Dhaka's New Service Bill Could Leave Millions Behind in Informal Areas

Bangladesh's national parliament is advancing a draft Urban Service Delivery (Accountability and Decentralisation) Bill, a sweeping piece of legislation that would restructure how Dhaka North City Corporation and Dhaka South City Corporation plan budgets, collect fees and respond to residents' complaints. If passed in the current parliamentary session, the bill's core provisions would take effect from 1 January 2027. The legislation directly affects an estimated 22 million people living within the two corporations' combined jurisdictional area, touching everything from footpath maintenance and drainage to solid waste collection schedules.

The push to reform city corporation governance follows years of documented failures in service delivery. A 2024 audit by the Comptroller and Auditor General of Bangladesh found that both corporations collectively left more than 3.8 billion taka in allocated development funds unspent in the 2022-23 fiscal year, largely because procurement processes moved too slowly. That figure, cited in parliamentary committee testimony earlier this year, has become the central justification for the bill's new accountability clauses, which would allow the Local Government Division to withhold annual block grants if a corporation's capital budget utilisation falls below 60 percent by the end of each financial year.

What the Bill Actually Changes for Dhaka Residents

For most middle-income households in areas like Mirpur, Mohammadpur and Badda, the most immediate change would be a restructured holding tax assessment system. The bill proposes linking holding tax rates to a published property value index updated every three years, replacing the current discretionary ward-level assessments that advocacy groups and the Bangladesh Institute of Development Studies have both described as inconsistently applied. The government says the new system will broaden the tax base without raising marginal rates for existing registered properties. Residents who currently pay low taxes on unregistered or under-assessed properties, however, are expected to see bills rise.

The bill also mandates a citizen complaint portal with a 30-day mandatory response window, backed by a penalty mechanism for corporation officials who fail to acknowledge grievances. Local advocates note that, on paper, this creates a formal accountability loop that does not currently exist. The harder question is enforcement. The penalty provisions delegate oversight to a ward-level grievance committee whose members would be appointed by the same corporations they are meant to scrutinise, a structural tension that policy analysts say could limit the mechanism's practical reach.

Residents in lower-income areas and the city's estimated 4,000 informal settlements face a more mixed picture. The bill includes a Slum Upgrading and Infrastructure Fund seeded with 500 million taka for the first fiscal year, targeting improved drainage, tube-well access and footpath lighting in areas currently outside formal ward service maps. But the fund's eligibility criteria, as drafted, require a settlement to be registered under the Dhaka Structure Plan 2016-2035. Many older, denser slum clusters in areas such as Korail and Kamrangirchar are not registered under that plan, meaning they could be excluded from the first round of disbursements even though their infrastructure deficits are among the most severe in the city.

Funding, Timeline and What Comes Next

The bill's financing relies on a combination of increased central government transfers and projected growth in the corporations' own-source revenue. The government says the policy will generate an additional 6 billion taka annually in holding tax receipts once the updated valuation index is fully implemented by the 2028-29 fiscal year. Independent budget analysts caution that projections of this kind have consistently overshot in prior reform cycles, pointing to a 2019 holding tax modernisation drive that yielded roughly 40 percent of its projected revenue gain in its first two years.

The parliamentary standing committee on local government is scheduled to submit its clause-by-clause review to the full parliament by 31 July 2026. If that timeline holds, a floor vote could occur before the current session closes in September. Dhaka residents, ward councillors and civil society groups have until 20 July to submit formal comments through the Ministry of Local Government's public consultation portal. The next step after any passage would be a gazette notification followed by corporation-level implementation rules, a process that historically takes between six and eighteen months to complete.