By Vaibhav Anand, IFMR Capital
(This is the second post in the series of posts on the Municipal Finance Scenario in India. In this post, we discuss the functions devolved to ULBs as per the 74th Constitutional Amendment. We also discuss briefly the capabilities of ULBs to carry out these functions successfully.)
The 74th Constitutional Amendment Act (CAA)I incorporated provisions for devolution of certain powers and functions to Urban Local Bodies (ULBs). Section 243W of the 74th CAA aimed at devolving the responsibility for local economic development and social justice. The Twelfth Schedule of the Constitution lists the specific functions under economic and social development that are best devolved to ULBs.
Given the importance of functions and responsibilities entrusted to the local self-governments, the issues relating institutional structure of ULBs gain tremendous significance. These structures are not uniform across states or even metropolitan (or district) areas, and are plagued with political and administrative problems. These shortcomings make the successful execution of devolved functions a challenging task for the local bodies.
We discuss here some of the functions listed in the Twelfth Schedule of the Constitution and the ability of ULBs to carry out these functions successfully.
I. Urban planning including town planning &
II. Regulation of land-use and construction of buildings: Typically the above two functions fall under the purview of the development authority of the city (e.g. Delhi Development Authority (DDA), Bangalore Development Authority (BDA). However, the responsibilities are sometimes shared with multiple authorities (i.e. industrial development authorities, regional development authorities) within a metropolitan region. This multiplicity of authorities and lack of coordination among them make decision making and implementation of public infrastructure and services extremely difficult.
III. Planning for economic and social development: The definition and scope of this function is fairly wide, open ended and to an extent, unwieldy. Social and economic development programmes require sound integrated planning which requires resources and expertise which the most of the ULBs seem not to have endowed with. The HPEC Report on Indian Urban Infrastructure and Services has clearly stressed the need of the appropriate capacity building at local bodies’ level.
IV. Roads and bridges: This function is typically shared by multiple bodies- city development authorities, municipalities and the public works departments (PWDs). However, an integrated planning is essential to ensure that city roads and urban building/housing plans are properly aligned. The lack of coordination among multiple authorities involved often makes it difficult to formulate and implement an integrated plan.
V. Water supply for domestic, industrial and commercial purposes: This is a function that is most appropriately by ULBs. The current state of urban water supply is quite dismal with billing and collection of only 20% of supplied water and Operations &Maintenance cost recovery of 30 – 35%. Also, the connection coverage in urban areas is low (65%) as compared to other developing countries (91% in China, 86% in SA and 80% in Brazil). Again, in some states the urban service delivery is the responsibility of parastatals (state government’s statutory agencies) that are not answerable to ULBs and only to state governments. ULBs, answerable to their smaller jurisdiction, have little control on these parastatals that operate on a larger scale; this complicates incentive structures, leading to poor outcomes.
VI. Public health, sanitation conservancy and solid waste management: Public health, contrary to its significance for social and economic development of the country, is not supported by a consistent institutional structure (each state has a different structure) and policy framework (the last two National Health Policies were made in 1983 and 2002) at the centre or state level. It is highly program driven with the centre government responsible for funding and planning, and state government for implementation. Health care is largely financed by private pockets. As of 2001-02, the share in health financing of the local governments, state and central government was 2.2%, 14.4% and 7.2%II. With dwindling finances of ULBs and the extent of intervention required, it is not clear that this is a mandate that ULBs are well equipped to handle.
Solid waste management comprises of various steps- collection, segregation, transportation, disposal and recycling. These activities are normally carried out by different bodies. Though the current status of solid waste management is dismal (with less than 40% disposal and less than 1% recycling), it accounts for the 25-50% of ULB’s total expenditureIII, and is also a function that is best performed by ULBs.
VII. Slum improvement and up-gradation: Typically falls under the purview of the housing boards and the city development authority. However, similar to the social and economic development functions, it is a challenging task and little exists in terms of a policy framework or planning.
VIII. Urban poverty alleviation: Such a broad mandate with the level of coordination and extent of intervention required again bring to question whether ULBs are the appropriate level of government to discharge this responsibility.
Other functions listed in the Twelfth Schedule are mentioned below. The devolution of some of these functions (e.g. fire services, providing urban amenities, burial & cremation grounds etc) to ULBs is justified as these functions may be best performed by local governments. However, some functions pertaining to social and economic development are either very wide in scope or there is little policy framework to guide ULBs to plan and execute them.
IX. Fire services
X. Urban forestry, protection of the environment and promotion of ecological aspects
XI. Safeguarding the interests of weaker sections of society, including the handicapped and mentally retarded.
XII. Provision of urban amenities and facilities such as parks, gardens, playgrounds
XIII. Promotion of cultural, educational and aesthetic aspects.
XIV. Burials and burial grounds; cremations, cremation grounds and electric crematoriums.
XV. Cattle pounds; prevention of cruelty to animals.
XVI. Vital statistics including registration of births and deaths.
XVII. Public amenities including street lighting, parking lots, bus stops and public conveniences.
XVIII. Regulation of slaughter houses and tanneries.
To conclude, the devolution of functions to the local bodies could meet its intended end only with a commensurate devolution of powers, political freedom and revenues by the state governments. Further, without the administrative, institutional and financial reforms, and capacity building, the local-governments may not be able to execute their functions successfully.
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I – Link to the 74th CAA- http://indiacode.nic.in/coiweb/amend/amend74.htm
II – Financing and Delivery of Health Care services in India, MOHFW, 2005
III – HPEC Report on Urban Infrastructure, 2011
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