Municipal Administration India: Some Problem Areas

Scarcity of Financial Resources

The first and most serious problem facing the urban local bodies is the acute scarcity of finance. Generally, their sources of income are inadequate as compared to their functions. Their chief sources of income are the varied types of taxes. However, most of the income generating taxes are levied by the Union and state governments and, the taxes collected by the urban bodies are not sufficient to cover the expenses of the services provided. Though they can impose certain new taxes, the elected members of these urban bodies hesitate in doing so for fear of displeasing their electorate. The administrative machinery, at the disposal of these local bodies, is insufficient and ineffective. The staff, which is often underpaid, indulges in corrupt practices which leads to loss of income. Quite often, failure in collecting taxes leads to accumulation of arrears running into crores of rupees. As a result, many urban bodies are on the brink of bankruptcy. Financial stringency has become the biggest hurdle for almost all municipal bodies on account of the ever-increasing expenditure on establishment which has gone up to about 60 per cent of the income. Virtually no money is available for development work. Municipal committees of many small towns find it difficult even to disburse salaries to their employees on time. Many civic bodies have not been able to provide even the basic civic amenities in the areas which have been included in their jurisdiction during the last couple of decades.’ With the intention of helping the municipal bodies overcome their financial problems, some states have set up agencies which monitor the performance of municipal bodies and guide them regarding distribution of funds and in other financial areas. For instance, Kerala has setup the Kerala Urban Development Finance Corporation and in Gujarat, the Municipal Finance Board has been created. Such steps can be taken up in other states as well.

With their low capacity and willingness—because of the high political cost involved—to generate their own resources through taxation, the municipal bodies, dependence on higher authorities is substantial.

Abhijit Dutta suggests that a larger share of GNP should be routed through municipal government. He believes that, unless local government is treated as an important partner in the governmental system, reforms in local finances would be meaningless. The need remains of adopting a strategy of improving the overall management of municipal institutions and, in that process, concentrate on augmenting their financial resources through ingenious means.’ In this context, Raja J. Chelliah recommends improvement in the municipal planning so that the needs of the urban sector are effectively dovetailed into the overall national planning process.’

There is a great need for larger financial devolution to urban authorities. In the mid-eightees, the Planning Commission’s Task Force Group on Financing Urban Development had recommended that a certain percentage of the Central Corporate Income Tax and of the States’ Sales Tax, Profession Tax and Entertainment Tax, be passed on to the urban governments. But, these suggestions do not seem to have been convincing to the Central and state governments.

While great stress is laid on augmenting the urban authorities’ own financial resources, what is generally under-emphasized is that these authorities lack the requisite capacity to utilise their resources properly. Even the administration of local taxes is ineffective. Several studies, conducted in cities such as Calcutta, Delhi, Ahmedabad and Madras, on the administration of property tax reveal that the collections are often less than fifty percent. Toa great extent, this is on account of the ill-equipped and unmotivated staff in urban government bodies, a reference to which is being made separately. Chelliah advocates that the hands of urban authorities should be adequately strengthened to mobilise resources, take independent investment decisions and exercise a high degree of self-discipline. And, above all, the city-dwellers should be educated to realize that the urban services cost money and they should pay for them.

The system of municipal financial administration suffers from serious flaws. The system of accounting, as prescribed by the state government, is not followed strictly, leading to embezzlement, leakages and extensive under- assessment. In various municipalities, audit objections remain pending for many years and, in some, even audit is not conducted regularly. It is sometimes revealed by audit that the funds borrowed at a high rate of interest lie unutilised. Action is not taken on the audit report on time, with the result that, with the passage of time, no action can be taken.

Low Effectiveness

Because of inadequate finances, the local bodies have not been able to fulfill their obligatory functions. As a result, they suffer a constant outcry from the public as well as the government. The most basic necessity, water is not supplied properly, drainage facilities do not cover the entire city, unplanned colonies and slums develop fast, menace of stray cattle on the roads continues, traffic is hazardous, roads are not properly maintained and unsafe buildings are allowed to continue to exist despite the obvious threat to the inmates and the inhabitants of the area. In short, poor sanitation, poor hygiene and shortage of basic necessities make cities unsafe.

Excessive State Control

Next is the issue of the excessively strict control exercised by the state government over urban bodies. To ensure proper performance of their functions, the state government exercises legislative, administrative, financial and judicial control. This proves to be more of a curse than a boon, because, ii stead of providing guidance and support through the control mechanism, the control turns out to be negative, restricting the functioning of these bodies. Supersession, till 1992, was very arbitrary. Through this tactic the government not only meted out punishment to the elected councillors but to the citizens as well, depriving them of their elected institutions. Now, the Constitution 74th Amendment Act has taken away the power to supersede or suspend the municipal body from the state government. However, the state government can dissolve them. The financial control over the urban bodies has also been so rigid that they have virtually no autonomy left. When the control becomes too oppressive, the relationship of the state government with the urban bodies would naturally be strained. Hopefully, the situation will change because of the Constitution 74th Amendment.

Postponement of Elections

Elections to urban bodies have suffered constant postponement for indefinite lengths of time, for long after the term of an urban body has expired, the state government does not announce fresh elections and extensions are granted to the same body. To those bodies which have been superseded, elections are not held within the stipulated period. The state government’s builtin allergy for local elections stems from the reason that they become barometers of the political parties’ standing with the masses. The state government feels it safer and easier to deal with bureaucracy placed at the helm of the civic administration than with the popularly elected councillors and corporators. Municipal bodies which run on a system of graft and patronage, cannot stand scrutiny by elected bodies. The Constitution 74th Amendment has prescribed strict conditions in this regard with a view to ensuring regularity of elections.

Personnel Management

With the provincialisation of the municipal services, a lot of earlier defects in personnel management have been mitigated. Yet, the system of recruitment fails to bring in the best men. The need for adequate training of the municipal staff has not received due emphasis. The pay scales are not comparable with those of the state services and promotion opportunities are few. Several vacancies are not filled for years and transfers are effected at the free will of the senior bureaucrats and the government. In the sphere of transfers, corruption, favouritism and nepotism are rampant. In the case of most of the bodies, the state government is empowered to take disciplinary action and the urban body has very little control over its personnel. The municipal bodies have failed to attract qualified and competent personnel. Gujarat is one state where systematic efforts have been made with financial assistance from the World Bank, to study the staffing pattern of the municipal bodies and to assess their training requirements for urban development. The Gujarat Municipal Finance Board has entrusted several training institutes with the responsibility of training municipal personnel. Such measures can be initiated by other states as well.

A critical problem in municipal administration in India arises out of the co-existence of a variety of personnel systems within a single municipal authority, each segment being accountable to different control points within and outside the organization. At the lower level, one finds, generally, a separate personnel system but, at the higher level, there are ‘deputationists’, integrated and unified personnel systems as well as a separate system of staff of various gradations appointed by authorities at different levels. As Abhijit Datta comments: “This makes the municipal organization look like an onion in terms of personnel system, each segment rotating on its own path, without enmeshing for a common purpose or motivation.”

On the basis of an empirical study of municipal personnel system in Gujarat and Rajasthan, Ashok Mukhopadhyay observes that the unified personnel system cannot be said to have scored definitely over the separate personnel system. In fact, the basic issue is not the type of personnel system but its quality. For too long, the municipal services have been treated as ‘inferior’ services and, hence, have not attracted ‘superior’ talent. Therefore the need to improve pay scales, allowances, leave conditions, terminal benefits, career prospects, scope of self-improvement and incentives of the5e personnel in such a manner that competent and motivated personnel enter and stay in the municipal services. One of the devices for effecting these improvements is an innovative system of position classification that can rationalise the pay grads and privileges of the municipal personnel in terms of their duties and responsibilities.

Unplanned Urbanization

It is generally commented that the urban bodies have failed to perform their primary duty, that is, to check the problems and complications created by rapid urbanization. The shifting of a vast number of the rural population towards cities has led to several problems such as the unplanned growth of towns and cities. In the absence of proper planning, judicious use of land is not being made, colonies are set up without proper facilities such as schools, parks and hospitals, the growth of slums is not checked, there is a shortage of houses, traffic congestion is rampant and hardly any effective steps are taken to check urban poverty and unemployment.

Low Level of Participation

Due to an acute lack of civic consciousness, public participation in urban bodies has been negligible. The population of the cities consists of heterogeneous groups and they are alienated from one another. Most of the city population was once rural and, even now, it looks at the city merely as a place to earn a livelihood, and has little attachment with it. While one understands the reasons behind the low level of participation of the rural population in the management of their politico-administrative institutions, it is difficult to appreciate a similar, if not identical, phenomenon in the urban areas. Why is it that, despite a relatively higher level of literacy and educational standards, city-dwellers do not take adequate interest in the functioning of the urban government bodies? A perceptible apathy on their part towards participating in the governance system pushes such institutions into a state of complacency and irresponsibility. It is ironical that the urban population has rarely, if ever, raised its voice against cases of prolonged supersession of democratic municipal bodies.

The urban leadership also fails to inspire any confidence among the people and, once elected, they hardly visit their wards to learn about the gravity of the problems in their constituencies. Moreover the urban bodies do not have a proper public relations machinery, through which the achievements of the urban bodies can be communicated to the people.

In order to ensure the active participation of citizens, while taking decisions which affect their lives, it may be suggested that citizens’ groups should be set up on the lines of the practice existing in the USA, where “senior groups”, “Neighbourhood Committees” or “Citizens Committees” are set up. In India, people experience a lot of disappointment and inconvenience in obtaining civic amenities. As it is, most of them are so used to facing water, electricity and sanitation problems, that they feel that it is futile to look up to the urban bodies for any solution. Lastly, the multiplicity of special purpose agencies and other urban bodies confuses the public about their role boundaries.

Ineffective Leadership

Poor municipal leadership is yet another factor which has corroded the credibility of the urban bodies. The urban bodies, during their elections, fail to attract men of calibre, as the latter find a berth in State and Union Legislatures— more prestigious and profitable. Besides, the urban bodies have no original powers; they are appendage of the state government and their image is sullied often by charges of corruption and inefficiency. Evils of casteism and communalism are also rampant and all malpractices associated with a general election are present. The system of cooption is also misused. Deserving candidates are rarely coopted and this weakens the municipal leadership.

Structural Lacunae

A lot of criticism has been specially targeted at the single purpose agencies. They are all dominated by bureaucrats which goes against the basic philosophy of local government. The functions that have been assigned to them belong really to the elected urban bodies. They lower the prestige and significance of the local bodies. The municipal bodies have to contribute to the budget of these agencies while having no control over them. Their functions are often overlapping. For instance, in some states, the function of water supply has been entrusted to the Improvement Trusts as well as municipal bodies. This dual control has diluted the responsibility of each. The ordinary citizen also gets confused when he has to approach these organizations.

The urban governments have been afflicted with diffusion of authority, multiple committee system and tensions between the deliberative and the executive wings. The National Commission on Urbanization has rightly favoured clear specification of executive and deliberative powers and functions of urban government agencies.

In some large cities, a system of balanced distribution of executive authority between the Mayor and the Commissioner has been introduced. Another experiment in the form of Mayor-in-Council system has been introduced in the Calcutta Corporation. This system, designed to strike a balance between the executive and the deliberative authority, is yet to be evaluated fully.

The radical reform of setting up a two-tier city government in large cities was favoured by the Study Group on Constitution, Powers and Laws of Urban Local Government Bodies and Municipal Corporations as well as the National Commission on Urbanization, The former recommended the setting up of a metropolitan government above the municipal government, whereas the latter favoured a two-tier city government for settlements with populations above five lakh.

A multiplicity of agencies engaged in urban administration invariably leads to problems of co-ordination. In a medium-sized town like Jaipur, there are more than thirty government agencies engaged in administering urban development. And, even when an integrated authority, such as the Jaipur Development Authority (J DA), is created, the problem is not overcome entirely. There are always problems of interlinkage among the JDA, Rajasthan Housing Boa rd, Public Health Engineering Department, Rajasthan State Electricity Board, Jaipur Municipal Corporation and so on. Most of the inter—agency co-ordination, therefore, is effected at the level of the Secretary and the Minister for Urban Development, thus causing centralization and delays in decision making. Inter-organisational and co-ordinative mechanisms need to be promoted and used effectively.

Planning for Housing

There is a clear need to plan the development of towns and cities in a holistic manner. A city should be viewed as au organic whole and, hence, development of all its parts should be undertaken in an integrated and balanced manner. The incessant pressure of increasing population, caused mostly by migration from rural to urban areas, needs to be met by a planned strategy for urban development. Accordingly, regional economics and spatial planning need to be integrated with the overall urban governance.
Urban development should be viewed as an integral part of the total development process.

Lessons for Public Policy

In the light of the discussions in this paper, focusing on known principles and best practices of municipal finance reforms and citing the Hyderabad municipal reforms experience, we suggest the adoption of a three-pronged Urban Agenda for vitalizing our cities and towns, the engines of national economic growth. This agenda for urban sector reforms should deal with critical institutional aspects related to urban sustainability, issues of municipal organisation and local initiatives for improving the functioning of urban local bodies within the existing frameworks. The key institutional issues that need to be addressed include:

Creating a legal-institutional framework aimed at enabling the municipalities to function as institutions of self-government and implement plans for economic development and social empowerment;

Keeping the municipal functions clear and simple so as riot to demand highly specialised administration and skill and ensuring that those functions which greatly spillover beyond municipal jurisdictions are not assigned to municipalities;

Distinguishing between 'production' and 'provision' of public services and creating an enabling framework for public-private-people partnerships, privatisation and out-sourcing, where beneficial and feasible;

Following the broad (Bahl-Linn) principles of assignment of revenues (taxes, user charges, fees, shared revenues, grants-in-aid, borrowings, etc.) to balance municipal responsibilities with finances:

• Matching the benefit areas with the financing areas as far as possible and avoiding the assignment of taxes which can be easily exported to non-municipal areas;

• Most municipal functions being essential, adopting tax buoyancy and adequacy as the key criteria for choosing municipal taxes and according fiscal autonomy to the municipalities to the extent possible;

• Allowing the municipalities to fix their own tax rates; lower and upper limits, if any, may be prescribed 'by law';

• Simplifying property tax system adopting self-assessment scheme and providing for maintenance of property tax base adequately through indexing and regular valuation supported by appropriate legal safeguards;

• Fixing user charge for a service to equate the cost of its provision at the margin as far as possible;

• Addressing the objectives of equity and concern for the poor through subsidies targeted at the beneficiaries and not the services;

• Using specific benefit taxes and user charges for the provision of 'earmarked' services (water supply, in particular);

• Adopting "users pay", "beneficiaries pay" and "polluters pay" principles; fiscal instruments to address both direct and indirect beneficiaries.

• Making inter-governmental transfers including sharing of state taxes and grants-in¬aid formula based, not amenable to negotiation;

• Incorporating measures of optimal exploitation of 'own' taxes into the formula for transfer of funds from the central/state governments to the municipalities to incentivise local resource mobilisation;

• Providing a system of addressing the vertical fiscal gap of municipalities by ensuring better matching between revenue sources and expenditure responsibilities and the horizontal fiscal gap, by a suitably designed grants-in-aid system;

• Adopting borrowing and user finance as the primary sources of capital funding in municipalities;

• Establishing state level financial intermediary and endowing it with appropriate capabilities with a view to promoting market access to the municipalities for financing of infrastructure;

• Developing service standards, unit costs and cost centres for planning, programming, budgeting, and performance appraisal;

• Reforming budgeting, accounting and auditing procedures so as to promote accountability on the part of municipal officials and to decentralise budget management to operational levels;

• Enabling preparation of city perspective, development and annual action plans, capital investment plan and capital budget and making a clear distinction between capital and revenue budgets;

• Developing a transparent system of municipal accountability and disclosure to the public and the higher levels of government through laws and regulations;

• Developing laws and guidelines on information gathering, dissemination, budgeting, accounting, financial reporting, contracts, dispute settlement, design of user charges and grants, audit evaluation, etc., to fully inform the public about the consequences of municipal decisions;

• Enabling the public to have free information and full knowledge of the role of the service providers, the cost of the services, the sources of their financing and the distribution of responsibilities, keeping in view the Freedom of Information Act;

• Defining state-municipal administrative and fiscal relationships clearly on the principle of local autonomy without ambiguity and providing for state intervention in municipal affairs only in exceptional cases.

While institution-building measures as described above are critically important for the medium- and long-term, the Hyderabad Case Study suggests that improving internal capacity of the municipal organization in the short-term can be equally or even more promising. Agenda to build an efficient and effective municipal organisation and service delivery system may include the following:

• Clarity of vision, objectives and commitment to address the overall challenges of urban sector at the highest authority levels;

• Strong business culture to enhance efficiency. A combination of business-oriented culture and strong administrative leadership provides greater focus and clarifies accountability and capacity to take view of urban needs;

• Location of authority - a vital issue. Decision-making powers in the case a municipal organisation is highly fragmented; for improving efficiency of the municipal organisation there is a need for decentralisation of authority and a greater decision¬making capability at the grassroots levels.

• Financial management of a large public agency like a municipal organisation deserves integrated direction by managers with a professional training and commitment. Financial viability based on vigorous exploitation of the local revenue base and sound financial management cannot be compromised;

• Improving technical competence in the choice, design and execution of investment in infrastructure, and in its operation and maintenance;

• Improving human resources through training, process consultation, action research methods and role workshops;

• Improving responsiveness to the needs arising from urban growth, with the ability to plan development of the city and its services ahead of, or at least in pace with demand;

• Sensitivity to the needs of the urban poor, and a weighting of public interventions to promote their access to shelter, basic services and employment; and Concern for environmental protection, through public service provision and regulation of the private sector.

Leadership and teamwork are critical for any municipal organisation which manages scores of people: councilors, other political leaders, employees, planners, architects, engineers, contractors, businessmen, citizens, NGOs, CEOs, Neighbourhood Committee members etc. There is a need for effective leadership development and change management programmes to be undertaken for the municipal managers regularly.

The municipal reforms experience of Hyderabad city provides a number of lessons for improving urban management even within the existing frameworks without major institutional changes. These include:

1. Tax reform strategy depends to a great extent on the pre-conditions; but certain principles such as the close involvement of the taxpayer, tax-service linkage, incentives for filing of tax returns, disincentives for non-filing, tax education, etc. are important in the designing of successful tax reforms;

2. Arbitrary adoption of slab rates of tax in the name of elimination of discretion in the levy of tax is not desirable. Slab rates are useful in the case of homogeneous properties. But for heterogeneous properties such as commercial and institutional buildings, slab rates tend to be regressive. They over-tax properties with low rentals and under-tax those with high rentals as averages are affected by extreme items. This is against a fundamental principle of tax reforms, i.e. the market orientation of the tax system.

3. Correction of inequities in the tax system can be an important source of enhanced mobilization of tax revenues in most cities. Keeping tax rates low and emphasizing enforcement and compliance led to significant increases in the property tax collection in Hyderabad.

4. Tax education and organized publicity campaigns to address the psychology of taxpayers are often more important in realising the potential of property tax than economic factors such as tax rate and tax base; people must perceive the tax system to be fair and appreciate the linkage between tax and service provision.

JNNURM

To give a concrete shape to the UPA Government's vision which advocates a comprehensive approach on Urban Renewal and for improving the quality of life of the urban poor and to ensure basic services to the urban poor, the Ministry of Urban Development in collaboration with the Ministry of Urban Employment & Poverty Alleviation has already launched Jawahar Lal Nehru National Urban Renewal Mission (JNNURM) with specific sub-Missions, in the 63 identified cities, with tocus on development of Urban Infrastructure & Governance and Basic services to the Urban Poor. A set of basic services for the urban poor, inter alia, include security of tenure; improved housing; water supply; sanitation and dovetailing/convergence with schemes on education. health and social security. The Integrated Housing & Slum Development Programme (IHSDP) is another major initiative for providing housing & basic services to the urban slum dwellers in the country, in the cities other than those identified under JNNURM. Through JNNURM, it is proposed to put in place, on the fast track, a reforms driven, rights-oriented, demand-driven, community-partnering framework with focus on public private partnership models by involving all the key players. An amount of Ps. 50,000 crore has been earmarked as the Government of India's contribution in this massive task.

Street Vendors

Ministry has also initiated steps to provide and promote a more supportive environment to street vendors for earning their livelihood by holding a National Level Workshop with all the stakeholders including representatives of the State Governments, Vendor Associations and other Experts on the subject seeking their valuable suggestions/contributions with a view to make the National Policy for Urban Street Vendors more effective and implementable.

Ministry has also taken initiatives to professionalize the manpower handling SJSRY scheme in the areas of skill upgradation and entrepreneurship development by associating Entrepreneurship Development Institute of India (FA) Ahmedabad, in a major way.

Micro Credit Mechanism

Another initiative of the Ministry is to focus on the lack of access to formal credit to the urban poor who are primarily in the informal and unorganized sector. For this purpose, the Task Force on Micro Credit was set up to suggest possible strategies and solutions in working out a viable micro credit mechanism for the urban poor.

Another strategy of the Ministry is to set up a National Resource Centre at Mumbai/Pure to have a focus on the issues relating to urban poverty alleviation and related matters at the National level with continuous inputs and outputs on such issues involving policies /strategies/ progrannnes/projects as also networking, shariug and dissemination of information on Best Practices with all the stakeholders. Through UNDP project on the " National Strategy for the Urban Poor" the Ministry is in the process to work out a variety of workable strategies for alleviation of urban poverty in the country by involving all the stakeholders including NGOs and community based organizations by testing out the pilot projects in collaboration with them in the National capital Region (NCR) in association with the Delhi Government and at the National level in association with some of the state governments which will provide the inputs to the formulation of the Natioual Policy on Urban Poverty Alleviation in future.

Priyadarshini Project

Under the recently launched Priyadarshini project of the Ministry of Tourism, Government of India, Ministry of Urban Employment &Poverty Alleviation is working out the collaboration areas with reference to providing skill training to the women in employment generating activities in the Tourism Sector.
Through these strategies, conditions of the urban poor are to improve tremendously and the urban poverty ratio in the country will come down drastically.

An increasing share of on population now lives in urban India, notwithstanding the fact that India by and large still lives in villages. About 65 million persons were added to our urban population in the decade of the `90s alone. At this rate nearly fifty per cent of India will be living in cities by the earlier part of the present century.

Rapid nrbanization has not only outpaced infrastructure development, but has also brought in its train a terrible downside - the downside of proliferating slums, the downside of increasing homelessness, the downside of growing urban poverty and crime, of relentless march of pollution and ecological damage.

Recognising this challenge, the National Common Minimum Programme had stressed that the government initiate a process of urban renewal. The launch of the Jawaharlal Nehru National Urban Renewal Mission in the Capital by the Prime Minister Dr. Manmohan Singh on the 3rd December 2005 is a serious effort in that direction. The Ministries of Urban Development, Urban Employment and Poverty Alleviation, Planning Commission, State governments, urban local bodies and other experts have participated in the preparation of this Mission. This Mission is the single largest initiative of the Government of India for a planned development of cities.

This new Mission is named after Jawaharlal Nehru. Panditji, who used to refer to factories as the temples of modern India. The infrastructure created by Panditji has helped the process of industrialization enormously.

Focus On People

However, our cities have not been able to cope with the pressures of industrial development and the growth of the services economy. In many cities like Bangalore, the phenomenal growth of the services sector in the last decade has exerted unexpected pressure on urban infrastructure and services. Moreover, our vision of urban development has so far been uni-dimensional. The focus has been more on space and less on people. The need of the hour is to have an integrated framework, in which spatial development of cities goes hand-in-hand with improvement in the quality of life of ordinary people living there.

Governance Reforms

Governance reform should be seen as a massive catalyst for change. Shri Rajiv Gandhi had conceived, with great foresight, the 74th Constitution Amendment for decentralization of power to the urban local bodies. While considerable ground has been covered under the 73rd Amendment relating to Panchayats, an honest assessment would show that the 74th Amendment has not yet been effectively translated into improved urban governance.

Cities unfortunately with sonic exceptions, have not been enabled to look inward and build on their inherent capacities, both financial and technical, and instead are still being seen in many states as `wards' of the State governments. This should and this must change.
To tap technical resources, the Mission envisages the creation of a Voluntary Technical Corps in each city. A large number of urban professionals today want to contribute their skills for the improvement of their cities. Many cities like Bangalore, Mumbai, Thiruvananthapnram have cone up with citizen initiatives for urban renewal. This process would be strengthened through the creation of Voluntary Technical Corps.

Counting Urban Poor

A major failure of city governance has been our inability to address the needs of the poor. Basic services like drinking water supply, sanitation, housing and social services are not available to an increasing share of urban population. Countries in Latin America that have large cities in which more than 50% of the population lives, have addressed this problem through an effective system of property rights. Options like giving the urban poor land rights at affordable rates may see an increase in private investment. This in itself will improve the quality of living in the cities. The poor have to be increasingly made bankable. Property rights can be used as collateral for financing new investment in support of social development.

Services like education, health care and social security, the public distribution system and old-age pension are inadequately provided to the urban poor. While designated agencies exist in rural India to address these issues, urban local bodies have not oriented themselves to ensuring that these universal services reach the urban poor. The Ministry of Urban Employment and Poverty Alleviation has to work to ensure that basic services are indeed provided to the urban poor.

System Changes

The existing legal systems and systems of work and procedures, and the inability of local bodies to effectively use their powers and responsibilities, make it difficult to deal with the many problems facing our cities. 'The Jawaharlal Nehru National Urban Renewal Mission addresses the problems of law, systems and procedures reform and aims to align them to the contemporary needs of our cities and towns. The Mission seeks to do away with those statutes that inhibit the functioning of land and housing markets; it seeks to bring in those improvements that will enable the city-level institutions to become financially strong and viable.

That municipal finance is in an extremely unsatisfactory state is well known. This is on account of an inability to properly tap and utilize proceeds front property tax, due to the inadequacies of the property valnation system and inefficiencies in tax collection systems. Municipal governments are not able to recover the cost they incur in providing different services. 'They use accounting systems, which do not correctly reflect their financial position and therefore their projects do not become bankable and viable.

Property Tax Collection

This Urban Renewal Mission is designed to assist city governments in improving property tax collection and bring User charge to the levels that cover at least operating and maintenance costs and change their accounting methods. 'the Mission is meant to bring in transparency in local budget making, as also a higher degree of community participation in decision-making processes.

The success of the Mission will depend on its ability to enlist the support of a large number of partners and stakeholders. 'There is no shortage of finance in the infrastructure sector, especially if public-private partnership is sought- It is expected that State and local Government authorities will be able to draw tip programmes that can attract financial support from outside Government as well.

Historical Mission

The list of cities being covered initially under the Mission are some that arc important from the point of view of our national heritage, tourism potential and religious pilgrimage cities like VaraUasi, Aniritsar, Haridwar, Ujjain and many others. It would be a challenge before this Mission to see that these cities are restored to their historical glory. It is not to be forgotten that in the history of the world, Indians stand out as city builders as evident from the traditions of the ancient civilisations of Harappa and Mohenjadaro. Those cities were symbols of human engineering excellence in their own times. This Mission has the challenging task of making them come alive again.

  Go Back To Main Page