20 years down the line what ails the urban local bodies

Lack of money, capacity and states' unwillingness to cede power

By Moyna
Last Updated: Saturday 04 July 2015

On June 1, the 74th Amendment of the Indian Constitution which paved way for the formation of urban local bodies completes 20 years. These elected bodies were supposed to improve urban infrastructure and services. Down To Earth examines how well these bodies have fared.

Activists and officials say two decades on, these bodies are far from achieving their goal. They blame it on the unwillingness of state governments to share power with local governments and lack of capacity within the urban local bodies. These coupled with the lack of funds has resulted in chaotic cities which have bad roads, bad drainage, improper waste disposal and many more problems.

What went wrong?

The 74th Amendment focused on devolution of power, according to P P Balan, director of Kerala Institute of Learning and Advocacy (KILA). “It means devolution of the three Fs–funds, functions and functionaries. In reality this is not happening because most of the state fiscal devolution remains on paper.” He adds that the situation, though, varies from state to state.

Who’s most urbanised?
The National Capital Territory of Delhi is the most urbanised region with 93 per cent urban population, followed by Union territory of Chandigarh (89.8 per cent) and Puducherry (66.6 per cent).
Among the major states, Tamil Nadu is the most urbanised state with 43.9 per cent of the population living in urban areas followed by Maharashtra (42.4 per cent) and Gujarat (37.4 per cent). The proportion of urban population is the lowest in Himachal Pradesh at 9.8 per cent followed by Bihar at 10.5 per cent, Assam (12.7 per cent) and Odisha (14.9 per cent).
In terms of absolute number of persons living in urban areas, Maharashtra leads with 41 million persons which is 14 per cent of the total population of the country. Uttar Pradesh accounts for about 35 million followed by Tamil Nadu, 27 million.
There is no dearth of complaints against local governments in India but those working with urban local bodies say that the problem lies in lack of funds to carry out development works. “Urban local bodies face perennial funds crunch,” says Archana Ghosh of the Institute of Social Studies in Kolkata. Author of many books on urban local bodies, she adds that most states have failed to implement the 74th Amendment Act properly. “While the financial commission reports have repeatedly stated that portions of the state revenue go to the local bodies this has not happened. Additionally the revenue of the urban local bodies themselves are very limited and skewed,” she adds.

One of the main sources of income for local bodies is property tax. Ghosh, citing the example of Kolkata says that though the city limits were expanded in 1984—from 100 wards the city was extended to 141 wards—the new areas have never been taxed till date. There have been talks to introduce area-based property tax in Kolkata wherein localities will have to pay tax as per the real-estate value, but the move has been opposed by councillors of the local government, says Ghosh.

Sujatha Srinivasan of the Institute of Financial Management and Research in Chennai points out that the municipal property assets like land, buildings and advertising space are highly underutilised. Citing a 2007 World Bank review of municipal budgets, she says finances raised through land leases contribute between 50 to 100 per cent of municipal infrastructure investment expenditure in several urban local bodies globally. But in India this amounts to barely 30 to 40 per cent of the revenue urban local bodies can use.

In a study carried out between 2009 and 2010, Srinivasan surveyed three municipal bodies in Tamil Nadu. She found that in Chennai land, buildings and civil structure assets amount to 34 per cent of the total assets of the municipality while in Madurai they amount to 68 per cent and in Erode they comprise around 60 per cent but data shows collection varies. For example, annual budget statements of Chennai Corporation show that income from land and building assets was at Rs 3.99 crore in 2009-10 instead of Rs 5.40 crore in 2007-08. Tamil Nadu’s own state finance commission report of 2006 says, “Building complexes constructed by municipal bodies are kept idle for want of lessee or occupier refuses to make payment…” The report also says that revenue is not collected properly.

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Such instances of asset misuse and ignorance are abundant. A recent media report showed that in Varanasi area of Uttar Pradesh the town hall has become a garbage dump yard. The municipal body is unable to maintain or repair the premises, which is now a parking lot for garbage trucks. 

Limited capacity

Some activists say the root cause of all problems faced by urban local bodies is lack of capacity. “Even if the municipal bodies receive funds they just don’t have the capacity to function effectively,” points out Nidhi Singh, project manager with Delhi-based non-profit Pria. She adds that the local bodies are highly understaffed; where there is a need for 100 personnel there are barely 60 to 70 people available to carry out the work.

Ramesh Goel, senior engineer with Municipal Corporation of Delhi confirms this. “The city is vast and there are many laws like land sealing that are need to be enforced. With a small manpower, we are expected to enforce all laws, keep drains clean, ensure road maintenance, carry out surveys and implement various tax laws. We are doing the best we can.”

M Mathur of National Institute of Urban Administration (NIUA) says that the problem also lies in the fact that multiple agencies are at work in the city to cater to municipal needs but they rarely cooperate. He cites an example of Delhi to prove his point. “While the PWD is required to lay roads in certain parts of the city, the MCD is required to maintain storm water drains. When the road is being repaired, the MCD is not informed often and the drains get blocked leading to mayhem.”

The panacea

While complaints mount, an effort was made to solve the problems through the introduction of the Jawahar Lal Nehru National Urban Renewal Mission (JNNURM) in 2005. Along with Central aid for urban projects like transport and sewerage, the mission outlined 21 reforms that all local bodies were to put in place. Considered the biggest milestone in urban development and governance, the mission was to end this year.

But in April 2012 the Union ministry of urban development declared that the mission needs to be extended for two years more. The second phase that was to begin in 2012 is now scheduled to be implemented in April 2014. “Most of the projects sanctioned under JNNURM are under implementation and it is expected that completion of sanctioned projects and achievement of reforms as envisioned under JNNURM will go beyond 2011-12,” says the ministry in a communiqué on May 9.

Since JNNURM came into existence, around 559 projects were approved and sanctioned across 65 cities. But only 128 of them have been completed till date. The cost of the sanctioned projects was Rs 62,24,845.16 crore while the approved cost of the 128 completed projects was Rs 5,35,190.56 crore.

The scheme has come under scrutiny with half a dozen parliamentarians questioning the allotments and operations under the mission. Union urban development minister, Kamal Nath, on May 22, announced in Parliament that the mission has been able to show significant achievement in upgradation and creation of urban infrastructure and services. He added that cities contribute to over 50 per cent of the Gross Domestic Product and are “central to economic growth”. According to the 2001 census India had a population of 1,027 million; 285 million of them resided in urban areas, which comes to around 28 per cent of the total population.

“Things are changing but slowly. JNNURM for sure can address all the concerns, adds Mathur.

Number game

The number of towns and cities has increased to 4,378. These include
Class Population Size No.of UAs/Towns
Class I 100,000 and above 393
Class II 50,000 - 99,999 401
Class III 20,000 - 49,999 1,151
Class IV 10,000 - 19,999 1,344
Class V 5,000 - 9,999 888
Class VI Less than 5,000 191
Unclassified   10*
All classes   4, 378
Source: Ministry of Urban Development (http://www.urbanindia.nic.in)
The number of metropolitan cities having million plus population has increased to 35 as per 2001 census. These are:
Rank Urban Agglomeration/City Populaton (million)
1 Greater Mumbai 16.37
2 Kolkata 13.22
3 Delhi 12.79
4 Chennai 6.42
5 Bangalore 5.69
6 Hyderabad 5.53
7 Ahmedabad 4.52
8 Pune 3.75
9 Surat 2.81
10 Kanpur 2.69
11 Jaipur 2.32
12 Lucknow 2.27
13 Nagpur 2.12
14 Patna 1.71
15 Indore 1.64
16 Vadodara 1.49
17 Bhopal 1.45
18 Coimbatore 1.45
19 Ludhiana 1.40
20 Kochi 1.35
21 Visakhapatnam 1.33
22 Agra 1.32
23 Varanasi 1.21
24 Madurai 1.19
25 Meerut 1.17
26 Nashik 1.15
27 Jabalpur 1.12
28 Jamshedpur 1.10
29 Asansol 1.09
30 Dhanbad 1.06
31 Faridabad 1.05
32 Allahabad 1.05
33 Amritsar 1.01
34 Vijaywada 1.01
35 Rajkot 1.00
  Total 107.88
Note : Data is provisional
* Population Census 2001 could not be held in these towns/cities of Gujarat State on account of national calamity. Source: Office of the Registrar General of India. (Population totals for India & States for the census of India – 2001).

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