The Hindu Business Line : Empowering urban local bodies to provide better facilities

With 30 per cent of the country’s population living in India’s 5,161 cities and towns, the plight of this segment, in general, and the problems plaguing them, in particular, ranging from provision of normal civic amenities to making their hectic pace of life hassle-free, assume crucial significance.

The ‘real’ India is no doubt found in the more than six lakh villages that dot the country but urban India is the face with which the country is identified for its growing status as an emerging economy that is trying to get into the developed country league by 2020.

No doubt, there are a dozen years ahead for India to get there but a reality check in terms of the state of play and the availability of amenities and opportunities in urban India unmistakably make future projections a somewhat complicated task.

Urban renewal mission

Realising the importance of giving a leg-up to urban dwellers, who admittedly deserve a better living conditions, given the rising contamination levels, both air and noise, the UPA government launched, on December 3, 2005, the Rs 50,000-crore Jawaharlal Nehru National Urban Renewal Mission (JNNURM) to address the fundamental problems of deficiencies in infrastructure and basic services to the poor in cities and towns.

With the enactment of the 74th Constitution Amendment Act, 1992, Urban Local Bodies (ULBs) have become a crucial third tier of government, after the Centre and the States. After one-and-a-half decades, the conditions of ULBs both in terms of functional and financial powers, have not distinctly improved. Most States are unwilling to recognise and make over funds, functionaries and functions to transform the ULBs into vibrant institution that address the local and grassroots concerns.

The financial position of ULBs, which is wobbly at present, needs to be beefed up to make them sustainable and facilitate them to bear additional responsibilities as envisaged by the 74th Amendment Act to Nagar Palikas. It is equally recognised that administration and management practices such as e-governance and accounting reforms ought to be in place so that they become autonomous and accountable to the people at large.

Two segments

The Ministry of Urban Development, which administers the JNNURM, has categorised it into two broad segments viz., the sub-mission on Urban Infrastructure Governance (UIG) and the sub-mission on Basic Services to the Urban Poor (BSUP), covering 63 cities comprising mega, metro, capital and cities of heritage and historical significance.

Other cities and towns are covered under the Urban Infrastructure Development Scheme for Small and Medium Towns (UIDSSMT) and the Integrated Housing and Slum Development Programme (IHSDP).

While the Central Government has gone about allotting the functions and management of the schemes as envisaged in JNNURM, it has also set forth two sets of mandatory reforms. Core reforms at the ULB/parasatal level aim at process re-engineering through use of appropriate technology to enable more efficient, reliable and timely services in a transparent way. The other set of reforms pertains to the State level.

The ULBs’ reform covers, among others, adoption of modern, accrual-based double entry system of accounting in urban local bodies/parastatals, introduction of system of e-governance using information technology, reform of property tax with GIS so that it becomes a key source of revenue for ULBs and arrangements for its efficacious implementation so that collection efficiency reaches 85 per cent within next seven years and levy of reasonable user charges by ULBs with the remit to cover full cost of operation and maintenance or recurring cost is collected in seven years.

Alongside, there is also internal earmarking within local body budgets for basic services to the urban poor and provision of basic services to urban poor including security of tenure at affordable prices, improved housing, water supply, sanitation and ensuring delivery of other extant universal services of the government for education, health and social security.

The Secretary, Ministry of Urban Development, Mr M. Ramachandran, told Business Line that “what we are trying to do is what needs to be done to empower the local bodies so that they have more resources/more leeway to provide services. One is the collection of water charges — whether it is drawing water or whether it is for a sewerage project; we have to charge something so that the project is sustainable after completion”.

State Finance Commission

He said that the States have been told to constitute a State Finance Commission every five years, where the local bodies could forcefully put forth their cases about what more should flow to them or what more sources should come to them so that they could benefit.

Thus, the onus is on the States not only to constitute the finance commission every five years but also accept the recommendations doled out by them for further devolution of funds, functions and functionaries to the local bodies.

Not only do the States need to ensure purposeful association/engagement of ULBs in planning function of parastatals as well as delivery of services to the citizens, they should on their own roll out a slew of reforms covering repeal of urban land ceiling and regulation act, and reform of rent control laws balancing the interests of landlords and tenants.

They should also work towards rationalisation of stamp duty to no more than 5 per cent in seven years, enactment of public disclosure law to ensure preparation of medium-term fiscal plan of ULBs and regular release of information to all stakeholders and enactment of community participation law to institutionalise citizen participation and bring about the concept of Area Sabha in urban conurbations.

A review of the performance of States in bringing mandatory reform for cities and State-level reforms reveals that in the former category, Hyderabad, Vijayawada, Raipur, Visakhapatnam, Raipur, Bhopal, Coimbatore and Madurai have instituted e-governance set-ups.

And a shift to double-entry accounting was done by Indore, Jaipur, Coimbatore, Madurai, Nagpur, Bhubaneswar, Chennai, Kolkata, Kochi and Vijayawada.

While cities such as Vijayawada, Chennai, Agra, Allahabad, Rajkot, Coimbatore and Madurai have ensured 85 per cent coverage in property tax, Vijayawada, Chandigarh, Agra, Allahabad, Lucknow, Vizag and Chennai have actually ensured 90 per cent tax collection efficiency.

While as many as 32 cities have instituted internal earmarking of funds for services to urban poor, 100 per cent cost recovery – O&M for water supply is successful only in Chennai and Vizag and 100 per cent cost recovery in sewerage management is done only by Vizag.

Considering India’s legions of cities, the record as of now appears none too encouraging on the mandatory reform front. In the case of optional reforms such as introduction of property title certification, revision of building by-laws (streamlining the approval process), mandatory rainwater harvesting in all buildings, by-laws on reuse of recycled water and introduction of computerised process of registration of land and property and earmarking 25 per of development land in all housing projects for economically weaker sections or low income group, the record is none the better, with a very few cities adhering to them.

Important reforms

What is shocking is that at the State level, only a dozen States have repealed ULCRA with Andhra Pradesh, West Bengal promising to do it this year and Jharkhand a year later.

While on reform of rent control, only Nagaland, Rajasthan and Karnataka have done so and on stamp duty rationalisation to 5 per cent, only Maharashtra, Assam and Sikkim have accomplished this.

Important reforms such as transfer city planning function and transfer of water supply and sanitation, have been carried out only by a handful of States, such as Assam, Chhattisgarh, Gujarat, Himachal Pradesh, Tamil Nadu, West Bengal, Madhya Pradesh, in the case of the former, and Chandigarh, Chhattisgarh, Gujarat, Haryana, Himachal Pradesh, Madhya Pradesh, Maharashtra, Tamil Nadu and West Bengal in the latter.

Even as the Centre is going ahead with signing Memorandum of Agreements with States to make the whole reform process integral to the release of grants under JNNURM, the initiatives rest with the States to autonomously alter their mind-set to devolve powers to the local bodies to make them a part and parcel of the integral whole that the State is.

But this requires political will, sagacity and far-sightedness among the growing tribe of State-level satraps who show absolute resistance to dilution of their powers and the shrinkage of their fiefdom.

Both panchayati raj bodies for rural India and Nagar Palikas for urban India languish notwithstanding the genuine efforts by the Centre to resurrect them through innovative schemes like JNNURM in the case of urban India and Bharat Nirman for rural India.

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