The empowerment of urban local bodies (ULBs) is crucial for effective governance and sustainable urban development in India. However, many states exhibit reluctance to delegate functional and financial authority to these bodies, hindering their ability to address local issues effectively.

Q3. The states in India seem reluctant to empower urban local bodies both functionally as well as financially. Comment.

Model Answer:

Introduction

The 74th Constitutional Amendment Act of 1992 ushered in a new era of decentralisation in India, aiming to empower urban local bodies like municipalities and corporations. These bodies were envisioned to become the driving force behind effective urban governance. 

Body

State’s reluctance in empowering ULBs functionally 

• The 74th amendment act lists 18 functions for ULBs, but many states haven't fully devolved crucial areas like urban planning, sanitation, and public health. some text
  • For instance, a 2021 report by the NITI Aayog found that only 11 states had transferred all 18 functions. 
• States view strong ULBs as political rivals. Delays in local body elections are a concern. some text
  • Tamil Nadu, for example, witnessed a gap between 2011 and 2019, hindering ULBs' ability to function. 
• The state governments retain significant administrative control over ULBs. Key appointments, including that of the Municipal Commissioner, are made by the state government, limiting the autonomy of ULBs. 

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State’s reluctance in empowering ULBs financially 

• Limited Devolution of Funds As per reports by Niti Aayog report, only 18 out of 28 states have established Finance Commissions. This delays and reduces the flow of funds to ULBs. 
• Over-reliance on States' grant - A study by the Centre for Budget and Policy Research revealed that grants constitute a major share (up to 70%) of ULBs' revenue. 
• In 2023, the Municipal Corporations of Pune and Pimpri-Chinchwad in Maharashtra faced delays in receiving state grants, impacting waste management and infrastructure projects. 

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What need to be done to empower them functionally and financially - 

Some of the recommendations of ARC in this regard are as follows – 

Functional empowerment

• States should prepare activity maps clearly delineating the functions to be performed by ULBs, ensuring there is no overlap with state functions.
• ULBs should be provided with adequate administrative and technical staff to perform their functions effectively.
• Training and capacity-building programs should be regularly conducted to enhance the skills of ULB officials and elected representatives.
• The role of state governments should be limited to providing guidance and support rather than direct control. 

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Financial empowerment

• States should ensure that ULBs have access to a stable and predictable source of revenue by implementing recommendations of the State Finance Commissions. 
• ULBs should be encouraged to access capital markets for raising funds for infrastructure projects. This can be facilitated through municipal bonds and other financial instruments.
• States need to initiate property tax reforms to enhance the revenue-generating capacity of ULBs.
• Encouraging public-private partnerships (PPPs) to leverage private investment for urban infrastructure projects.

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Conclusion

Empowered urban local bodies are the cornerstone of a vibrant democracy. By addressing the challenges and ensuring robust support for ULBs, we can foster a more inclusive and participatory governance framework that truly empowers the urban populace.

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