"The states in India seem reluctant to empower urban local bodies both functionally as well as financially." Comment.

Introduction

The 74th Constitutional Amendment Act (1992) was a landmark reform aimed at empowering Urban Local Bodies (ULBs) by granting them constitutional status and devolving functional and financial powers. However, despite three decades since its enactment, the reluctance of states to fully empower ULBs remains a significant challenge, undermining the vision of grassroots urban governance.

Key Dimensions of Urban Local Body Empowerment

Functional Empowerment: Challenges and Gaps

• Limited Devolution of Functions:
  Despite the 12th Schedule listing 18 functions for ULBs, states have not devolved many critical functions like urban planning, water supply, and public health. For instance, parastatal agencies often control these functions, bypassing ULBs.

• Overlapping Jurisdictions:
  Lack of clarity in the division of responsibilities between ULBs and state agencies leads to inefficiencies. For example, in cities like Delhi, multiple agencies handle urban services, creating coordination issues.

• Weak Institutional Capacity:
  ULBs often lack the technical expertise and human resources to effectively discharge their functions. This is exacerbated by inadequate training and capacity-building initiatives.

Substantiation:

• ★ NITI Aayog Report (2021) highlights that only a few states have devolved all 18 functions listed in the 12th Schedule.
• Case Study: In Maharashtra, the Mumbai Metropolitan Region Development Authority (MMRDA) often overrides the Brihanmumbai Municipal Corporation (BMC) in urban planning decisions.

Financial Empowerment: Challenges and Gaps

• Dependence on State Governments:
  ULBs rely heavily on state grants and share of taxes, with limited own-source revenue. For instance, property tax, a major revenue source, is often capped or poorly collected.

• Delay in State Finance Commission (SFC) Recommendations:
  Many states fail to constitute SFCs regularly or implement their recommendations. This delays the transfer of funds to ULBs.

• Inadequate Revenue-Generating Powers:
  ULBs have limited authority to levy taxes or user charges. For example, in many states, stamp duty and motor vehicle tax are retained by the state government, depriving ULBs of significant revenue streams.

Substantiation:

• ★ Economic Survey (2020-21) notes that ULBs in India generate only 0.8% of GDP, compared to 6% in Brazil and 7.4% in South Africa.
• Example: Bengaluru’s municipal corporation struggles with a low property tax collection efficiency of around 50%.

Political Reluctance and Centralization

• State Control over Elections:
  State governments often delay ULB elections, citing administrative or legal reasons. For instance, elections in Tamil Nadu were delayed for over three years.

• Dominance of State Bureaucracy:
  Key decisions in ULBs are often taken by state-appointed bureaucrats rather than elected representatives, undermining local democracy.

• Resistance to Empowerment:
  Political reluctance stems from fears of losing control over urban areas, which are often economic and political hubs.

Substantiation:

• Example: In West Bengal, the Kolkata Municipal Corporation has limited autonomy, with significant interference from the state government.

Way Forward

• Strengthening Functional Devolution:
  States must transfer all 18 functions listed in the 12th Schedule to ULBs and ensure clear delineation of responsibilities.

• Enhancing Financial Autonomy:

  • Regular constitution and implementation of State Finance Commission recommendations.
  • Empowering ULBs to levy and collect taxes like property tax, user charges, and entertainment tax.

• Capacity Building:

  • Training programs for municipal staff and elected representatives.
  • Leveraging technology for efficient service delivery and revenue collection.

• Ensuring Political Decentralization:

  • Conducting timely elections for ULBs.
  • Reducing bureaucratic interference and empowering elected representatives.

• Leveraging Urban Missions:
  Programs like AMRUT 2.0 and Smart Cities Mission should focus on strengthening ULBs as key implementing agencies.

Conclusion

Empowering ULBs is critical for achieving Sustainable Development Goal 11 (Sustainable Cities and Communities) and fostering inclusive urban governance. States must shed their reluctance and embrace true decentralization to ensure that cities become engines of growth and centers of participatory democracy.