Rajasthan has become the 5^thState in the country to successfully undertake Urban Local Bodies (ULB) reforms stipulated by the Department of Expenditure, Ministry of Finance and has thus become eligible for additional reform linked to borrowing.

Which are the four other States?

: They are Andhra Pradesh, Madhya Pradesh, Manipur and Telangana, who have completed ULB reforms.

Now try this PYQ:

Q.The Constitution (Seventy-Third Amendment) Act, 1992, which aims at promoting the Panchayati Raj Institutions in the country, provides for which of the following?

1. Constitution of District Planning Committees.
2. State Election Commissions to conduct all panchayat elections.
3. Establishment of State Finance Commissions.

Select the correct answer using the codes given below:

(a) Only 1

(b) 1 and 2 only

(c) 2 and 3 only

(d) 1, 2 and 3

What are the ULB reforms?

The four citizen-centric areas identified for reforms are:

1. Implementation of One Nation One Ration Card System
2. Ease of doing business reform
3. Urban Local body/ utility reforms
4. Power Sector reforms.

The set of reforms stipulated by the Department of Expenditure are:

(a) The State will notify:

• Floor rates of property tax in ULBs which are in consonance with the prevailing circle rates (i.e. guideline rates for property transactions) and;
• Floor rates of user charges in respect of the provision of water supply, drainage, and sewerage which reflect current costs/past inflation.

(b)   The State will put in place a system of periodic increases in floor rates of property tax/ user charges in line with price increases.

Why need such reforms?

• Reforms in ULBs and the urban utility reforms are aimed at the financial strengthening of ULBs to enable them to provide better public health and sanitation services to citizens.
• Economically rejuvenated ULBs will also be able to create good civic infrastructure.

Back2Basics: Municipal Governance in India

• Municipal or local governance refers to the third tier of governance in India, at the level of the municipality or urban local body.
• Urban Local Bodies (ULBs) are small local bodies that administer or govern a city or a town of a specified population.
• They are vested with a long list of functions delegated to them by the state governments.
• These functions broadly relate to public health, welfare, regulatory functions, public safety, public infrastructure works, and development activities.
• There are several types of Urban Local Bodies in India such as Municipal Corporation, Municipality, Notified Area Committee, Town Area Committee, Special Purpose Agency, Township, Port Trust, Cantonment Board, etc.

Development through history

• It has existed since the year 1687, with the formation of Madras Municipal Corporation, and then Calcutta and Bombay Municipal Corporation in 1726.
• In the early part of the nineteenth century, almost all towns in India had experienced some form of municipal governance.
• In 1882 the then Viceroy of India, Lord Ripon, known as the Father of Local Self Government, passed a resolution of local self-government which lead to the democratic forms of municipal governance in India.
• In 1919, a Government of India Act incorporated the need of the resolution and the powers of democratically elected government were formulated.
• In 1935 another Government of India act brought local government under the preview of the state or provincial government and specific powers were given.

Changes after the 74th Amendment (1992)

• It was the 74th amendment to the Constitution that brought constitutional validity to municipal or local governments.
• Until amendments were made in respective state legislation on an ultra vires (beyond the authority) basis and the state governments were free to extend or control the functional sphere.

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