Strengthening the Urban Local Bodies

In News 

Recently, it has been observed that there is a need to strengthen Urban Local Bodies.

About  Urban local bodies

• In India, local governments in cities are established in accordance with the 74th Amendment Act, which creates the ground for democratic decentralisation in urban areas. 
  • The Amendment gives state legislatures the authority to enact levies that support local government budgets. 

• This institutional framework comprises Urban Local Bodies (ULBs) that administer cities or towns with a specified population. 

• Types: Municipal corporations, municipalities, notified area committees, and town area committees are some types of urban local bodies.
• Functions: These local bodies are entrusted with functions related to welfare, public health and safety, infrastructural works, and other activities related to city development.
• State grants-in-aid provided to the municipalities and establishment of funds for municipal crediting and withdrawal of funds are some other ways mandated under the 74th Amendment act, through which adequate funding of municipalities is envisaged.

Issues and Challenges

• According to the Reserve Bank of India, financially starved Indian cities are unable to create the resources needed to offer their residents high-quality facilities and services. 
  • As a result, for instance, India’s access to basic urban infrastructure falls short of what has been accomplished in the OECD and other BRICS countries.
• The transfer of duties from the national and subnational governments to local governments has not always been accompanied by a corresponding transfer of financial authority.
• Moreover, municipal corporations in India rely heavily on subsidies from the Central and state governments to cover their spending needs because they have few other sources of income. 
• Over-reliance on property taxes has prevented local governments from fully utilising other revenue streams such as trade permits, entertainment taxes, mobile tower taxes, solid waste user fees, water fees, and value capture finance. 
• According to the report on municipal finances by the Reserve Bank of India, the aggregate budget size of the municipal corporations in India is significantly less than those of the Central and state governments. 

Initiatives

• The Ministry of Housing and Urban Affairs (MoHUA) supports States / Union Territories for formulation of master plans by issuing advisories and design standards, providing schematic interventions and financial assistance, etc.
• Under Atal Mission for Rejuvenation and Urban Transformation (AMRUT), a sub-scheme on formulation of Geographical Information System (GIS) based master plans for AMRUT cities is being implemented. 
  • This is a 100% centrally funded scheme with a total outlay of ?515.00 crores.

Suggestions 

• It is constitutionally required for state governments to establish means for ULBs to raise money. 
  • They should provide ULBs authority to impose taxes on behalf of municipalities and collect funds on their behalf. 

• the ULBs in India must increase their efficiency in collecting parking fees, advertisement taxes, user fees, lease rentals, and property taxes.
• As noted in the Sustainable Development Goal (SDG) 11: Sustainable Cities and Communities, an effective city government is essential for sustainable development. 
• In order to create inclusive, secure, resilient, and sustainable cities, national development strategies must be put in place.
• The focus should be on easing resource restrictions for the operation of ULBs when developing capacity for sustainable urbanisation. 
• Additionally, as a web-based e-governance system can be participatory and improve the effectiveness of local governments’ operations; its full potential needs to be investigated. 
• The range of e-services can be much expanded, despite recent initiatives by municipal corporations to establish web-based property tax payments being significant milestones in this direction. 
• Greater public participation and better public service delivery will be made possible by modernising local governance systems and getting them to work closely with local communities in accordance with a clear and effective administrative structure.
•  An effective local government can not only promote healthy urban growth but also ensure ease of living for the population.