment difficulties.
“We took the data of self-certified properties with the highest dues and used generative AI, which is a bot, to call the owners. This bot answers in real time. If you did not pay property tax, it will ask you what difficulties you faced and subsequently address your concerns,” Jaluka explained to reporters.
The bot provides personalized assistance for tax payment queries. Most contacted residents eventually paid their outstanding dues. This demonstrates the effectiveness of automated, empathetic communication.
“The AI model started as a pilot project in Yamunanagar. Sinha, who was the civic body commissioner, successfully replicated this system in Manesar and Gurgaon.”
“We successfully replicated the AI model in Manesar and Gurgaon, collecting Rs 29 crore so far, equal to the property’s previous fiscal year’s total tax revenue,” Sinha told media outlets.
This replication proves the model’s scalability across different urban centers. Other municipal corporations can adopt similar AI-driven collection strategies.
Increased revenue generation brings citizen expectations for better infrastructure. Residents demand visible improvements in city development and services.
The city lacks sufficient workforce and machinery to function effectively. MCG should learn from other municipal corporations and invest in appropriate machinery,” said Gauri Sarin, convener of Making Model Gurugram.
This feedback highlights a crucial challenge. Higher tax collection must translate into improved public services. Otherwise, citizen trust in AI-driven taxation may decline.
AI implementation in government tax collection creates precedents. Private businesses can learn from municipal automation strategies. The technology demonstrates clear ROI in revenue collection.
Companies managing subscription or service payments could adopt similar approaches. Automated, empathetic communication reduces payment defaults while maintaining customer relationships.
The MCG model shows AI’s practical application beyond marketing hype. Real-time query resolution and personalized assistance drive measurable results. This proves technology’s value when focused on specific problems.
For Indian businesses, the lesson remains clear. AI adoption works best when addressing concrete operational challenges. Revenue collection, customer service, and payment facilitation offer immediate benefits.
Municipal corporations nationwide are likely monitoring MCG’s success closely. The model’s replication across multiple cities suggests broader adoption ahead. This trend could reshape how local governments interact with citizens while improving service delivery across India’s urban landscape.
