“Self-government is even better than good governance” - M. K Gandhi
Importance of Urban Local Governance for Participatory Democracy and Economic Growth
- “Urban Local government” implies the governance of an urban area by the people through their elected representatives.
- “March from Paper democracy To Participatory democracy”
- Urban population (2011 census): 31 percent
- GDP contribution: About 60 percent
- Urban centres as “Engines of economic growth”
- People’s participation along with democratic decentralisation is fundamental for good governance.
- Local Government is a state subject under the seventh schedule.
Evolution of Local Self-Government: Historical Journey of Indian Municipalities
- Origin: first municipal corporation in India at Madras
- Bombay and Calcutta Municipal Corporations – In 1726
- Lord Mayo’s Resolution of 1870: on financial decentralisation visualised the development of local self-government institutions.
- Lord Ripon’s Resolution of 1882: ‘Magna Carta’ of local self-government. Ripon, father of local-self government in India.
- Royal Commission on decentralisation in 1907: Its chairman was Hob-house.
- Government of India Act of 1919: Under the dyarchical scheme, local self-government became a transferred subject under the charge of a responsible Indian minister.
- Cantonments Act was passed – In 1924.
- Government of India Act of 1935: Under the provincial autonomy scheme, local self-government was declared a provincial subject.
Evolution of Municipalities in Post-Independence India
- 65th Constitutional Amendment Bill: Initially, 65th Constitutional Amendment Bill (Nagarpalika Bill) introduced in the Lok Sabha in August 1989 to constitutionalise, strengthen and revamping the municipal bodies couldn’t be passed by Rajya Sabha. (During Rajiv Gandhi Government)
- 74th Constitutional Amendment Act, 1992: Eventually, 65th Constitutional Amendment Bill emerged as the 74th Constitutional Amendment Act, 1992 and came into force on 1 June, 1993. (During the prime ministership of P.V. Narasimha Rao)
Jurisdiction Over Urban Local Government
Subject of ‘urban local government’ is dealt with by the following three ministries:
- Ministry of Housing and Urban Affairs – For States
- Ministry of Defence – For cantonment boards
- Ministry of Home Affairs – For Union Territories
74th Constitutional Amendment 1992 with a Focus on Municipalities
The Act aims at revitalising and strengthening the urban governments so that they function effectively as “units of local government”.
Significance of the 74th Constitutional Amendment Act for Municipalities
- New Part IX A: ‘The Municipalities’- Article 243 P To Article 243 ZG
- Twelfth Schedule: Added a new Twelfth Schedule with 18 functional items of municipalities deals with Article 243-W.
- Constitutional Status: to the municipalities – Justiciable part
- Constitutional obligation on State governments to adopt the new system of municipalities in accordance with the provisions of the act.
Salient Features and the Role of Municipalities
Three Types of Municipalities
- A nagar panchayat for a transitional area.
- A municipal council for a smaller urban area.
- A municipal corporation for a larger urban area.
- The governor has to specify a transitional area, a smaller urban area or a larger urban area.
- Composition 243R: All the members of a municipality shall be elected directly by the people of the municipal area through territorial constituencies to be known as wards.
- Election of the Chairperson: of a municipality – As state legislature may determine.
- Special Representation: persons having special knowledge or experience in municipal administration without the right to vote in the meetings of municipality; members of Lok Sabha, Rajya Sabha; state legislative assembly, state legislative council.
- Wards Committees 243S: Consisting of one or more wards having a population of three lakh or more.
- Composition and the territorial area of a ward committee may determine by state legislature.
Reservation of Seats 243T
- SC and ST: in proportionate to their population.
- Women: Not less than one-third of the total number of seats to be reserved for women, further not less than one-third of the total number of offices for chairperson at all levels of the panchayat to be reserved for women.
- Backward Classes: State legislatures may make provisions to decide on the reservation of seats in favour of backward classes.
Duration & Disqualification
- Duration of Municipalities 243U: Provides for a five-year term of office for every municipality.
- However, it can be dissolved before the completion of its term.
- Further, the fresh elections to constitute a municipality shall be completed (a) before the expiry of its duration of five years; or (b) in case of dissolution, before the expiry of a period of six months from the date of its dissolution.
- Where the remainder of the period (for which the dissolved municipality would have continued) is less than six months, it shall not be necessary to hold any election for constituting the new municipality for such period.
- Moreover, municipalities reconstituted after premature dissolution do not enjoy the full period of five years but remain in office only for the remainder of the period.
- Disqualifications 243V: A person shall be disqualified for being chosen as or for being a member of a municipality if he is so disqualified –
- Under any law for the time being in force for the purposes of elections to the legislature of the state concerned; or
- Under any law made by the state legislature.
- All questions of disqualifications shall be referred to such authority as the state legislature determines.
- Minimum Age: 21 years to be the minimum age for contesting elections to panchayats.
Elections, Powers & Finances
- State Election Commission: for each state – The superintendence, direction and control of the preparation of electoral rolls and the conduct of all elections to the municipalities shall be vested in the state election commission.
- SEC conducts elections for Panchayats and Municipalities.
- The state legislature may make provision with respect to all matters relating to elections to the municipalities.
- Powers and Functions 243W: The state legislature may endow the municipalities with such powers and authority as may be necessary to enable them to function as institutions of self-government.
- Preparation of plans for economic development and social justice;
- Implementation of schemes for economic development and social justice as may be entrusted to them, including those in relation to the eighteen matters listed in the Twelfth Schedule.
- Finances: The state legislature may-
- authorise a municipality to levy, collect and appropriate taxes, duties, tolls and fees;
- assign to a municipality taxes, duties, tolls and fees levied and collected by state government;
- provide for making grants-in-aid to the municipalities from the consolidated fund of the state; and
- provide for the constitution of funds for crediting all moneys of the municipalities.
- Finance Commission 243Y: The finance commission (which is constituted for the panchayats) shall also, for every five years, review the financial position of municipalities and make recommendation to the governor who shall place it before the state legislature.
- The central finance commission shall also suggest the measures needed to augment the consolidated fund of a state to supplement the resources of the municipalities in the state (on the basis of the recommendations made by the finance commission of the state).
- Audit of Accounts 243Z: The state legislature may make provisions with respect to the maintenance of accounts by municipalities and the auditing of such accounts.
Application & Planning Committees
- Application to Union Territories 243ZB: Provisions of this part are applicable to the Union territories. But, the President may direct that they would apply to a Union territory subject to such exceptions and modifications as he may specify.
- Exempted Areas 243ZC: Scheduled areas and tribal areas in the states.
- It shall also not affect the functions and powers of the Darjeeling Gorkha Hill Council of West Bengal.
- However, the Parliament may extend the provisions of this part to the scheduled areas and tribal areas subject to such exceptions and modifications as it may specify.
- District Planning Committee 243ZD: Every state shall constitute at the district level to consolidate the plans prepared by panchayats and municipalities in the district, and to prepare a draft development plan for the district as a whole.
- State legislature may make provisions with respect to composition, functions, manner of election of members and chairpersons of such committees.
- Four-fifths of the members of DPC should be elected by the elected members of the district panchayat and municipalities in the district from amongst themselves.
- The chairperson of such a committee shall forward the development plan to the state government.
- Metropolitan Planning Committee: for every metropolitan area 243ZE– To prepare a draft development plan.
- Two-thirds of the members of MPC should be elected by the elected members of the municipalities and chairpersons of the panchayats in the metropolitan area from amongst themselves.
- Bar to Interference by Courts in Electoral Matters 243 ZG: It declares that the validity of any law relating to the delimitation of constituencies or the allotment of seats to such constituencies cannot be questioned in any court.
- No election to any municipality is to be questioned except by an election petition presented to such authority and in such manner as provided by the state legislature.
TYPES OF URBAN GOVERNMENT
There are eight types of urban local governments in India.
Are Municipalities the Cornerstone of Indian Urban Governance?
- For the administration of big cities.
- Three Authorities: Council (legislative wing), standing committee (to facilitate the working of the council) and commissioner (chief executive authority).
- The council consists of councillors directly elected by people and is headed by a Mayor.
1. Municipality:
- For administration of towns and smaller cities.
- Known as municipal council, municipal committee, municipal board, borough municipality, city municipality.
- Unlike Municipal corporation, head of council is called President /chairman and in place of commissioner they have a chief executive officer/chief municipal officer.
2. Notified Area Committee:
- Created for the administration of fast developing town and a town which does not yet fulfil all the conditions necessary for the constitution of a municipality,
- Created by a notification and unlike the municipality.
- An entirely nominated body, by the state government.
- Neither a statutory body nor an elected body.
3. Town Area Committee:
- Set up by a separate act of the state legislature for small towns.
- Semi-municipal authority entrusted with limited civic functions.
- May be wholly elected or wholly nominated or partly elected and partly nominated as provided by the state government.
4. Cantonment Board:
- Municipal administration for the civilian population in the cantonment areas.
- Set up under the provisions of the Cantonment Act, 2006 by the central government.
- Under the ambit of the Defence ministry of the central government. It is partly elected and partly nominated.
- Ex-officio President – Military officer commanding the station.
- Vice president – Elected amongst the elected members of board.
- Executive officer – Appointed by the PRESIDENT OF INDIA.
5. Township:
- Established by public enterprises to provide civic amenities to its staff and workers.
- It is not an elected body and all members are appointed by the enterprise
6. Port Trust:
- Consists of both elected and nominated.
- To manage and protect the ports and to provide civic amenities.
- Created by an Act of Parliament.
7. Special Purpose Agency:
- To undertake designated activities or specific functions.
- These are function based, not area based.
- Known as ‘single purpose’, ‘uni-purpose’ or ‘special purpose’ or ‘functional local bodies’. E.g. Delhi Metro Rail Corporation.
- Established as statutory bodies by an act of state legislature or as departments by an executive resolution.
- Function as an autonomous body and are not subordinate agencies to local municipal bodies.
Notes & Definitions
- NOTE: ULBs do not exist in Arunachal Pradesh.
- Metropolitan area: An area in the country where the population is above 10 Lakh. (Article 243P)
- Presently (as of 2019) there are a total of ten tribal areas (autonomous districts) in the four states of Assam (3), Meghalaya (3), Tripura (1) and Mizoram (3). The 6th schedule deals with administration of tribal areas in the above four states.
Census Guidelines for Defining Urban Areas and Municipalities’ Role
- Minimum population of 5,000;
- At least 75 percent of the male working population is engaged in non-agricultural pursuits;
- Population density is at least 400 per Km.
Municipal Personnel Systems in India
In India, there are three main types of municipal personnel systems. Personnel engaged in urban governance may belong to one of the following:
- Separate Personnel System: In this system, each local body hires, manages, and supervises its personnel. These personnel cannot be transferred to other local bodies. This is the most commonly used system and it supports local autonomy, fostering undivided loyalty.
- Unified Personnel System: In this model, the state government is responsible for the hiring, management, and oversight of municipal personnel. State-wide cadres are established for all urban bodies, allowing personnel to be transferred among local bodies within the state.
- Integrated Personnel System: In this context, employees of state government and those from local bodies are considered part of the same service. The municipal personnel are considered members of the state service and can be transferred not only among local bodies throughout the state but also to departments of the state government. This arrangement means there is no separation between local civil service and state civil service.
Training institutions for municipal personnel include:
- The All India Institute of Local Self-Government (Mumbai), which was established in 1927 as a private registered society.
- The Centre for Urban and Environmental Studies in New Delhi, which was established in 1967 following the Nur-ud-din Ahmed Committee’s recommendations on municipal employee training from 1963 to 1965.
- Regional centres for Urban and Environmental Studies, which were established in 1968 following the same committee’s recommendations. – The National Institute of Urban Affairs, founded in 1976.
- The Human Settlement Management Institute, established in 1985.
Municipal Revenue in India
To perform its functions and pay salaries to its personnel, the urban local bodies need funds. Urban local bodies have five primary income sources:
1. Tax Revenue (Article 243X)
- Property Tax (Most important tax revenue for urban local bodies)
- Entertainment Tax
- Taxes on Advertisements
- Professional Tax
- Water Tax
- Tax on animals
- Lighting Tax
- Pilgrim Tax
- Market Tax
- Toll on Bridges
2. Non-Tax Revenue
- Rent on Municipal Properties
- Fees and fines
- Royalty
- Profits and dividends
- Interest
- User charges, which include payments for public utilities such as water, sanitation, and sewerage charges.
- Grants: Municipal bodies also receive grants from central and state governments under various development schemes for repair, development and management of urban infrastructure and for various urban reforms. The State Governments from their Consolidated Funds of state transfer these funds under Article 243X (c).
- Devolution: The State Finance Commissions from time to time recommend to their respective state governments to transfer funds to local bodies under Article 243Y.
- Loans: Additionally, urban local bodies can obtain loans from the state and other financial institutions for their capital projects, but they must seek approval from the state government to borrow from these financial entities.
CAG Report (2020): Regarding the financial resources of Urban Local Bodies (ULBs), fiscal transfers from the government constituted the largest part of ULBs’ revenue, averaging 63% from 2014-15 to 2018-19.
Central Council of Local Government
The Central Council of Local Government was formed under Article 263 of the Indian Constitution through a Presidential order in 1954. Till 1958 the organisation dealt with matters relating to both rural and urban areas, but after 1958 it has been dealing with matters of urban local governments only. This council is made up of the Minister for Urban Development from the Government of India and the ministers responsible for Local Self Government in the states. This council serves as an advisory body, chaired by the Union minister.
Functions:
- Considering recommending the policy matters.
- Making proposals for legislation.
- Examining the possibility of cooperation between the Center and the states.
- Drawing up a common programme of action.
- Recommending Central financial assistance
How does the Central Council of Local Government impact Municipalities and Urban Development in India?
- Set up in 1954. It was constituted under Article 263 (Inter-state council) of the Constitution of India by an order of the President of India as an advisory body.
- Chairperson: Union minister for Urban Development
- Composition: It consists of the Minister in the Government of India and the ministers for local self government in states.
Phrases and Perspectives on Urbanization in India
- Creeping and haphazard growth of urban centres
- Economic Urbanisation – e.g. china
- Satellite towns, conurbation, Urban sprawl etc.
- Engines of economic growth
- Urban centres act as “economic magnet” and “growth poles”.
- Urban areas support rural areas and vice versa.
- From “Representative democracy to Participatory democracy.”
Can Municipalities Overcome Urban Governance Challenges in India?
- No Effective Devolution of Powers by state governments – Devolution of power is voluntary.
- Lack of Implementation: of State and Union finance commission recommendations accompanied by no Action Taken Report.
- Low Tax Assessment and Collection Efficiency: along with less avenues for taxation. Diluted accountability mechanism.
- Emergence of parallel and parastatal bodies: such as HUDCO, MHADA.
- The Municipal Councils/Municipalities have restricted local autonomy as compared to the Municipal Corporations; with more pervasive state control.
- Lack of Consistent and Coherent Urban Development Policy: faulty and improper urban planning coupled with poor implementation and regulation.
- Lack of Proper Monitoring System: in place results in inefficient and improper functioning of Local Urban Bodies.
Strategic Suggestions for Municipalities in India
- Principle of Subsidiarity, Democratic Decentralisation, Delineation of Functions, Devolution in Real Terms, Convergence, Citizen Centricity.
- A local body Ombudsman should be constituted.
- Direct Transfer of Funds: from Centre to ULBs and exploring additional avenues for tax revenue realisation- Recommended by 14th FC.
- Separate Standing Committee: of the State Legislature for the local Bodies.
- Clear Delineation of Functions: for each level of urban local government
- Implementation of Elected Mayor Model – Bombay model: Urban planning and implementation today need to be continuous rather than a once-in-20-year process..
- Broadening people’s participation in governance.
- Activity mapping in ULBs to eliminate overlapping of functions among 3 tiers.
- Credit rating of ULBs by independent third party -> Municipal Bonds.
- Fiscal incentives to states: To encourage effective devolution to the panchayats in functions, finances, and functionaries (3Fs).
- Resolving Anomaly: in policy implementation (By commissioner) and accountability (By Mayor)
- Word “MAY” should be replaced by “SHALL” in the text of the 74th amendment act.
What are your Feelings