ULBs Leading to Mohalla Sabhas

Even a layman on street realizes that Implementation and not policy formulation has been found lacking in the echelons of our systems at nearly every level. Of course “anarchist”,as some love to call themselves  would try to make us believe in multiplicity  “Ignorance ,Corruption and cronyism” as the reasons behind the lacuna of the system. Much can be debated on these lines as hardliners seem to becoming more and more rhetoric. One can argue for the sake that if the implementation was proper , “would the others cited occur?”.

 Truthfully speaking “Action Taken Reports” in administrative jargon brings a wry cynical smile even to “khakshar” like me. However one should realize that these ATRs are prepared by a different set of people whose primary job is to recommend and not implement. Strict enforcement  suggestion from within (i.e. ability to realize drawbacks and knowledge to improve) and incentives seem to be three ways for better implementation. Would be glad enough to acknowledge any fourth idea or suggestion. Believe me, the suggestion if forthcoming will not only help me in my job but will make be understand life in a better way.

 With some preconceived notions about administration or a so called “ aware” Indian Citizen an non-prejudiced analysis on devolution of power by state governments to Urban Local Bodies under recommendations of Finance Commissions is an ask. It certainly will have Cynical flavor  even  if one tries to be impartial.

 No state reached the limit of percentage of  the next tax proceeds to ULBs. In some states the allotment was nearly half of the proceeds as perceived by the First Finance commissions. Even the one time start up grant to different municipalities  was not forthcoming easily in some states. Most Second Commissions observed that some of the functions transferred to ULB were done without transfer. Even in  most of the functions where  budget was transferred , supervision was not transferred. The arrears of Devolution is piling up with the state governments in nearly all states.  Irony is that loan deductions from devolution in respect of Urban Local Bodies shall  continue unabated. The plea given by most state Governments is The payment of annuities will enable local bodies to get better credit rating thereby getting funds from the market at lower rates of interest.

 The financial health of each Urban Local Body may be analysed by reputed credit rating agencies to determine whether they can afford to bear further loan burden was recommended in many states by the third . However many Governments rejected this on gronud that Mostly Urban Local Bodies take loans from TNUDF/TUFIDCO.  When local bodies go for issue of bonds, they will be subjected to credit rating.

 Many state governments did not accept  separate sub heads in the Revenue Budget for collection of Land Revenue , Local Cess ,Local Cess Surcharge and detailed heads for the apportionment. The  cut off time of adjusting these heads of revenue were left open ended in nearly all states making the ULBs further vulnerable to debts and  poor performance.

 The system somewhat symbolizes  the Village money lender’s “khata”. The interest payable on the interest of mortgaged loans is sufficient to nullify the collateral.

 Abolition of Octroi ,which was the main component of Municipal Bodies has been done away with in most states. The recommendation to compensate the ULBs in terms of revenue sharing is like asking a hungry child to share his favorite Cake.

The importance of entertainment tax for the functioning of ULBs come next to Octroi. In case of Entertainment Tax , Interest on delay of dues to the ULBs were out rightly rejected by the State Governments  The prudence of the rejection and natural financial principles can not even bring a wry smile even on the optimists  Further smile wipe out was rejection of recommendation that the Entertainment Tax should clearly be exhibited in the Revenue Budget so as to cross verify the deduct entry under transfer to local bodies.

The creation of Ombudsman as recommended by Commissions were accepted in states like Kerela and Karnatka while most state Governments felt that the Inspector of Local Bodies was already performing it . 

Some Commissions recommended that  Commercial Taxes Department should  insist on issue assessment certificate every year after verification by Professional Tax clearance by local bodies was again not accepted by any state. The reason cited was “Collection of profession tax  is one of the  basic functions of concerned local bodies”. 

 The permission for change of land uses is granted for the integrated nonsaleable projects as permissible in the zoning regulations of that particular land use stipulated in the development plan after obtaining the requisite conversion charges.  At present this income is credited to the State exchequer in most states even after recommendations. Normally, an area up to a distance of 8 kms beyond municipal limits is declared as controlled area.  In case the owner of the land wants to change the use of land earmarked as controlled area,permission should be needed to be obtained from the Town  Planning of ULBs.

 System to “quantify  backwardness index of ULBs based on basis of Zakaria Committee was a good suggestion by many Finance Commissions” is gathering dust.

 Most of the municipalities are not in a position to perform core civic functions to satisfactory level due to their poor financial position

 Third financial commissions of many states recommended privatization of services like street lighting, solid waste management, construction/maintenance of toilets, garbage collection/disposal, street cleaning, maintenance of gardens/parks/playgrounds etc.  This measure proposed could  be cost saving and help improving the level of civic services.

One should have a look at the larger picture. The financial condition of states  who been somewhat pioneers in devolution to the ULBs.Debt-GSDP ratio of “major states who had attempted to delegate genuinely” during the five year period 1995-2000 was for Maharashtra (17.0%) Tamil Nadu (18.3%), Karnataka (20.4%). The interest payments as ratio of revenue receipts during the five year period 1995-2000  was for Tamil Nadu (13.8%), Karnataka (13.6%), Maharashtra (15.1%).

So improvements  from within (i.e. ability to realize drawbacks ,will and  knowledge to improve) and incentives seem to be the way left out for ULBs.

Still on cakes , it is evident that the ULBs will have to “bake their cake a bit” before getting state governments to delegate .If the baking  process seems right , creditors will automatically come.

Of course much has to be done within the ULBs and Mohalla Sabhas can be a catalyst to the change.

Change from root seems to involve less complexities and more pursuance.  The maladies are pin point specific .