Sample Material of Current Public Administration Magazine

Polity, Constitution and Governance

The Fourteenth Finance Commission and Urban Services

The 14th FC need to address a comprehensive agenda like infrastructure provision, improved service delivery, strengthening ULB resources and improving governance. Empowering state finance commissions is also the need of the hour. The agenda includes:

• prioritise core services—water supply, sewerage, sanitation and storm water drains—and provide grants-in-aid to ULBs to ensure their provision in two decades;
• include access to services to the poor as one of the indicators under SLB;
• institutionalise SLB notification by all ULBs;
• work out a formula for estimation of ULB finance needs based on service delivery gaps vis-à-vis benchmarks, transfers of state governments and revenue mobilising efforts of ULBs;
• substantially increase grant-in-aid as well as percentage of performance grant to improve service delivery by ULBs;
• review, deepen and take forward the incentive based grants initiated by the 13th FC to improve municipal performance; service delivery in particular. It should consider increasing the incentive based grants. Die-hards would argue that it makes inroads into local autonomy, but looking at the lackadaisical attitude of state and local governments over years, it looks imperative; and
• other reforms include service delivery regulation to protect the interests of consumers including the poor and service providers and to ensure sustainable services with equity, reforms in accounting and audit systems being recommended by FCs and SFCs, development and updation of urban data on different dimension of municipal performance including services, finances, governance and other performance indicators to provide a basis to FCs and SFCs to assess the service and resource gap, strengthen organisation and working of the SFCs, developing norms for the constitution of ULBs.
• Introduce strong monitoring and evaluation system to measure the efficiency and efficacy of investments.

CONCLUSION

The ULBs have been getting ad hoc grants-in-aid from FCs and SFCs which do not meet growing urban infrastructure and service delivery needs. There are many reasons for this including weak SFCs, absence of benchmarks and data base on services, lack of professionalism and weak municipal capacities, etc. With benchmarks in place for core services and availability of data from Census and SLB notifications, ad hoc approach
should give way to need and formula based approach. This paradigm shift is essential to address the changing demographic challenges. The 14th FC need to work out grants-in-aid formula based on cost of services which should also include ULB and state efforts. The 13th FC approach of performance based incentives to the local bodies should be taken forward and the conditionalities should be reviewed and deepened along with improving the capacities of municipal functionaries to bring professionalism into municipal governance. The SFCs need to be strengthened and they should also adopt performance based than ad hoc approach to allocate grants. Effective service delivery is part of wider urban governance reforms. Only such measures enable the local bodies to improve their finances, strengthen governance, and deepen the democratic decentralisation. This
is an opportunity which 14th FC would miss with consequences to urban development and India’s urban future.

(Source- D. RAVINDRA PRASAD AND V. SRINIVAS CHARY @ IIPA Journal)
 

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