74th Constitutional Amendment

8/8/2019 74th Constitutional Amendment

1/43

Review of the Implementation of 74th Constitutional Amendment Act

A Case of Gujarat

Presented by:

Prof. Madhu Bharti

Ms. Bindu P.

Faculty of Planning and Public Policy, CEPT University

Ahmedabad38 00 09.

APSA 2007, Colombo


2/43

STRUCTURE OF THE PRESENTATION

BACKGROUND

KERALA EXPERIENCE

IMPLEMENTATION IN GUJARAT

STUDY AREA

EMERGING ISSUES

POLICY OPTIONS


3/43

BACKGROUND


4/43

INDIA

Total Population : 1.03 billion (2001)

Urban Population : 28% of total

population

Area : 3179012 sq.km.

Population Density : 324

persons/sq.km.

Total number of States : 35

and Union Territories

Total number of Districts : 593

Total number of Sub Districts: 5564

Total number of Urban : 384

AgglomerationsTotal number of Towns : 5161


5/43

EMPOWERMENT OF LOCAL GOVERNMENT-THE RISING NEED..

350 % increase in urban population over

past four decades.

Projected urban population 410 million by2011 and 550 million by 2021(NIUA 2000)

Unplanned &uncontrolled growth of towns -

immense pressure on ULB

Local governments face difficulties in

meeting their expenditure

15%-95% of state government transfer

discretionary and often distorted.

Need to strengthen governance at local level decentralize to reduce state control

Functional & Financial empowerment of ULB leading to increased local autonomy

URBAN SECTOR GROWTH IN INDIA

0

5

10

15

20

25

30

35

40

45

50

1961 1971 1981 1991 2001

YEAR

%

GROWTH

% of Urban Population to Total PopulationDecadal Urban growth rate(Percent)

THE 74THCAADECENTRALIZATION INITIATIVE IN URBAN INDIA

A national effort aimed at devolution of appropriate functional responsibilities

and the corresponding financial resources to the urban local bodies

Faculty of Planning and Public Policy, CEPT University, Ahmedabad


6/43

Local Government Finances-Post Amendment Scenario

1991-92 municipal revenues 4.6% of the revenue raised by central government

& 8.05% of state government

2001-2002relative % share of municipal revenue formed 3.07% while state 39.5

% & centre 57.5% respectively.

Municipal share in INDIA GDP is 0.61%(1997-98) & 0.63% (2000-2001)

Goa,Guarat,Maharashtra & Punjab ULBs revenue averages higher than

national averages.

Municipal expenditure average forms 0.75% of the GDP

Average establishment (salaries &wages) 54.2 % while O&M 39.93 % of the

total municipal expenditure

2002-2003 total expenditure of local bodies as % to total (union +state +ULB)

forms 4.7%.In advanced countries local government expenditure usually account for 20-

25 % of total expenditure (Denmark 45%,Finland 41%)

Dependency on state government transfer varies across states,10.1%

punjab,13.82% maharashtra,17.81%gujarat.74.48% Uttar Pradesh,83.33

%Rajasthan

DATA SOURECE:Om Prakash Mathur,Sandeep Thakur,,(2004),India's Municipal Sector -Study For Twelfth Finance Commission.



7/43

PRESENT SCENARIO..A MOVE TO WARDS URBAN REFORMS

2003-2007 TOWARDS URBAN REFORMS..

URIF INITIATED URBAN REFORM PROCESS

Reform of property tax levy

Reasonable user charges

Introduction of double entry system

JNNURM -2006 -2011-ENCOURAGE REFORMS AND FAST TRACKED DEVELOPMENT

Implementation of the 74th CAA

Property tax reform

GIS & MIS applications in Urban Local bodies

THRUST ON IMPROVED URBAN GOVERNNANCE & SERVICE DELIVERY SO THAT THE ULB

BECOMES FINANCIALLY SOUND AND SUSUTAINABLE FOR UNDERTAKING NEW

PROGRAMS



8/43Faculty of Planning and Public Policy, CEPT University, Ahmedabad

BACKGROUND

The 74th CAA.1992. came into force June 1 ,1993 - ULB Constitutional recognition.

Previously, Entry -5 of the State list-only reference to municipalities

ULB was a complete state responsibiltyAt the time ,weak and inefficient ULB ,the reason being:

Failure to hold regular elections ,prolonged super cession

Inadequate devolution of powers, functions and finance

THE OBJECTIVE OF THIS GREATER DEGREE OF AUTONOMY AND FINANCIAL EMPOWERMENT

WAS TO MAKE ULB EFFICIENT AND VIBRANT DEMOCRATIC UNITS OF SELF GOVERNMENT

- How far have the states adopted the provisions of the 74th CAA?

- How has the ULB functioning mechanism been effected by this amendment?

- Has the ULB been empowered with more powers, functions and resources?

- Has this amendment contributed to greater efficiency and hence greater

development?

More than a decade after the enactment of the Act, in the context ofongoing reform initiatives the question arises:


9/43

AIM OF THE STUDY

To review the implementation of the 74th CAA on the municipal bodies in

Gujarat and assess the impact of the amendment on the performance of the

urban local bodies.

OBJECTIVES OF THE STUDY

Understand the 74th CAA as a step towards empowerment

Study of the existing status of implementation and the various criticalissues involved and assess the implications of the 74th CAA on the

performance of the municipal bodies

Analyze the impact of fiscal empowerment of the municipalities on it

efficiency and the development process and how state-local fiscalrelations have altered after the CAA

To identify and give recommendations on certain methods by which this

amendment can be used as a framework for further development in

the context of ongoing reforms.



10/43

STUDY FRAMEWORK

Review of 74th CAA as a step

towards empowerment

Review post amendment reforms

ULB and their implications.

Broad Study of the implementation

status of the 74th CAAAll India

Review of SFC reports and StateFinance Board reports

Income expenditure details of allmunicipalities in Gujarat 1996-2006

Interviews held with officials of DOM,GMFB, and GUDM

Municipal Budget documents andincome expenditure details 2001-2006Interview held with:Chief executive officers,President of elected council,Secretary,Elected Council Members,Accounts Offices, Chief Engineer, InternalAuditor, Town Planning & Urban Development

Officials.

GAPS & ISSUE IDENTIFICATION

REVIEW OF ONGOING REFORM

INITIATIVES

STATE LEVEL IMPLEMENTATION CHECKGUJARAT

ULB LEVEL CHECK-MUNICIPALITIES OFBHARUCH DISTRICT

Study of Kerala as a

successful example

Discussions with KILA

officials,CEO

& council memberThripunithara municipality

Analyze of the postamendment fiscal scenarioin Gujarat

Ongoing reforms in Gujarat

municipal bodies

LITERATUREREVIEW

DATAANALYSIS

RECOMMENDATIONS & CONCLUSIONS


11/43

74TH CAA.. AT A GLANCE

OBJECTIVES

Set up institutional mechanism to

facilitate decentralization.

Demarcate the role of Urban Local

Bodies and specify their functions.

Ensure representation of all sections

of society, many of which have

been previously under represented.

Ensure that urban local bodies arenot superseded by states.

Regular Elections

Strengthen the financial resource

available to the local bodies,

improve transparency

PROVISIONS PART IX A

OF THE CONSTITUTIONFEATURES OF THE 74th CAA

Article243Q

Article 243 S

Article ZD

Article ZE

Three tier system

Nagar -Panchayat,

Municipal Council,Municipal Corporation

Constitution of

Ward Committees,

District Planning Committees

Metropolitan Planning

Committees.

Article 243W Powers authority and functions

Article 243T Reservation of seats

Article 243U Continuity-five year tenure

Article 243K State Election Commission

Article 243Y

Article 243Z

Article 243X

State Finance Commission

Audit of Accounts

Taxation Powers

Positive implications aimed to achieve.

Political stability

Democratization

Improved Decision Making Process At Local Level

Sustainable Human Development

Adequate representation of weaker section of society

Enhanced People participation

Improved service delivery



12/43

KERALA EXPERIENCE


13/43

Objectives of Kerala decentralization

Improve the quality of investment by allocating resources for priorities fixed locally

Facilitate emergence of local solutions to developmental problems through improved

planning, better implementation, use of traditional knowledge and appropriate

technology etc

Exploit local production possibilities;

Enable peoples participation, leading to keener oversight in the execution ofschemes, followed by better upkeep of assets;

Provide the enabling environment for people to make contributions in kind and cash

for development programs identified by them for priority action;

Bring about a convergence of resources and services to tackle development

problems with greater vigor; and

Unleash public action resulting in a demand-led improvement in the delivery of

developmental and welfare services

THE KERALA DECENTRALISATION EXPERIMENT-A CASE STUDY

Kerala has carried out certain pioneering reforms in the context of decentralized governance.

The state transferred not only of functions and responsibilities, but also the authority

to carry them out, along with resources, both human and financial.

Unconventional & innovative strategy for the decentralization process

Peoples Planning Campaign to set agenda for decentralization

Big Bang Approach to decentralized governance



14/43

The quality of service delivery by local government has not improved to the extentdesired.

Tendency to spread resources thinly with preference being given to every electoral

constituency whenever a development scheme is taken up.

Participatory aspect of planning is often limited to airing of needs and sharing of

benefits.

The flow of bank credit into local schemes has been rather limited resulting more from

bankers reluctance to deal with local governments-thus higher subsidies

KERALA ACHIEVEMENTS & CHALLENGES

The formula based devolution of funds has ensured equitable funds flow

Peoples Participation -designed to facilitate intervention by the interested citizen at allstages of the development process

Wide ranging reformsindependent regulatory institutions like SEC,SFC,OMBUDSMAN,APPELATE TRIBUNALS, STATEDEVELOPMENT COUNCILS,

improved management systems both financial and administrative

enhanced accountability mechanisms performance & social audit

Development matters local governments

Better service delivery-evolved efficient and cost effective mechanismsMandatory Women Component Plan

Poverty reduction-more funds from local government to poverty stricken families

Many local governments have been able to raise public contributions for improvingservice delivery

ACHIEVEMENTS:

CHALLENGES:


15/43

IMPLEMENTATION IN GUJARAT


16/43

GUJARAT

Total Population : 51 Million (2001)

Urban Population : 37% of total population

Area : 196024 sq.km.

Population Density : 260 persons/sq.km.

Literacy Rate : 69.17%

Sex Ratio : 920Total number of Districts : 25

Total number of Towns : 242

Total number of Villages : 18539

Total number of Cities : 27

Major Industries : Chemicals, Petrochemicals, Textiles,

Diamonds, Consumer goods


17/43

GUJARAT


18/43

URBANISATION TRENDS IN GUJARAT

Gujarat urban population increased

three fold from 5.315 million(25.77%) in

1961 to 37.6% 2001

The 2001 urban population-Gujarat is

18.22 millions(37.6%) while India 286.02

million(27.85%)

Gujarat stands among the economically

better states, per capita income Rs.16,998compared to India Rs.14682

MUNICIPALITY CLASS POPULATION NUMBER

A ABOVE 100,000 9

B 50,000 to 100,000 32

C 25,000 to 50,000 44

D 15,000 to 25,000 58

TOTAL MUNICIPALITIES 143

Table 6.4 CLASSIFICATION OF MUNICIPALITIES IN GUJARAT -

2001 CENSUS



19/43

CHECK ON THE STATUS OF IMPLEMENTATION

GUJARAT STATE LEVEL

URBAL LOCAL BODY LEVEL

A CASE OF BHARUCH DISTRICT

MUNICIPALITIES

BHARUCH-CLASS A

ANKLESWAR-CLASS B

JAMBUSAR-CLASS C

PROVISIONS OF

THE 74th CAA

GUJARAT

MUNICIPALITIES ACT 1963

.GUJARAT ACT NO. 34 OF

1964

STATUS OF

IMPLEMANTATION

REFORM

INITIATIVES &

COMMENTS

PROVISIONS OF THE

74th CAA

STATUS OF IMPLEMENTATIONCOMMENTS &

REFORMSBHARUCH

CLASS A

ANKALESWA

R CLASS B

JAMBUSAR

CLASS C



20/43

FISCAL EMPOWERMENT OF MUNICIPALITESA CLOSER LOOK

Review of the Gujarat municipal finances 1996-2006 reveals:

Gujarat-12% total municipal revenues in India after Maharashtra(48%)

Gujarat per capita internal resource Rs.809.4 ranks third after Maharashtra and Punjab.

The cumulative tax income of all the municipalities in Gujarat (2002-2006) to total tax

revenues of the state ranges only 0.58 to .61 percent. Indicates the weak contribution of local

economy to the state, the main reason-the abolition of Octroi in municipalities .

Nearly 75 % of the tax income octroi income prior to its abolition. After octroi abolition

property tax forms the main source of internal revenue .Nearly 52 percent of the total tax

income. Hence focus on property tax for raising revenues.

The octroi income substituted by octroi grant by the state government has increases the

revenue grant component in the revenue income from an average of 13 percent prior to the

abolition of octroi to 60 percent dependency on grant in the revenue income.

The establishment expenditure against revenue income and expenditure increasing at a rate

of 1.04 and 2.4 percent (2003-2006), respectively indicates the need to optimize the resources.



21/43

GUJARAT STATE FINANCE COMMISSION-AREAS OF CONCERN..

1st SFC Report submitted to GOG on 13.7.98

Out of total 73 recommendations, 46 have been accepted completely

12 were accepted partially , 15 were not accepted by the State Government

2nd SFC has been constituted on 19th November 2003. With tenure period of 2 yearsbut extended further. The report awaits final approval.

Certain weak policy aspects of the 1st SFC recommendations that emerge are as

follows

Weak Devolution Model Framework

Absence of Untied Funds

Inadequate Data Base

Lack of Performance Based Devolution of Resources

Lack of Social Audit and Performance Audit

Inadequate Borrowing Policy Framework



22/43

STUDY AREA


23/43

Bharuch as a study case

Rapid increase in economy -golden corridor

High trends of urbanization-rapid industrial developmentHENCE HIGH DEMAND ON BASIC INFRASTRUCTURE PROVISION

Both Bharuch and Ankleswar have signed MOA with StateGovernment specifying timelines for the reforms

MUNICIPALITY CLASS TOTAL POPULATION AREA SQ.KM YEAR OF ESTABLISHMENT

BHARUCH A 148391 17.35 1852

ANKALESHWAR B 67952 8.87 1859

JAMBUSAR C 38771 5.12 1986

%SHARE OF URBAN POPULATION TO TOTAL POPULATION

0.00

5.00

10.00

15.00

20.00

25.00

30.00

1961 1971 1981 1991 2001

YEAR

%

POPULATIO

%SHARE OF URBAN POPULATION TO TOTAL POPULATION jambusar

BHARUCH AS A CASE.



24/43

AREA OF CONCERNTHE WARD COMMITEES

Article 243 S:Constitution andcomposition ofthe ward

committees

The concept notpresented in theexisting Act

Amendment Processprocess is ongoing.

Reform process to ensurecommunity representationand participation ongoing.

State Government currentstatus claim:

Informal system of takingdecision at different level.

The annual plans arediscussed with fellowcorporators and public byand large and their suggestions are incorporatedin the plan before putting itto Standing Committee andGeneral Board.

Gujarat Town Planning &Urban Development Act1976 ensure the community

participation in spatial urbanplanning.

Formation of wardcommittee is in theprocess.

JNNURM REFORM-Area Sabha for

urban areas GOG iswaiting for theguidelines oncommunityparticipation lawfrom GOI andbased on thatappropriate lawwould beformulated.

PROVISIONS OF

THE 74th CAA

GUJARAT

MUNICIPALITIES ACT

1963 .GUJARAT ACT NO.

34 OF 1964

(As modified up to

31stAugust 2006)

STATUS OF IMPLEMANTATIONREFORM INITIATIVES

& COMMENTS

STATE LEVEL

O CO C O O SSTATE LEVEL


25/43

Article 243 X:Power toimpose taxesby and, funds ofmunicipalities

Contain theprovisions in detailas to which type oftaxes a municipalitycan collected.

The present tax anduser chargesdecided by thegeneral body andafter publicapproval, put across

for state governmentapproval.

High political interventioninto the taxation process tobe curbed.

Reform

1.Area based propertytaxation system.

2.Mandatory 85 percent ofO& M cost recovery onservice proved byULB,moving towards 100percent cost recovery

3 Setting up of tax ratesetting commission andfixing tax and user chargerange under process

PROVISIONS OF

THE 74th CAA

GUJARAT

MUNICIPALITIES ACT

1963 .GUJARAT ACT

NO. 34 OF 1964

(As modified up to

31stAugust 2006)

STATUS OF

IMPLEMANTATION

REFORM INITIATIVES &

COMMENTS

AREA OF CONCERNTAXATION POWERSSTATE LEVEL


26/43

TAXATION POWERS AND FINANCIAL OBLIGATIONS IN MUNICIPALITIES-THE ISSUES

Procedure forimposition oftaxes

Municipality shall, by passed at ageneral meeting.The municipality shall publish the rulesso approved with notice.Any objection within a month isconsidered and discussed.Notification proposed in accordanceforwarded to state government.

Political pressure hampers theincrease in tax rates and hike in

user charges.State Government control- If theestablishment expenditureexceeds 45% of expenditure 10 %deduction in establishment grantevery year and certain other grantswith held.

Revision ofTaxes

The state government may bynotification in the official gazetteempower any municipality to levy anytax or to increase or reduce the amountor rate of any tax levied within maximumand minimum limits

empowered to revise their taxrates.No voluntary initiatives to raise theirtax rates came from municipalities(2001-2007)-DOM sourceLack of political will. The stategovernment initiates the process inmonthly review meetings withCEO.

Rate of Tax Not specified

Empowered to decide the taxrates and user charges.Level of autonomy is this respect ishigh but misutilized due to low

political will.Reform initiatives: Base tax rates

would be fixed in the amendedMunicipality Act (process ongoing

COMPONENTS PARTICULARSCOMMENTS

& REFORM INITIATIVES

Existing autonomy hampered by low political will.

Automatically leads the State Government to highly intervene into the localgovernance process to help it sustain.

State Government has to constantly perform a monitoring role to ensure

cost recovery of the service provided


27/43

Article 243 X: Powerto impose taxes byand, funds ofmunicipalities

PropertyWaterVehicleTheatreSpecial feeRental

propertyMarketsSewerageLighting

Revision ofwater taxcase

PropertyWaterVehicleEntertainmentSpecial feeMarket

LightingRentalproperty

Property taxWater taxSewerageEntertainmentSpecialcharges:

Special watertaxCattleShopsProperty salecess

Tax rate &user chargesetting decisions aredirectly taken byelected body

Political pressure veryhigh.

Reform initiative:State governmentplans to set a taxsetting regulatoryauthorityArea based propertytax system processongoing.

PROVISIONS OF

THE 74th CAA


REFORMSBHARUCH

CLASS A

ANKALESHW

AR CLASS B

JAMBUSAR

CLASS C

AREA OF CONCERNTAXATION POWERSULB LEVEL


STATE LEVEL


28/43

Article 243 Z:Audit ofAccounts ofmunicipalities

Audit provided for underthe provisions of theGujarat Local Fund AuditACT, 1963(GUJ.XLIX).

The municipal accountsmay be audited at anytime by the stategovernment

The auditor shall for thepurpose of his office haveaccess to all accounts

and records of themunicipality.

The audit wasconducted by theLocal funds auditteam.

Certain irregularitiesin the existing system(case study)

Reform aiming at

more accountabilityand transparency

1.The local funds audit tobe under the purview ofCAG

2.Mandatory adoption ofdouble entry accounting

system in all urban localbodies basedReality check micro levelreflects irregularities inexisting auditing andalso low level ofcompliance of ULB toaudit team

recommendations.

PROVISIONS OF

THE 74th CAA

GUJARAT MUNICIPALITIES

ACT 1963 .GUJARAT ACT NO.

34 OF 1964

(As modified up to 31stAugust

2006)

STATUS OF

IMPLEMANTATION

REFORM INITIATIVES &

COMMENTS

AREA OF CONCERNAUDIT OF ACCOUNTSSTATE LEVEL


29/43

Article 243 Z: Audit

of Accounts ofmunicipalities

Regular, Once

in every yearlocal fund audit

Irregular.Two yearback log.*

Irregular.One yearback log.*

Level of complianceto therecommendations ofthe audit team hasalso been low.

PROVISIONS OF

THE 74th CAA


REFORMSBHARUCH

CLASS A

ANKALESHW

AR CLASS B

JAMBUSAR

CLASS C

* As per information given by accounts division officials in the Municipalities

AREA OF CONCERNAUDIT OF ACCOUNTSULB LEVEL



30/43

CONFORMITY TO THE DEVOLUTION OF FUNCTIONS IN 12TH SCHEDULE

THE TWELFTH SCHEDULE

FUNCTIONS

DEVOLUTION

STATUSCOMMENTS(BASED ON MICRO LEVEL CASESTUDY)

Urban planning including

town planning

GOGdeclared asfullytransferred.

Largely comes under the purview of the town

planning department.

Regulation of land use andconstruction of building

Land use as per the town planning schemes.

Planning for economic andsocial development

Development plans prepared by the Townplanning department.

Roads and bridges

Dependent on the Public Works Department for

Technical sanction-Low Technical capacitybeing the reason for such dependence.

Water supply for domestic,industrial and commercialpurposes

Devolved but projects implemented with the helpof Gujarat water supply & sewerageboard.Techinical competence lacking.

Urban forestry, protection ofenvironment and ecology

Taken care of by municipality, involvement ofNGO prevalent

Safe guarding interest of theweaker section of the societyincluding the handicappedand the mentally retarded.

No other efforts other than representation in theelected council

Slum improvement andupgradation

Largely limited to the execution of centre andstate government schemes.

Urban poverty alleviation No other efforts other than representation in theelected council

AREA OF CONCERN IN THE 12TH SCHEDULE

REVIEW OF THE LOCAL BODY FINANCES


31/43

REVIEW OF THE LOCAL BODY FINANCES

FINANCIAL PERFORMANCE OF CLASS A,B,C MUNICIPALITIES-A COMPARISION

FINANCIAL PERFORMANCE INDICATORS BHARUCH ANKALESHWAR JAMBUSAR

Resource Mobilisation

Share of own source of funds in TotalRevenue Income 34.63 41.21 19.56

Share of Property Tax of funds in TotalRevenue Income 14.97 9.91 8.10

Share of revenue grants (octroi incl) andsubsidies of funds in Total RevenueIncome 65.37 58.79 80.44

Share of revenue grants excludingoctroi grant in Total Revenue Income 25.62 16.61 53.5

Fund Application

Share of establishment to total revenueexpenditure (%) 20.85 42.84 28.86

Share of establishment to total revenueincome (%) 19.98 35.07 18.49

Share of O & M in total revenueexpenditure (%) 72.42 55.57 63.40

Performance Indicators

Operating Ratio 1.02 0.82 0.64

Capital Utilization Ratio 0.31 0.79 1.24** ca ital works onl in 2003-2004


32/43

The share of own source (tax +non tax ) in revenue income is as low as 19.5

percent in Jambusar which is class C ,while Bharuch class A is also only 34

percent.

Octroi grant forms nearly 60 percent of the revenue grant due to which the

percentage share of grant (octroi incl.) is as high as between 58-80 percent.

The average operating ratio Bharuch shows a revenue deficit Ankleswar

,Jambusar less than unity, indicating a revenue surplus.

Average capital utilization ratio in three cases show lack of utilization of

available capital income indicating the low utilization of funds available for

capital works.

Incase of Jambusar over the five year review period only in the year 2003-04, capital

expenditure has been made. This clearly indicates the low level of developmental

activities.

REVIEW OF THE LOCAL BODY FINANCESTHE KEY FINDINGS



33/43

EMERGING ISSUES

EMERGING ISSUES


34/43

High state intervention (reflected from Bharuch,Ankleshwar ,Jambusar case studies)

The discussions held reveals that the state government has direct and strong control over thefunctioning of the local bodies in the following aspects

All the grants are in the form of tied grants wherein the grant is given for specific purpose

Agenda of local priorities set by state .The concept of community involvement lost .

User charges and taxes as decided by the urban local body requires prior ratification.

Access to banks and financial intermediaries for loan requires prior permission to be sought

from the state government .

EMERGING ISSUES

High dependency on grants from state government

Municipality is dependent on state government for both their administrative costs

and capital works.

In order to cover their administrative costs the local body receives a 33 percent

grant and all their capital works are based on state grants and subsidies.

Jambusar - class C reflects high dependency of 59 %on grants in the revenue income whileonly 18 %of the revenue income comprises of the own sources tax and non tax)

Ankleswar - class B and Bharuch- class A the percentage own source of income to total

revenue income is 41 % and 36 % respectively.


EMERGING ISSUES


35/43

Technical competence & Organizational Capacity

Execution of public works prior technical sanctioning from PWD department (planning dept.

information-case studies)

Implementation of water and sewerage projects-GWSSB

This reconfirms the need for capacity building to make the local government moreautonomous.

High political intervention and lack of public participation

Elected body takes strong control over the most of the decisions of the municipality.

Various committees that are formed completely comprise of the ruling party members and the

decisions are open for discussion only when the general body meetings are held.( information

received from elected body members,Bharuch and Ankleswar

Lack of community involvementdecisions are more politically driven

(We ,the representatives of people know their needs)

Local Planning Initiativestotally dependent on the Town Planning DepartmentTP.schemes

EMERGING ISSUES


EMERGING ISSUES


36/43

EMERGING ISSUES

Transparency & Accountability

Ankleswar and Jambusar case reveals one year and two year back log for the

audit.

Lack of strict monitoring on level of adherence to the audit recommendations

,hence remains neglected.

Accounting system needs to be transparent and budgetary documents needs tobe given public access

Double Entry process ongoing since one year (as per case studies) Process needs

to be accelerated.

Capacity Building of accounting staff to adopt new system is area of concern.

Public Disclosure Law to be adopted without delay



37/43

POLICY OPTIONS

RECOMMENDATIONS FOR FUTURE POLICY OPTIONS


38/43


The state functioning as a facilitator

Local body should function as autonomous units while state monitors the process.

For increased autonomy the need arises to improve the financial resource base & locallevel capacity building initiatives.

Separate nodal agency to be set up for continuous capacity building initiatives

Improvement of Technical Competency

The recruitment process of technical staff at local level must be made rigid so that thetechnical competency of the staff is ensured.

Capacity building of existing technical staff integration of external experts

Breaking viscous cycle of low performance

The vicious cycle of low financial base, hence low level of service delivery and resultinglack of willingness to pay would result in the local body continuing to sustain on the state

government

Widening tax structureAcceptable tax structure needs to evolve where the citizen are willing to pay for the

good quality service




39/43


Efficient resource mobilisation

Focus should be on taxes that yield good revenue and efforts made to make the taxcollection system more water tight.

STATUS OF PROPERTY TAX REFORM IN BHARUCH,ANKLESWAR ,JAMBUSAR

Municipality Existingregisteredproperty

Surveyedproperty

%covered Potential for extratax revenue

Bharuch 43061 36891 85 Ongoing

Ankleswar 19107 20684 107 7%

Jambusar 10023 12244 122 22%

Source:GUDM last updated on 19th December 2006

Rationalization of user charge

User charges for provision of basic services are generally politicized wherein in the localbody is compelled to provide services for free or at negligible cost

Solution would be by fixing the minimum user charges to be levied for various services.

Cost Recovery for service delivery and thrust to cover at least the O&M charges by GOGhead in the right direction and need to be further strengthened.




40/43


Community participationa structured framework &expert involvement

Social Accountability to all the actions of the local government and transparency should

be instilled into the system.

Committees should involve non political representation in the form of experts from various

fields, social workers and representatives of voluntary organization.

Well defined framework for the non political inclusion at grass root level so that a

common system could be followed and ensured throughout the state

Introduce sense of competition in ULB

Reduce monopoly in the provision of service by the local body.

Parallel service provider like private players would instill the sense of competition andensure best service

Regular performance checkon the functioning of local bodies and a platform of

comparison among them with certain incentives earmarked for most efficient local bodies.



41/43

THANK YOU



42/43

AN LOOK INTO THE FINANCES OF ALL MUNICIPALITIES IN GUJARAT

Financial

year

%Tax

income in

Total

Revenue

Income

%Octroi

Income in

total taxincome

% Property

Tax in total

tax income

% Revenue

Grant in total

revenueincome

%Establishment

Expenditure to

revenue expenditure

%

Establishment

Expenditure

against revenue

income

1995-96 72.78 77.76 7.78 12.52 50.07 46.74

1996-97 75.33 77.41 7.88 12.83 52.48 50.12

1997-98 74.65 70.33 7.07 11.55 52.53 46.21

1998-99 72.47 76.77 8.06 14.10 52.55 49.23

1999-2000 71.92 77.16 10.24 15.15 54.58 55.57

2000-2001 69.00 75.22 4.25 19.61 54.03 52.06

2001-2002 32.11 34.99 19.52 55.00 57.91 58.57

2002-2003 22.50 0.00 49.23 66.18 62.47 54.27

2003-2004 27.45 0.00 54.84 61.80 62.47 56.26

2004-2005 24.56 0.00 56.96 63.17 63.12 57.21

2005-2006 22.35 0.00 53.72 64.41 64.14 58.32

Source:GMFB Income Expenditure Tables



43/43

LIST OF DISCRETIONARY TAXES & FEES THAT CAN BE LEVIED AS PER GUJARAT

MUNICIPALITIES ACT 1963

LEGISLATION DISCRETIONARY TAXES FEES THAT CAN BE LEVIED

.GUJARAT ACT NO. 34 OF

1964

(As modified up to 31stAugust2006)

Property, vehicles, boats, animals,

motor vehicles, octroi, dogs, special

and general sanitary cess, lighting,sale of cattle in market, betterment

levy

Registration fee, license fee,

swimming bath fee, slaughter

house fee, building constructionfee, shop registration fee, water or

connection fee, cattle pound fee

LIST OF TAXES THAT ARE SHARED BETWEEN MUNICIPALITY & GOG

NAME OF THE TAX THE SHARE GIVEN TO THE URBAN LOCAL BODIES

Non Agricultural Assignment 75 percent of the total amount collected from the municipal area

Land and Revenue

(Agriculture)35 percent of the recovery made during the previous year

Local cess on Land Revenue

and Water Rate

After deduction of the recovery -expenditure 100 percent of the remaining

amount

Education Cess 75 percent of 85 percent on the basis of percentage of recovery provided thatthe responsibilty of the primary education is undertaken ,otherwise 5 percent of

the recovery to the urban local bodies

Entertainment Tax50 percent of the income, though the amount is given as a contribution against

the scheme expenditure through the Municipal Finance Board.

Date post:	09-Apr-2018
Category:	Documents
Upload:	aadishn
View:	225 times
Download:	0 times

74th Constitutional Amendment

Documents