Institutional_Strengthening - JnNURM

Module 7InstitutionalStrengtheningRegionalCapacity Building HubC E P T U N I V E R S I T YKasturbhai Lalbhai Campus, University Road,Navrangpura, Ahmedabad

COMPONENTBACKGROUNDINTENDEDAUDIENCE(S)LEARNINGOBJECTIVESMODULEOVERVIEW /contents /structureMODULE DELIVERYOUTLINEMODULEACTIVITIESSUPPORTINGMATERIALSMODULE DELIVERYMODULEDEVELOPERDESCRIPTIONJnNURM, as envisaged by Hon’ble Prime Minister Dr Manmohan Singh, isessentially a reform-led urban renewal programme aimed at comprehensivecapacity building and institutional strengthening primarily at ULB level andsubsequently at the level of parastatals and state governments. Hence,institutional strengthening is considered to be the cornerstone of the hugeinvestments being made across the mission cities in the country.The module addresses the training needs of technical staff of city governmentsand Urban development authorities along with other participating organizationssuch as the state-level para-statals and state government departments who aredirectly or partially involved in the process.The primary aim of this module is to help the officials and functionaries todevelop a larger perspective of institutional and organizational development sothat, in turn, they become enable to sustain the investments being made throughJnNURM. It is also intended to develop a basic understanding of key issues andtheir prospective solutions.This module has been structured in such a manner so that it provides an overallunderstanding of the key issues pertaining to institutional development, goodgovernance, delegation & devolution of power, resource optimization andrationalization, innovative illustrations through case studies of live examples.Awareness• Over view ofinstitutionaldevelopmentissues andchallenges• Rationale ofreforms asenvisaged underJnNURMKnowledge• Evolution ofmunicipalgovernance• Improvement ofBasic systems inthe ULBs• Resourcemobilizationsources• Innovativegovernance• Mandatory andoptional reformagenda ofJnNURMSkills• Comprehensiveunderstanding ofreforms as aprelude to capacityenhancement at theULB/parastatallevel• Commonunderstanding forpolicy makers andexecutives/functionariesModule activities consist of:• Presentations using powerpoint for project implementation• IInteraction, Group Discussion and peer learning to find out differencesand issues pertaining to resource mobilization, good governance, etc.All supporting materials are given in a CD enclosed with this Module.Please send feedback on how you used the material, comments on how they canbe improved and additional materials to rcbh.cept@gmail.comC E P T U N I V E R S I T Y

CONTENTS OF ENCLOSED COMPACT DISK (CD)1) Softcopy of RCBH Module‐7 (In PDF format)2) Reference Material for all sub Modules3) Institutional Strengthening Case Studies4) JnNURM related documents5) Other Documents related to:• JnNURM reformsagenda• Financial Manaement• Career Development• Personnel Management & Skill Development• Institutional Structure of ULBs

MODULE 7: INSTITUTIONAL STRENGTHENING1 INSTITUTIONAL STRENGTHENING FOR EFFECTIVE URBAN MANAGEMENT ...................................... 31.1 The Reform ...................................................................................................................................... 21.2 Reform components ........................................................................................................................ 32 KEY REFORM AGENDA & IMPLEMENTATION ISSUES ....................................................................... 42.1 Municipal Elections .......................................................................................................................... 42.2 Constitution of District Planning Committee and Metropolitan Planning Committee ................... 52.3 State Finance Commission ............................................................................................................... 82.4 Convergence of Urban Management Functions ............................................................................ 103 STEPS FOR IMPLEMENTATION OF REFORMS INCORPORATED IN THE MUNICIPAL ACT .................. 123.1 Integration of City Planning and Delivery Functions ..................................................................... 133.2 Community Participation Law ........................................................................................................ 133.2.1 Participative democracy ......................................................................................................................... 143.2.2 Strategy of Community Participation ..................................................................................................... 173.2.3 Consultation Processes .......................................................................................................................... 173.2.4 Development sectors for consultation ................................................................................................... 183.3 Public Disclosure Law ..................................................................................................................... 193.3.1 Right to Information Act, 2005 ............................................................................................................... 193.4 E‐Governance ................................................................................................................................. 213.5 Property Tax ................................................................................................................................... 223.6 User Charges .................................................................................................................................. 243.7 Internal Earmarking of Funds for Service to Urban Poor ............................................................... 243.8 Provision of Basic Services to Urban Poor ..................................................................................... 253.9 Encouraging Public Private Partnership ......................................................................................... 264 INSTITUTIONAL STRUCTURES OF ULBS .......................................................................................... 274.1 Evolution of Municipalities ............................................................................................................ 274.1.1 Historical evolution from the British era ................................................................................................ 274.1.2 Statutory provisions for creation of the Municipal Units ....................................................................... 284.2 Constitutional Provision for Urban Local Bodies ........................................................................... 284.3 Constitution of Municipalities, Elections & State Election Commissions ...................................... 294.3.1 Constitution of Municipalities ................................................................................................................ 294.4 Twelfth Schedule Article 243W ...................................................................................................... 324.4.1 Functions incorporated to the ULBs ....................................................................................................... 324.5 Some Major Provisions Introduced by the 74th CA Act ................................................................ 324.6 Issues of Implementing 74th CAA .................................................................................................. 334.6.1 Role Overlapping & Conflict with multiple institutions .......................................................................... 344.7 Constitution of Municipalities & Typology of Municipal Administration ...................................... 344.7.1 ULB systems and procedures ................................................................................................................. 354.7.2 ULB operations and procedures ............................................................................................................. 384.8 Process of Core Municipal Services ............................................................................................... 385 CAPACITY BUILDING NEED OF THE ULBS AND JNNURM ................................................................. 405.1 Key Institutional Development Issues Faced by the ULBs ............................................................. 40i

5.2 Planning ......................................................................................................................................... 405.3 Background of ULB level Perspective Planning .............................................................................. 405.4 Introduction of Comprehensive Development Plan ...................................................................... 415.5 Process of CDP ............................................................................................................................... 415.5.1 CDP & Sectoral Master Plans ................................................................................................................. 415.5.2 Important Features of CDP..................................................................................................................... 415.5.3 A brief overview of DDP as prepared under KUSP in the KMA ULBs ..................................................... 42DDP ‐ Stakeholders ............................................................................................................................................... 436 FINANCIAL MANAGEMENT ........................................................................................................... 446.1 Municipal Revenue ........................................................................................................................ 446.2 Tax .................................................................................................................................................. 446.3 Fees and Tolls ................................................................................................................................. 466.4 User Charges .................................................................................................................................. 466.5 Licenses .......................................................................................................................................... 516.6 Grants ............................................................................................................................................. 516.7 Municipal Budget ........................................................................................................................... 516.8 Improved Accounting System ........................................................................................................ 536.9 Cost Management .......................................................................................................................... 536.10 “Why Change” ................................................................................................................................ 55ii

Module 7: I nstitutionalStrengthenn ingPage | 21.1 The ReformSince the early 1990s Government of India (GoI) has undertaken several reforms initiatives aimed atdecentralizing urban governance and making them more effective, efficient andcitizen friendly. UnderJnNURM, the reforms agenda have been brought forward inorder to prodive them due weightage to sustainthe envisaged growth and investments over the years. Since reforms are cross‐cutting, a combination ofState level, ULB level andconcurrentlist of reform agenda have been identified.One of the objectives of JnNURM is to ensure improvement in urban governancee and servicee delivery tofacilitate ULBs become financially sound and sustainable. A Memorandum of Agreement (MoA) betweenStates/ULBs/Parastatalagencies and the Government of India, a prerequisite for accessing the Centralassistance, would spell out specific milestones to be achieved for eachitem of reform. All mandatory andoptional reforms shall becompletedwithin the Mission periodThe reformsare of two types viz., mandatory and optional. They have to be implemented both at state andULB levels including parastatals. The optional reforms do not mean that the stategovernments and ULBshave the option to implement or not to implement these reforms. They also need tobe implemented duringthe Mission period, butthe local governmentshave the option to choose any two reforms per year forimplementation. In that sense they are also mandatory.The Reformsunder JnNURM are aimed at:• strengthening urban governments and to decentralize anddevolve functions, finances andfunctionaries tothem so as to enablee them to function as self‐governing institutions providingservices efficiently and effectively;• provide for an integrated governance framework with transparency and clear lines of authority andaccountability toachieve theobjectives of ‘good urban governance’;• facilitate and promote inclusiveness, civic engagement and effective participation of thecivil societyin city management;• contribute towards financial sustainability of cities ‐ strengthenn the financial base of the cities andmake them bankable;• enable the citiesto work towards planned and integrated provision and operation and maintenanceeof infrastructure;• develop partnerships with public, private and other sectors for better provision anddelivery ofservices;• extend the canvas of information technology and e–Governancce to all aspects of city managementfor efficient, effective and timely servicee delivery;• promote pro‐poor urban governance and work towards slum free cities withuniversal, adequate andaffordable housing and basicservices;• ensure renewal and revival of inner cities; and• Contribute to municipal capacity enhancement.Regional Capacity Building Hub (RCBH)MissionDirectorate, JnNURM, MoUD, GoIModule Prepared by:CEPT University, Ahmedabad

Module 7: I nstitutionalStrengthenn ingPage | 31.2 Reform componentsMandatory Reforms‐ State Level• Implementationn of 74th Constitutional Amendment Act.• Repeal of ULCRA.• Reform of Rent Control Lawsbalancing the interests of landlordsand tenants.• Rationalisation of Stamp Duty to bring itdown to no more than 5 per cent.• Enactment of the Public Disclosure Law.• Enactment of the Community Participation Law to institutionalize citizen’s participation• Assigning or associating elected ULBs with “city planning function”.Mandatory Reforms – ULBs and Parastatals• Adoption of modern accrual‐based double entry system of accounting• Introduction of a system of e‐governance using IT applications, such GIS and MIS• Reform of property tax.• Levyof reasonable user charges with the objectivee of recoveryof full recovery of cost of O&M orrecurring costs.• Internal earmarking of fundsin the budgets for basicservices to the urban poor.• Provision of basic services to the urban poor including security of tenure at affordable prices,improved housing, water supply and sanitation.Optional Reforms ‐ Common to States, ULBs and Parastatals• Revision of byelaws to streamline the approval process for construction of buildings, development ofsite,etc.• Simplification oflegal and procedural frameworks for conversion of land from agricultural to non‐agricultural purposes.• Introduction of Property Title Certification System inULBs.• Earmarking at least 20‐25 per cent of developed land in all housing projects (both publicand privateagencies) for EWS and LIG category witha system ofcross subsidisation.• Introduction of computerised process ofregistrationof land andproperty.• Revision of byelaws to makerainwater harvesting mandatory inall buildings and adoption of waterconservation measures.• Byelaws for reuse of recycled water.• Administrativereforms i.e.,rationalisation of staffing pattern, reduction in establishment costs,capacity building, etc.• Structural reforms.• Encouraging public‐private partnerships (PPP).Regional Capacity Building Hub (RCBH)MissionDirectorate, JnNURM, MoUD, GoIModule Prepared by:CEPT University, Ahmedabad

Module 7: I nstitutionalStrengthenn ingPage | 6State ‘Town and Planning Acts’ provide the legal frameworkfor integrated planning. However, almost all ofthese laws pre‐date the74th Constitution Amendment and do not provide a formal role forthe DistrictPlanning Committee. This legislation needs to be modified on the basis of the Model Urban and RegionalPlanning andDevelopment Law (revised) prepared by the Ministry of Urban Development as part of UrbanDevelopment Plans Formulation andImplementation (UDPFI) Guidelines. The model law includes provisionssfor constituting District Planning Committees. It also provides guidelinesfor preparing Development Plan forthe district. West Bengal enacted a separate District Planning Committee Act in 1994 thatt created itsstructure, functional mandate, and rules of operation. In the case of Madhya Pradesh it has been claimedthat the District Planning Committee is reallya step forward towards the establishmentof a districtgovernment. The DPC has been given the powers to supervise and monitor district level schemess undertakennby different departments of the Government. Amended in 1999, the DPC Act of 1995 has also given to it thepowers of administrativeapproval and financial sanctions subject to some limits.Possible Conflict of Jurisdiction:Some states have misconceptionss about the possible conflict of jurisdiction between MPCsand DPCs.Since metropolitan areas are predominantly urban, the rural or the Panchayat component in the MPCswould be rather small. Where urban areas are co‐terminus with revenue districts, such asBangalore,Chennai or the Calcutta, the problem does not arise at all. And in such cases a DPC is notnecessary.Where a part of a revenue district is included in a metropolitan area, State Governments can suitablyredefine the boundaries of a DPCor MPC appropriately. Alternatively, a functional delineation is alsopossible. The Tamil Nadu Government defined the MPC for the Chennai metropolitan area to also be aDPC for those portions of the revenue districts which areincluded inthe metropolitan area. Under theConstitution of India, it is up to the State Governments todetermine the jurisdiction of the D PC and theMPC to avoid conflicts, if any.As focal points of economic growthand servicee delivery, metropolitanareas need quality transport, watersupply, waste management, police, public health, etc. Much of this infrastructurehas to be designed withgeographic and population considerations that do not always correspondwith local governmentjurisdictions.Because major infrastructure often serves multiple ULBs it is not possible for individual city corporations ormunicipalities to address all of them. Big cities are really agglomerations of several municipalities. GreaterMumbai is somewhat ofa misnomer because it does not cover all of theMumbai Metropolitan area; Thane,Bhiwandi, Ulhas Nagaror Navi Mumbai areall different Corporations. Thesee multi‐municipal urbanagglomerations have reached theirpresent size and configuration over time. Urban growth has overruntraditional boundaries, and there is often stifff resistance to annex/consolidate multiple jurisdictions TheCalcutta metropolitan area now comprises of three corporations, thirty‐four municipalities and numerousnon‐municipal urban localities. It isenvisaged that the Metropolitan Planning Committee shall prepare adraft development planconsolidating the plans of each municipalityand panchayat in the MetropolitanArea.DPCs and MPCs are similar in design, but serve differenttypes of population centres. DPChave morerigorously defined jurisdictions consistent with India’s district‐based administrative structure. In contrast,MPC is based on actualurban growth, and therefore, its boundaries will be moreamorphous over time.Regional Capacity Building Hub (RCBH)MissionDirectorate, JnNURM, MoUD, GoIModule Prepared by:CEPT University, Ahmedabad

Module 7: I nstitutionalStrengthenn ingPage | 7Hence, an MPC could theoreticallycut across multiple districts. Thesee committees formally recognize theemerging need of institutional arrangements for planning at the appropriate spatial level. They serve as aplatform forcoordination between local aspirations and common issues of developmentThe JNNURMreform reinforces the existing provisions in theConstitution and requires the states to considerthe following:• Review existing Town Planning laws andappropriately modify them on the basis of the Model Urbanand Regional Planning and Development Law (revised) prepared by the Ministry of UrbanDevelopment as part of Urban Development Plans Formulation and Implementation (UDPFI)Guidelines.• Make appropriate enabling provisions in the state municipal legislations toconstitute DPC/MPC asenvisaged under Articles 243ZD and 243ZE. The Ministry of Urban Development has already issuedan advisory for constituting MPCs (Annexure I). The National Planning Commission has also provideddguidance on District Planning Committees through a Manual on Integrated District Planning availableat http://planningcommission.nic.in/reports/genrep/mlp_idpe.pdfSTATUS OFCONSTITUTION OFCOMMITTEE IN STATESMETROPOLITAN PLANNING COMMITTEE & DISTRICTPLANNINGState74th CAA (Constitution of DPC) 74 th CAA (Constitution of MPC)Total Achieved1 Andhra Pradesh2 Arunachal Pradesh3 Assam4 Bihar5 Chandigarh6 Chattisgarh7 Delhi8 Goa9 Gujarat10 Haryana11 Himachal Pradesh12 Jammu and Kashmir13 Jharkhand14 Kerala15 Karnataka16 Madhya Pradesh17 Maharashtra18 Manipur19Achieved4AchievedAchievedAchievedAchieved3 / Achieved3 / AchievedAchieved34Achieved4 / AchievedAchievedAchieved343 / AchievedNot ApplicableNot Applicable3Not ApplicableNot Applicable2 / AchievedNot ApplicableNot Applicable443 / AchievedNot ApplicableRegional Capacity Building Hub (RCBH)MissionDirectorate, JnNURM, MoUD, GoIModule Prepared by:CEPT University, Ahmedabad

Module 7: I nstitutionalStrengthenn ingPage | 8State19 Meghalaya20 Mizoram21 Nagaland22 Puducherry23 Punjab24 Orissa25 Rajasthan26 Sikkim27 Tamil Nadu28 Tripura29 Uttarakhand30 UttarPradesh31 WestBengal74th CAA (Constitution of DPC) 74 th CAA (Constitution of MPC)4Not Applicable3Not Applicable3Not Applicable3Not Applicable3 / Achieved3AchievedNot ApplicableAchieved34Not Applicable3 / Achieved34 / AchievedNot Applicable4Not Applicable3 / Achieved7AchievedAchievedSource: As per MOA commitments, MoUD• Where MetropolitanPlanning Committees (MPCs) are required to be set up, State municipal laws andregulations should determine the functional and territorial jurisdiction of the DPCs as distinct from theMPCs. Where Metropolitan Planning Committees exist for predominantly urbandistricts, they should bedeemedd as DPCs, as no separatee DPC is necessary.• Define the composition, role and responsibilities of MPC/DPC as well as their jurisdictionsas envisagedunder the constitutional provisions including specifing the organisation which will function as thetechnical and administrative secretariat of the MPC/DPC.2.3 StateFinanceCommissionArticle 243Yof the Constitution provides that a Finance Commission should be constituted, as defined byarticle 243 I,to review the financial position of Municipalities and Panchayats. Based on its review, the StateFinance Commission (SFC) should make recommendations tothe Governor about the distribution of revenueebetween theState and Municipalities including proceeds oftaxes, duties, tolls and fees. As part of this, theSFC can recommend theassignmentof new fiscal authority to Municipalities and better designs of grants‐in‐aid from thestate in order to improve the financial position of the Municipalities.The Governor of every state is required to constitute a SFC every five years to reviewthe financial position ofall local bodies (panchayats and Municipalities).The Governor may alsorefer specific matters tothe SFC forconsideration. Even though the mandate for the SFCs is clearly statedin the Constitution, the manner offunctioning is determined by the SFC and state government. The Governor is required to publish everyrecommendation made by the SFC along with a memorandum explaining the action taken thereon for theLegislature of the State.Regional Capacity Building Hub (RCBH)MissionDirectorate, JnNURM, MoUD, GoIModule Prepared by:CEPT University, Ahmedabad

Module 7: I nstitutionalStrengthenn ingPage | 9India’s Thirteenth Finance Commission has issued various guidance notes to help link the centre and statefinance commissions. The states canaccess these guidance notes from http://fincomindia.nic.in. The annexof this Primer also has the Advisory issued by MoUD on constitution of SFCs.Rajasthan Municipalities Ordinance 2008The Rajasthan Government ratified the new municipal lawon September 26, 2008. It is mainlybased onModel Municipal Law. It has many enabling provisions toimplement reforms under JNNURM like: (a)transferring various functions to ULBs, (b) introducing taxon land and buildings on unit area basis, (c)forming Area Sabha for community participation, (c) establishing MPCs and DPCs, (d) making TownPlanning a municipal function, (e) introducing rainwater harvesting, (f) encouraging PPP, (g) introducingimproved accounting,(h) introducing public disclosure, (i) setting up SFC and implementing itsrecommendations, etc. There arealso some very innovative enabling provisionss for issuingmunicipalbonds, comprehensivee debt limitation policy, setting up a municipal service cadre, etc. The Ordinancedivided municipal functions into core (ULB responsibility),governmentassigned (state responsibility) andother functions. As progressive asit is, water supply and sewerage are not identified as corefunctionsbut still remain state assigned.JNNURM requires the following steps to be taken by states for implementing this reform:• Provision in the municipal laws to constitute State Finance Commissions atthe expiration of everyfifthyear for thefinancial review of local bodies and to make recommendations to the Governor.• Define the composition of the State Finance Commission and thecriteria for its membership• Setup the timeframe for preparing SFCs recommendations• Determine a timeframe to submit the report before the StateLegislaturee and prepare an ActionTaken Report bythe Government on therecommendations of the SFC recommendations.Thirteenth Finance Commission ReformsThe recommendationsof the Thirteenth Finance Commission areof far reaching significance forstrengthening local governance in India. The Commission initiated a process to reform and vitalise the self‐governing institutions toenable them to play the role the constitutionn has envisaged through the SeventyThird and Seventy Fourth Constitution Amendment Acts. The Commission’srecommendations willstrengthen and take forward the urban governance reformagenda launched by the Government of Indiaunder Jawaharlal Nehru National Urban Renewal Mission (JnNURM) in 2005. The Thirteenth FinanceCommission(13th FC) attempted to strengthenn the finances of urbanlocal bodies (ULBs) in the broadercontext of strengtheningg urban governance.The previous finance commissions made several recommendations to improve finances and governance oflocal bodies. Making a departure,the 13th FC made implementation of some its recommendationsconditional to access part of the funds it recommended to the local bodies.The conditions broadlyrelate to improvingconditions/reforms suggested are:1. Constitute State Property Tax Boardlocal finances and strengtheningurban governance. TheRegional Capacity Building Hub (RCBH)MissionDirectorate, JnNURM, MoUD, GoIModule Prepared by:CEPT University, Ahmedabad

Module 7: I nstitutionalStrengthenn ingPage | 102. Fully empower ULBs to levy PT3. Constitute Local Body Ombudsmen4. Benchmarks for service delivery5. Fire‐hazard Response Planin metros6. Electronic transfer of grants in 5 days7. Qualificationsfor members of SFCs8. CAG guided accounts and audit system9. Introduction of a supplement to budgetThe Commission also made several other non‐mandatory recommendations to strengthen governance andthey includespeedy implementation JnNURM reform on assigning/ associating ULBs with planning anddelivery functions, use of 13th FC grants for revamping fire services, need to formulate guidelines forconstitution or upgradation of Nagar Panchayats, strengthening Local Fund Audit Department includingcapacity building and personnel augmentation, need for the ULBs todevelop and use comparable andaudited data, etc. Implementationof these recommendations will strengthen bothurban governance andfinances in India.2.4 Convergencee of Urban Management FunctionsArticle 243Wof the Constitution requires Statelaws to endow the Municipalities“with such powers andauthority asmay be necessary to enable them to functionn as Institutions of self government” ”. A TwelfthSchedule to the Constitution provides recommended list oflocal functions which states may bylaw endowto to urban local bodies.The JNNURMreform seeks to implement Article 243W of the Constitution by transferring some functionsfrom the state to ULBs. These functions relate to local municipal services and therefore are best managedby the ULBs. This creates local accountabilityof the ULB to the electorate in those areas where citizensexpect theirlocal government to act. It also provides the ULB with tools to influence the development andmanagement of its city, which are fundamental purposes of constituting a third level ofdemocraticcgovernment.The Model Municipal Law (MML) circulated by Ministry of Urban Development provides sufficient guidanceto states towards implementation of these provisions of 74th CAA. The MML acts as a resourcee from whichhstates can tailor their own municipal acts. The MML classifies municipal functions into 3 categories, namely :“Core municipal functions”, including water supply; drainage and sewerage, solid waste managementt;economic and social development plans; transportation systems including construction and maintenance ofroads, bridges, ferries and other inland watertransport systems;; community health and protection ofenvironment; and markets and slaughterhouses.Additional “functions assigned by Government” ”, so long as there is appropriate underwritingof the costs,Such functions may include primaryeducation, curative health, transport, supply of energy, arrangementsfor fire prevention and fire safety, and urban poverty alleviation.Regional Capacity Building Hub (RCBH)MissionDirectorate, JnNURM, MoUD, GoIModule Prepared by:CEPT University, Ahmedabad

Module 7: I nstitutionalStrengthenn ingPage | 111“Other functions”, which have beenfurther sub‐classifiedinto 6 categories, include town planning, urbandevelopment and development ofcommercial infrastructure; protection of environment;health andsanitation; education and culture; public welfare; and community relations.In accordance with the74 th CAA, the Model Municipal Law allows Municipalities to directlyprovide orarrange through another agency any of the “core municipal services” so long as responsibility andaccountability for the service remains with the municipality. This means that it possible to contract someservices to outside agencies, either by the public sector enterprises,quasi‐government agencies or theprivate sector. However, once functions is assigned to ULB, the staff and funds tocarry out that functionnshould also be made available to ULBto performthat function.The processs of assigningg these various functions is as important as their substance. The Kerala Act clearlysays that functions are to be assigned by law and once so assigned can be withdrawn or modified only by asimilar law. This is an important aspect because in many States, the assignment of functions is done byindividual State regulations or Government Orders, even if their initial assignment is through a state law. Ineffect, this means that the functions continueto be subject to therules and regulations of the stategovernmenteven though the responsibility has been (or is in process of) being transferred to the ULB. Toavoid this problem, states should engage with urban local bodies in strategizing how to best transfer thefunctions rather than issue top downdirectives.The reform also recognizes the existence of parastatel bodies at the state level as well as the limited internalcapacities ofurban locall bodies, it allows parastatels or other agencies to operate, maintain, andown assetssand collect user charges for delivery of these municipal services, so long as they are accountable to ULBsthrough appropriate arrangements.These arrangements canrange fromestablishing a task force, formationof committee at ULB level, providing appropriate role to Mayor/Commmissioner/Standing Committee withinthe parastatal agency, to appropriate contractual arrangements. However, ULBs should be responsible andaccountablefor deliveryof services with definedd service levels no matter what agency physicallyy delivers theservice.JNNURM reform requires the following steps to be taken by states for implementingthis reform:• Decide on the functions to be treated as Core, Assigned, and Other Municipal Functions. Functionsmayinclude items which are not covered under the Twelfth Schedule, e.g. . The Kerala Act is by farthe most elaborate list of functions assigned to theMunicipalities. Under Section 30 of the KeralaaMunicipality Act1994, 165 functions into 29 groups of items have been transferred to the localbodies through the First Schedule to theAct. However it may benoted that in some of the states likeKerala and WestBengal, fireservice has not been transferred to the local bodies and there are policydecisions to keep them under the statecontrol. However in Maharastra, the fire service also beentransffered to the ULBs.• For Assigned Functions, State Government has to consider and decide when it is appropriate totransfer them, given municipal capacities, and what funding mechanism will underwrite the services.• Constitute committees andtask forces to ensure that accountabilityof parastatel agencies/Development authorities is transferredto ULBs. For example, provisionss to make City/ Mayors/Commissioner as members of the respective Development Authority/ Parastatal.• Consider how the planning, development, construction, operation and maintenance roles forservices are best allocated among the State Government Departments, developmentauthorities,parastatal agencies, and Municipalities to both improve delivery and promote local responsibility.Regional Capacity Building Hub (RCBH)MissionDirectorate, JnNURM, MoUD, GoIModule Prepared by:CEPT University, Ahmedabad

Module 7: I nstitutionalStrengthenn ingPage | 12• The assignmentof functions should beby substantive law rather than by rules and regulations,therefore based on the above, make appropriate provisions in the municipal laws for thesame.• Make provisionss to transfer/assign funds, staff, andorganization assets to the ULB agency that willbe responsible for the particular function. Here again, Kerala has made an elaborate arrangementsto transfer the Institutions, and staff along with functions.3 STEPSFOR IMPLEMENTATIONOF REFORMSINCORPORATED INTHE MUNICIPAL ACTHaving emerged as thethird tier of government in India, municipalities now must own “the politicalaccountability” for the roles assigned to them under the 74th Amendment and JNNURM, and share the“technical, financial, andadministrative accountability” with others as appropriate.Following steps are required for implementing this reform at state level:• Prepare and discuss the policy framework and promoting understandingof the Constitutionaalprovisions as result of 74th Amendment and JNNURMthrough state level workshops.• State governments should set a committee to reviewexisting acts.• Based on these consultations, the stateand ULBs should agree on areas which require legislativeechanges• Draft and amend the relevant changes to enable municipalitiees to function as institutions of self‐government.• Ensure that the legislative processes arecompleted for amending/framing new municipal acts withina rigid time frame.Devolutionof Functions – Issues• Rationale and urgency for devolution of functions asstipulated in the twelfthschedule?• Howlack of devolution undermines the constitutional status of ULBs as well as their accountability?• Is it possible to continue with the parastatals or state agencies with the functions of thelocal bodiesat the same time making them accountable to ULBsand what mechanisms/ /models are required forthis?• Issues related totransfer of functionaries to ULBs?• What are the operational challenges in complying with the JNNURM MOArequirements and whatstrategy is required to address them?• What capacity support is required to achieve this?District Planning Committees & Metropolitan PlanningCommittees ‐ Issues• What role should be assigned to DPCs & MPCs in integrating the city development plans with theDistrict Development Plan? Should such integration be made mandatory?• Howto strengthen the organization andworking ofDPCs & MPCs? Who should provide secretariatsupport to them?• Should the DPC have only advisory role or should it have executive powers and functions?• Is there any need for guidelines for integration of city development plans and district developmentplan/Metropolitan Plans?• Should the approval of CDPsby the DPC/ /MPC be made mandatory?Regional Capacity Building Hub (RCBH)MissionDirectorate, JnNURM, MoUD, GoIModule Prepared by:CEPT University, Ahmedabad

Module 7: I nstitutionalStrengthenn ingPage | 13• Should the SFCs consider the resource needs ofdistrict developmentplans prepared by theDPCs/MPCs?• What are the operational challenges in complying with the JNNURM MOA requirementswith regardto DPCs and MPCs and whatstrategy is required to address them?• What capacity support is required to achieve this?3.1 Integration of City Planning and Delivery FunctionsReform Elements• City Plans to be placed before the MPC/ DPC• Integration of ULBs with thecity planning function• Integration of ULBs with thedelivery of services• Achieving institutional convergenceTransforming State of Orissa Public Health Engineeringg Organization into a CorporatizedEntity forBhubaneswarUnder the 74th ConstitutionalAmendment, the Government of Orissa ( GOO) is transferringmanagement of water supply andsewerage services (WSS) to ULBs. At present,the WSS services areprovided by the State Public Health Engineering Organization (PHEO).PHEO has been functioning as anarm of State Government in providing WSS services to thepublic across 103 ULBs covering a populationof 56 lakh. In case of Bhubaneswar, Government of Orissahas decided that the assets, liabilities, rights,claim, proceedings, etc. concerning that jurisdiction will be transferred to the BhubaneswarMunicipalCorporation (BMC). Then, PHEO would create a new Corporatized Entity (CE) that can manage WSSservices inthe city. This CE would be given a managementcontract byBMC to operate and maintain thenewly transferred city assets. This contract with CE will be based on performance measurements includespecific service standards, operations efficiency, coverage, and subsidy. Thus the CE will be able toprovide efficient WSS services while the qualityof the services is accountable to BMC.Issues• What are the experiences sofar in devolving these functions?• What are the operational challenges?• Do we have successful models for implementation?• What strategy and capacity support is required for overcoming the challenges?3.2 Community Participation LawCommunity participationcan be loosely defined as the involvement of people in a community in projects andpolicies thatt affect their lives. People cannot be forced to participate but given an opportunity whereverpossible to share their views and ideas in decisions that affect their lives.This is held to be the basic humanright and a fundamental principal of democracy.Active community participation is the key tobuilding an empowered community and state. Ensuringappropriate participation of the community leads to the effective functioning of the government initiativesRegional Capacity Building Hub (RCBH)MissionDirectorate, JnNURM, MoUD, GoIModule Prepared by:CEPT University, Ahmedabad

Module 7: I nstitutionalStrengthenn ingPage | 173.2.2 Strategy of CommunityParticipationThe following strategy may be adopted by theUrban Local Bodies (ULBs).The Urban Local Bodies shouldensure effective and meaningful participationof all aspects of the society. The key objectives of publicinvolvementare• to obtain local and traditional knowledge that may be useful for decision‐making;• facilitate consideration of alternatives, mitigation measures and tradeoffs;• ensure that all sections of the society arebenefitted by the intervention equitably.• reduce conflicts that may arise on contentious issues;• provide an opportunity for the public toinfluence project design in a positive manner, due to whichha sense of ownership is created• improve transparency and accountabilityof decision‐making and• Improve public confidence inthe governance process.The purposeof public involvement is to• Inform the stakeholders about the proposal and its likely effects;• Present their views and concerns;• Takeaccount of the information and views of the public and incorporate possible suggestions.The public isthe primarystakeholder in planning and prioritization, theyuse, own and pay for infrastructurethus they have a major influence in decision making for infrastructure. Also public participation in thedecision making is becoming inevitable in the current era ofglobalization and privatization because the localauthorities are becoming a facilitator rather than provider and citizens are becoming customerss rather thanbeneficiaries.Citizens should be involved at all the stages of plan preparation starting from visioning, conceptualizing,actual plan preparation and resource management and implementation. This minimises confrontation andmiscommunications while preparing and implementing projects andpolicies and also gives sense ofownership to the citizen.3.2.3 ConsultationProcessesExperience points to certain characteristics which foster a successful public participation or consultationnprocess, andwhich helpto ensure outcomes that reflect the interests and concerns of potentially affectedpeople and parties.These include the following:• The process seeks out and facilitates theinvolvement of those potentially affected (identification ofkey stakeholders)• The process provides participants with the information they need to participate in a meaningful way• The process makes all reasonable efforts to identify the interests of, and meet the process needs of,participants• It effectively identifies the marginalizedsections ofthe societyand ensures that the benefits havethe desired trickling down effect.• Participants areprovided opportunities for meaningful input and public issues/concerns areconsidered in developing theproject design and making project approval decisionsRegional Capacity Building Hub (RCBH)MissionDirectorate, JnNURM, MoUD, GoIModule Prepared by:CEPT University, Ahmedabad

Module 7: I nstitutionalStrengthenn ingPage | 18• The process incorporates feedback andcan evolve in response to the input and needs (access,format, etc.) of participants• The public participation process communicates to participants how their input affected outcomes(i.e.,project design and review/approval decisions)3.2.4 Developmentsectors for consultationKey development sector should be identified for thestakeholders. They can be:• Urban Spatial Growth• Urban Poverty• Urban Environment• Water Supply• Sewerage and Sanitation• Storm Water Drainage• SolidWaste Management• Roads, Traffic and Transport• Municipal Finance• Institutional Development• Urban Governanceconsultationn with categorised sector specificcReform Elements• Number and composition of different tiers and specific activities to be entrusted to them at eachlevel• Timeline for enactment of Community Participation Law or Amendment of the existing MunicipalLaws• Timeline for notification of the rules pertaining to the Community Participation Law, or amendmentin legislation• Steps taken by Municipality to create opportunities for community participationIssues• Several states already passed the legislations. But the problem is of implementation. (Evenotherwise, moststates havecrossed the timelines for passage of legislation.) Therefore, focus maybe on implementation issues.• Should the pooling booth be taken as the basis forconstituting Area Sabha as given in the ModelCommunity Participation Lawor any alternatives be considered?• Howto ensure effective participation of the poor at the Ward and Area level?• What should be the status of wards committees constituted andworking as part of 74th ConstitutionnAmendment Act(in cities with moiré than three lakhpopulation)?• What functions and financesshould be devolved to the committees at different levels?• Howto make participatory budgeting process practical and effective?• What strategy and capacity support is required for effective implementationn of CPL?Regional Capacity Building Hub (RCBH)MissionDirectorate, JnNURM, MoUD, GoIModule Prepared by:CEPT University, Ahmedabad

Module 7: I nstitutionalStrengthenn ingPage | 193.3 Public Disclosure Law3.3.1 Right to Information Act, 2005Public disclosure has become a mandatory activity under TheRight To Information Act, 2005, which is an act to provide forsetting out the practical regime of right to information for citizensto secure access to informationunder the control of publicauthorities, in order to promote transparency and accountabilityin the working of every public authority. This actis extends to thewhole of India except the State of Jammu and Kashmir."Information" accordingto this actmeans any material in anyform, including records, documents, memos, e‐mails, opinions,advices, press releases, circulars, orders, logbooks, contracts,reports, papers, samples, models,data material held in anyelectronic form and information relating to any private bodywhich can be accessed by a public authority under any other lawfor the time being in force.The information accessible under this Act, which is held by or under the controlof any public authorityincludes theright to (i) inspection of work, documents, records; (ii) taking notes, extracts or certified copiesof documents or records; (iii) takingcertified samples of material; (iv) obtaining information inthe form ofdiskettes, floppies, tapes, video cassettes or in any other electronic mode or through printoutswhere suchinformation is stored in a computer or in any other deviceAs per the act all information shalll be disseminated widely and in such form andmanner which is easilyaccessible tothe public.All materials shall be disseminatedtaking into consideration the cost effectivenesss,local language and the most effective methodof communication in that local area and the informationnshould be easily accessible, to the extent possible in electronic formatwith the Public Information Officeravailable free or at such cost of the medium or the print costprice as may be prescribed.As a responsible agency, urban local bodies need to initiate actionsat the local level to keep peopleeinformed about the project with all available information. The concerned local body, who will be in intimaterelation withthe local people, needto be transparent about the proposed projectand its activities. Everylocal body may designate a PIO, who will beheld responsible for any information, which need to beproactively disseminated. For example he/she need to take necessarysteps to disseminate the followinginformation by displaying in notice boards at project sites,brochures or any other means with one copy,strictly in local languages.• Siting Details along with sitemap• Project objectives, activities,outputs & benefits• Project Cost, Funding etc.• Likely Impacts and Entitlements• Contact Person and Addresss (PIO)Regional Capacity Building Hub (RCBH)MissionDirectorate, JnNURM, MoUD, GoIModule Prepared by:CEPT University, Ahmedabad

Module 7: I nstitutionalStrengthenn ingPage | 20•Reform Elements• Establishment of the Public Disclosure Law as defined in the model law– Outlining the financial statements including key financial indicators for public review,– Frequency of financial statements• Regular disclosure of servicee level informationIssues• Though most states seem to have passed legislation and the problem is implementation. Severalcities do discloseas part of RTI Law. But under PD Law more need to be disclosed and this need to befocused.• Is there any need for a separate legislation or onlyfor amending existing legislation incorporatingthe necessary provisions?• Communicationstrategy to be adoptedd (on the lines of RTI Act) to disseminate the PDlaw to civilsociety and governance institutions?• What capacity building measures need to be initiated?Obligations• Maintain all its records dulycatalogued and indexedd in a manner and the form which facilitates therightto information under this Act• Ensure that all records thatt are appropriate to be computerized are withina reasonable time andsubject to availability of resources.• The records should be developed such that it may bedisseminated timely• IT may be used to modernize record keepimg such that information and records may beaccessed atthe touch of a button.• The Staff has to be exposed to suitable training tools and techniques such that they maybe involvedin generating and maintain record, operations and dissemination.1. What is the ambitof disclosure?All financial and operational information pertaining to themunicipal functioning will be subject to publicdisclosure. This includesthe particulars of the municipality– details of committees, boards, councils, anyother body instituted through resolution and theexecutive set up, with contact details of the officials.The Model Law lays particular stresss on the disclosure of:‣ Financial statementss – balance sheets, cash flow, etc. – that are statutorily audited‣ Service levels of municipal services‣ Fiscal Plans – proposed expenditure, details of subsidy programmes, details of municipalfunds and annual budget allocated ward‐wise‣ Master Plan‣ Operational information – particulars of works, etc.2. What is the periodicity of disclosure?Quarterly disclosures of audited financial statements are required to be made within 2 months at the end ofeach quarter. Annual disclosure of audited financial statements is required to be made within 3 months atthe end of the financial year. Detailsof municipal funds and annual ward‐wise budget within 3 months at theend of each quarter.Regional Capacity Building Hub (RCBH)MissionDirectorate, JnNURM, MoUD, GoIModule Prepared by:CEPT University, Ahmedabad

Module 7: I nstitutionalStrengthenn ingPage | 21Rest of the information should be made available throughout the year with periodic updates toensure thatvalidity of the information.3. What is the manner of disclosure?Through the following media:‣ Newspapers‣ Internett‣ Notice boards of municipal offices.4. How will the ULB/ /parastatal measure its progress with respect toservice delivery? How will thecitizencomprehend the information disclosed?In order to be able to measure the progress and to comprehend thequality of service provided by theULBs/parastatals, it is essential to identify appropriate benchmarks for the services. ULBs/parastatals will beable to measure themselves by setting periodic targets against these benchmarks and comparing the actualmeasurement against them.Such benchmarking will also aid the citizen in comprehending the qualityof service currently being provided.3.4 E-GovernanceReform Elements• Appointment of State Technology Advisor• Preparation of Municipal E‐Governancee Design Document (MEDD) on the basis of National DesignDocument as per NMMP (national mission mode programme)• Assessment of MEDD against National E‐Governancee Standards• Finalization of Municipal E‐Governance implementation action plan for the city• Undertaking Business Process Reengineering (BPR) prior to mitigation to e‐governance system• Appointment of Software Consultant / agency for development,deploymentand training• Exploring PPP option for different E‐governance services• Implementationn of integrated and comprehensive E‐governanceinitiativesIssues• Howto ensure system integration for better and quicker database development, service deliveryand monitoring and evaluation?• Howto ensure enterprise wide approachto e‐governance vis a vis departmental approach?• Howto managechange (toovercome resistance and lack of staff capacity) in the context of E–Governance?• What are the challenges and capacity support required toacceleratee implementation of e‐governance programme?Regional Capacity Building Hub (RCBH)MissionDirectorate, JnNURM, MoUD, GoIModule Prepared by:CEPT University, Ahmedabad

Module 7: I nstitutionalStrengthenn ingPage | 24• Howto remove the discretion from the assessing authorities?• Howto bring about coordination and integration between different departments of the local body tofacilitate automatic capturing of new constructions,change of ownership, etc.?• Howto ensure the revision of propertytax and guidance values as per thelaw regularly? Why thestategovernment should have the discretion to postpone revision?• What constraints confront the local bodies in the introductionof information technology includingGIS to streamline the processes?• What support is required to introduce property tax reforms in the states or cities?3.6 UserChargesReform Elements• State/ULB to formulate and adopt a policy on user charges focusing on proper targetingg of subsides,ensuring full realization of O&M cost by the end of the mission period• State to set up a body for recommendinga user charge structure• Establishment of proper accounting system for each services so as to determine the O&M costseparately• Defining user charge structure• Achieving volumetric based tariff through 100% metering• Reduction in Non‐Revenue Water and Un‐accountedfor Water through measures that include wateraudits and leakage detectionstudies• Conduct of a study to quantify and examine impact of subsidiess for each services and analysis to betabled in the Municipal council• Achieving full recovery of O& &M cost fromuser chargesIssues• Howto bring understandingand awareness among the political executives at the statelevel on theneedand urgency of levy of user chargesto make the cities financially viableand competitive?• Should the constitution of a regulatory body to urban services bemade mandatory?• Howto enable cities to calculate appropriate user charges for each service?• What are the good practices and process in introducing comprehensive metering programme, andensuring effective billing andcollection?• What support is required to reduce NRW?• Howto structureand target the subsidies to the poor and ensuree rationality?• Howto ensure periodic revision of user charges based on cost of operation and maintenance inputsand increasing managementcosts without reference to state government?• What are the challenges and capacitysupport required in achieving sustainable cost recoveryprogramme?3.7 Internal Earmarking of Funds for Service to Urban PoorReform ElementsBudgeting and Accounting Processes• Accounting and budgeting codes to enable identification of all income and expenditure as related topoor / non‐poor• Creation of separate Municipal Fund in the accounting system for ‘Services to the Poor’• Amendments tothe Municipal Accounting Rules for governing the FundRegional Capacity Building Hub (RCBH)MissionDirectorate, JnNURM, MoUD, GoIModule Prepared by:CEPT University, Ahmedabad

Module 7: I nstitutionalStrengthenn ingPage | 25Allocation and Expenditure on Delivery of Services for Poor• Targeted revenue expenditure on delivery of services to poor per annum, expressed as % of TotalRevenue Income• Targeted revenue expenditure on delivery of services to poor per annum, expressed as % of TotalOwnsource of Revenue Income• Targeted revenue expenditure on delivery of services to poor per annum, expressed as % of TotalCapital ExpenditureKerala• 2% of the plan funds are earmarked for ‘Urban Poor’ Projects in thebudget• More than 25% is earmarked for slum improvement programme, special component plan for thedevelopment of Scheduled Castes projects, etc.Tamilnadu‐ Government of Tamil Nadu issuedinstructionss to provide at least 25%of the own source ofrevenue tourban poor.Orissa – The Government made it mandatory to allocate atleast 25% of municipal budget for provision ofbasic services to the poor.Uttar Pradesh ‐ The Government issued instructions to theULBs to earmark a certain proportion ofmunicipal own resources for services to the poor.Puducherry ‐ The Government issued instructions for earmarking of funds in municipal budgetsforprovision of services tothe poor inJuly 2008.West Bengal ‐ The Government made it mandatory to allocate at least 25% of annual municipal budgetfrom own resources for provision of basic services to the poor living in slums.Andhra Pradesh ‐ 40%of infrastructure funds allocated forbasic services to poor.Madhya Pradesh ‐ The Government issuedinstructions to the ULBs to earmark at least 25% ofexpenditure from municipal own resources forservices to the poor.Issues• What percentage of municipal budget should be allocated for poverty alleviation? What should bethe criteria for allocation ofstipulated funds ‐ like BPL and slumpopulation, area covered by slums,nature of deficiency in provision of services etc?• What should be the priority areas of expenditure?• What should bethe role of community based organisationsin planning and implementation ofpoverty alleviation programs?• What are the key challenges in achieving the reform milestones and what capacity support isrequired?3.8 Provision of Basic Services to Urban PoorReform Elements: State Government and ULB to formulate and adopt a comprehensive policy on providingbasic services to all urban poor focusing on :• security of tenuree and improved housingat affordable prices, universal services such as education,healthh and social security.Regional Capacity Building Hub (RCBH)MissionDirectorate, JnNURM, MoUD, GoIModule Prepared by:CEPT University, Ahmedabad

Module 7: I nstitutionalStrengthenn ingPage | 26Beneficiary Identificationn and Targeting• Household survey,covering all poor settlements• Surveyto cover infrastructuredeficiency indicators and socio‐economic deficiency indicators• Creation of database, includingidentification of HHs for priority targeting of schemes• Ranking and prioritisation of clusters of urban poor settlements• Frequency of updation of databaseQuality of Services and Extent of Access to Services• Improving access and quality of services tothe urban poorKudumbashreeA multi‐pronged bottom up approach to poverty reduction wasinitiated in Kerala throughKudumbasree. It is a community based, women oriented, participatoryand convergent approach forpoverty eradication. It’s philosophy is convergent community action and nter‐linkageswithgovernment departments and agencies like education, health, social welfare, municipaladministration and rural development. It’s Mission is “To eradicate absolute poverty in tenyearsthrough concerted community action under the leadership of LocalGovernments, by facilitatingorganisation of poor for combiningself help with demandd led convergence of available services andresources to tackle themultiple dimensions andmanifestation of poverty holistically”.Issues• Is there adequate database in ULBs and what are thechallenges in developing the same?• What should be the periodicity for data updation?• Howto prioritiseinvestments for the poor?• Howto achieve universal access to water and sanitation servicess for the poor?• Howto make cities free fromopen defecation?• What strategies should be adopted to provide security of tenure?• Howand in which areas private sector can participate in improving the housing supply for the poor?• Howto achieve convergence of all social sector services like health, education and welfare with thecity development plans?• Howto set the service delivery standards and measure the same?• What are the key challengesin complying with JNNURM requirements and what capacity support isrequired ?3.9 EncouragingPublic Private PartnershipReform ElementsState Level Regulatory and Policy Initiatives for encouraging and deepening PPP in Urban ServicesIssues• What policy andlegal changes are required at the State level to encourage PPP?• What are the experiences ofcities in implementing PPP projects? Challengesand payoffs• What capacity support is required for developing PPP projects?Regional Capacity Building Hub (RCBH)MissionDirectorate, JnNURM, MoUD, GoIModule Prepared by:CEPT University, Ahmedabad

Module 7: I nstitutionalStrengthenn ingPage | 27The State Governmentof West Bengal has been endeavouring to enlist private sector participation inurban infrastructure developmentwithin the ambit of the PPP Policy notified in August 2003.KMDA is the nodal agency for developing urban infrastructure in the Kolkata Metropolitan Area (KMA),which is the largest economic centre in the State. The efforts of KMDA on PPP initiatives have beennoteworthy. So far, KMDA has taken up 16 projects under different formats of PPP. Out of thesesixteen, 4 projects have been taken up under the JV route,10 under Build, Operate & Transferr (BOT) orBuild, Own& Operatee (BOO) andrelated formats. Another 3 projects under PP PP are to befinalizedshortly.It should be worth mentioning that in case ofeach of theprojects, KMDA has observed a transparentand competitive process for selection of the private developer/partner. For independent evaluation ofbids, assistance of external experts in the relevant fields has beentaken. Each and every projectincluding the evaluation process has been reviewed by the Committee of Secretaries chairedby ChiefSecretary, Govt. of West Bengal, before obtaining the final approval of the Hon’ble Chief Minister.4 INSTITUTIONAL STRUCTURES OF4.1 Evolution of MunicipalitiesULBS4.1.1 Historical evolution fromthe British era• Local government institutions have always existedin India in one form or another since ancienttimes.• The present formof urban local government owes its genesis to the British rule.• Theinitiation began with Samuel Laing, member of the Viceroy's Council, in the Budget Speech(1861‐ 62) proposing that local services should be based on locall resources.• LordMayo's Resolution of 1870 introduced the concept of elected representatives in themunicipalities.• LordRipon is considered the founding father of urban local government as he implanted theconcept of municipal authorities as unitsof self‐government. HisResolution of 18 May 1882 on localself governmentdealt with the constitution of local bodies, their functions, finances andpowers andlaid the foundation of local self‐government in modern India.• The first municipal body called a Municipal Corporation was set up in the former Presidency town ofMadras in 16888 and was followed by the establishment of similar corporations in Bombay andCalcutta in 1762.• LordMayo's Resolution of 1870 encouraged theintroduction of an elected President in themunicipalities.However in their present form and structure, the municipal bodies owe theirexistence to Lord Ripon's Resolution on local self‐government, adopted on 18 May 1882.• Since then the structure of municipal bodies has remained by and large the same eventhough thenumber of urbanareas has increased and their problems have become moreand more complex.Regional Capacity Building Hub (RCBH)MissionDirectorate, JnNURM, MoUD, GoIModule Prepared by:CEPT University, Ahmedabad

Module 7: I nstitutionalStrengthenn ingPage | 28• Urban local government (Prior to the passage of the 74th Constitutional Amendment Act ) wasdefined generally by the Municipal Corporations, Municipal Councils, Town Area Committees andNotified Area committees4.1.2 Statutory provisions forcreation of the Municipal UnitsStatutory provision for creating a municipal unit is available in two forms.• Either the statute itself mayestablish a municipal authority, likethe Bombay Municipal CorporationAct (1888), the City of Nagpur Corporation Act (1948) and the Delhi Municipal Corporation Act(1957).• Or it may empower the State Government concerned tocreate a Municipal Corporation(Municipality,Municipal Authority, Municipal Council or Municipal Board) such as the BombayProvincial Municipal Corporations Act (1949) and theGujarat MunicipalitiesAct (1964).• The extent of the municipality's power as well as the extent of government control over aMunicipality/Municipal Council dependson the statute enacted for its creation.• Presently, the statutes confer wider controlling and supervisory powers on the state government.Thisis due to two reasons: firstly, the Constitution does not demarcate the power and the duties ofthe municipal authorities and secondly in the absence of any clear‐cut demarcation, it is obvious thatstategovernments control municipal authorities4.2 Constitutional Provision for Urban Local BodiesThe Constitution (74th Amendment)Act, 1992• Total urban population of the country is28 crore contributing 28 per cent population ofthe country(2001 census).• Urban population has increased from 25.8 million in 1901 to 62.4million in 1951 and to 285.4 millionin 2001,therebyshowing more than ten fold increasee in total urban population.• Inadequate constitutional provision for local self government in urban areas.• Unstable democracy in municipal governance.• Public opinion crystallised infavour of constitutionalguarantee for the provision of :o regular conduct of electiono timely election in case of supersessiono adequate representationn of SC, ST and womeno firm footingthe relationship between the state government & the urban local bodies withrespect to:a. functions and taxation powersb. arrangement of revenue sharingThe 73rd and 74th Constitution Amendment Acts are sister legislations passed by the Parliament in 1992.The 73rd Constitution Amendment Act providedd directions for the creation of Panchayats in the rural areasand the 74th Constitution Amendment Act provided for the creation of municipalities in urban areas. Thetwo legislations laid a broad framework for thesetting up of Panchayats and Municipalities by the states.The legislations also stipulated a time limit within which the state governments were to enactconforminglegislations to enable setting up of Panchayats and Municipalities, that isby the 1st of July 1994.Regional Capacity Building Hub (RCBH)MissionDirectorate, JnNURM, MoUD, GoIModule Prepared by:CEPT University, Ahmedabad

Module 7: I nstitutionalStrengthenn ingPage | 29Prior to the enactment of these twolegislations, the functioning of thelocal bodies was totally dependenton the whims and fancies of the state governments. The supersession ofthe local bodies was a very commonoccurrence. Further, thevital arms necessary for the efficient functioning of the local bodiessuch as theDistrict Planning Committee, MetropolitanPlanning Committee,Wards Committee, State ElectionCommissionetc., are either missing or not in a functional state. Although the settingup of thesee institutionshas been made mandatory by the Constitution, in most states they are still not in place. The reasons for theirabsence or ineffectivityhave been discussed in this paper.The legislation apart from laying broad criteria for constitution, composition of municipalitiess,elections/removal of Mayor or Chairpersons,qualification/disqualification of membership, setting up ofState Election Commission etc., left it to the state governments to prescribe the actual norms. This was donewhile keeping in mind the federal nature of our political system and also since a minority government wastabling the Bill in the Parliament andwas dependent on other regional parties for its passage.4.3 Constitutionof Municipalities,Elections& State ElectionCommissions4.3.1 Constitution of MunicipalitiesArticle 243Qof the Constitution states that a Municipal Corporation shall be constituted for a larger urbanarea, a Municipal Council for a smaller urban and a Nagar Panchayat for an area, which is in the process oftransition from rural tourban. TheConstitution does not define what exactly would constitute larger orsmaller urban area or anarea of transition fromrural to urban. It has been left to the state governments tofix their owncriteria. The Article also states thatt apart from population, other parameters such as density ofpopulation, percentage of population in non‐agricultural employment, annual revenue generation etc., maybe taken into account bythe states. But apart from total population, very few statess have taken into accountthe other criteria. Only Andhra Pradesh, Himachal Pradesh,Tamil Naduand Karnataka have prescribed thecriterion of annual revenue generation, most other states do not even specify any such criterion. The othercriteria suchas density of population and percentage of population innon‐agricultural employment havebeen totally ignored by all the states.It is, therefore, suggested in the paper that Article 243Q of the Constitution may beamended and at least aminimum population as a base maybe prescribed. For a Municipal Corporation a minimum population of 5lakh, a Municipal Council for a townwith at least 50,000 people and a Nagar Panchayat for a town with atleast 20,0000 people. The proviso toArticle 243Q stating that a Municipality may not be constituted in anindustrial township ‘under certain circumstances’ (the reason for which has not been stated) should bereconsideredd since this is against thespirit of decentralisation.CompositionArticle 243Rof the Constitution states that all the seats in a Municipalityshall be filled by persons chosen bydirect election from theterritorial constituencies or wards(similar to constituencies of the Lok Sabha orVidhan Sabha). This means thatt a Municipal council would comprise mainly of directly electedrepresentatives or that it is an elected body. It also states that certain members may be nominated by theRegional Capacity Building Hub (RCBH)MissionDirectorate, JnNURM, MoUD, GoIModule Prepared by:CEPT University, Ahmedabad

Module 7: I nstitutionalStrengthenn ingPage | 30state government (local MPs/MLAs and persons having special knowledge or experienceadministration) with or without the right to votein the proceedings of the Municipality.in municipalThe total number of members in a Municipality varies from state to state. Most states have tried todetermine the number of members by keeping in mind the total population of the Municipality.The range inUttar Pradesh is from 60 to 110 members, inMadhya Pradesh it is 40 to 70, it is 30 to 1000members in Karnataka, while it is 60 to 70 in Rajasthan. Though the states have succeeded inmaintainingparity population per ward within a Municipality, they have failed in maintaining a similar parity amongst theMunicipal Corporationswithin the state. In Maharashtra, for example,the averagee populationper ward is45,000 in Mumbai, 22,000 in Nagpur and 14,000 in Pune. Similarly, in West Bengal, it is 31,000 in Kolkata,19,000 in Howrah and 8,000 in Siliguri. Such a phenomenon has also been observed in Municipal Councilsand Nagar Panchayats within a state. It is necessary to have parity in this aspect because an importantcomponent of decentralised governance is that theree should beproximitybetween the electedrepresentative and the local people,but when one elected member is representing such a largepopulation,the whole purpose of decentralisedgovernance may be defeated.However, inthe 73rd Constitution Amendment Act relating to the Panchayats, Article 243C specifies theneed for parity amongst Panchayats within a state. A similar clause could be considered in respect toMunicipalities also.As far as nominated members are concerned, Andhra Pradesh is the only state which has a provision tonominate one person belonging tothe minority community. Regarding representation of persons havingspecial knowledge or experience in municipal administration, some states have made provisions, althoughhthe numbervaries fromstate to state. In Haryana, the provision was removed in 2002 dueto politicalcompulsions. It is important to note here that this provision has beena matter of debate since the verydefinition of having special knowledge or experience is ambiguous and the nominations arbitrary. It isproposed that the provision may be dropped.Election andRemoval ofMayor / ChairpersonsThe mode of election ofMayors / Chairpersonss was left to the discretion of the State Governments by theConstitutionn ‐‐ Mayors in the case of Municipal Corporations and Chairpersons or Presidents inthe case ofMunicipal Council or Nagar Panchayat. In Rajasthan, Himachal Pradesh, Haryana, Karnataka, Kerala, WestBengal, Maharashtra and Gujarat, the Mayors/Chairpersons are elected fromamongst the electedCouncillors i.e., indirectly elected. In Andhra Pradesh, Uttar Pradesh,Madhya Pradesh and Tamil Nadu,Mayors/Chairpersons are elected directly by thepeople. Their term of office also varies from state to state.Uttar Pradesh, West Bengal, Tamil Nadu, Rajasthan, Andhra Pradesh, Kerala and Madhya Pradesh haveprovided fora five‐year term, while Assam, Delhi, Himachal Pradesh, Orissa and Karnataka have provided fora one‐year term. Maharashtra andGujarat have provided for a twoand a half year term. In case ofMaharashtra, after the term of office of the Mayor was increased fromone year to two and a half years,some political parties wanted that the post of Mayor be rotated after every year, sothat other members ofthe party could be givena chance. Ithas been felt that a termof one year is insufficient. The termof office ofthe Mayorsand Chairpersons in Maharashtra and Gujarat was increased primarily to provide somecontinuity inmunicipal administration. But it is also being seen as an opportunity to give a chance to moremembers thereby satisfying a larger group in theruling party.Regional Capacity Building Hub (RCBH)MissionDirectorate, JnNURM, MoUD, GoIModule Prepared by:CEPT University, Ahmedabad

Module 7: I nstitutionalStrengthenn ingPage | 31Removal of Mayor/ChairpersonsThe provisions in State laws for removing a Mayor/Chairperson through a no‐ confidence motion is differentall over the country andone can confidently say that the procedure ismore complex and stringent whencompared toa no‐confidence motion in the Lok Sabha or theVidhan Sabha.Main Features of 74th CAA• The Constitutionn (73rd Amendment) Bill was introduced in the Parliament in 1991• Referred to the Joint Parliamentary Committee.• Passed by the Lok Sabha on 22nd December 1992 and by the Rajya Sabha on23rd December 1992.• Received assentof the President on 20thApril 1993.• Published in Government Gazette as theConstitution (Seventy Forth Amendment) Act 1992.• Came into force on 1st June 1993.• PartIX A was introduced dealing with the issues relating to ULBsSTATUS OFIMPLEMENTATION OF PROVISIONS OF 74 THCAA IN STATES:S.NOState /UT1 AndhraPradesh2 ArunachalPradesh3 Assam4 Bihar5 Chattisgarh6 Delhi7 Goa8 Gujarat9 Haryana10 HimachalPradesh11 Jharkhand12 Karnataka13 Keralaa14 MadhyaPradesh15 Maharashtra16 Manipur17 Meghalaya18 Mizoram19 NagalandConstitutionof ULBsYYYYYYYYYYYYYYYReservationof SeatsYYYYYYYYYYYYYYYRegularConductofElectionsYYYYYYYYYYYYYYYConstitutionof WardsCommitteesYYYYYYYConstitutionnof DPCsYYYYYYYYConstitutionof MPCsConstitution of SFCsYYYYYYYYYYYYYYYYRegional Capacity Building Hub (RCBH)MissionDirectorate, JnNURM, MoUD, GoIModule Prepared by:CEPT University, Ahmedabad

Module 7: I nstitutionalStrengthenn ingPage | 32S.NO20 OrissaState /UT21 Punjab22 Rajasthan23 Sikkim24 Tamil Nadu25 Tripura26 Uttarakhand27 Uttar Pradesh28 West BengalConstitutionof ULBsYYYYYYYYReservationof SeatsSource: NIUAStudy on Impact of 74 thCAA accessed at www.niua.orgYYYYYYYYRegularConductofElectionsYYYYYYYYConstitutionof WardsCommitteesYYConstitutionnof DPCsYYYYConstitutionof MPCsYConstitution of SFCsYYYYYYYYY4.4 Twelfth Schedule Article 243W4.4.1 Functions incorporatedto the ULBs1. Urban Planning including town planning.2. Regulation ofland – use and construction of buildings.3. Planning for economic and social development.4. Roads and bridges.5. Water supplyfor domestic, industrial and commercial purposes.6. Public health, sanitation conservancyand solid waste management.7. Fire services.8. Urban forestry, protection of the environment and promotionof ecological aspects.9. Safeguardingg the interests of weakersections of society, including the handicapped and mentallyretarded.10. Slum improvement and upgradation.11. Urban poverty alleviation12. Provision of urban amenities and facilities such asparks, gardens, playgrounds.13. Promotion ofcultural, educational and aesthetic aspects.14. Burials and burial grounds: cremations and cremation grounds and electric crematoriums.15. Cattle pounds: prevention of cruelty to animals.16. Vital statistics including registration of births and deaths.17. Pubblic amenities including street lighting, parking lots, bus stops and public conveniences.18. Regulation ofslaughter houses and tanneries4.5 Some Major Provisions Introduced by the 74th CA ActFinance Commission• Article 243 I hasasked the state government to constitute a Finance Commission for reviewing thefinancial position of the ULBs for makingrecommendations on :• Distribution of taxes, etc. leviable by thestate government between the state and the ULBs.• Allocation of such taxes between the ULBs at all levels in the state.Regional Capacity Building Hub (RCBH)MissionDirectorate, JnNURM, MoUD, GoIModule Prepared by:CEPT University, Ahmedabad

Module 7: I nstitutionalStrengthenn ingPage | 333• Determine the taxes, duties etc. to be appropriatedby the ULBs.• Grants in aid to the ULBs• Measures needed to improve the financial position of the ULBs.District Planning Committee• A committee is to be formed in every state at the district level to consolidate the plans prepared bythe panchayats and ULBs of the district and to prepare a draft developmentplan for thedistrict as awhole.• Composition of DPC and themanner in which the seats shall befilled to be determined by the statelegislature.• Not less than four – fifths ofthe total number of members shall be elected from amongst the electedmember of the panchayat at the district level and of the ULBsin the district in proportion to theration between the population of the rural areas andof the urban areas in the districtPreparationof Draft Development PlanThe District Planning Committee in preparing theDraft Development Plan shall have regard to:• Matter of common interest betweenplanningthe Panchayats and the Municipalities including spatial• Sharing of waterand other physical and natural resources• Integrated development of infrastructure and environment conservation• Extent and type of available resources, whether financial or otherwise.Metropolitan Planning Committee• In every metropolitan area ( 10 lakh or more population) a Metropolitan Planning Committee shall beconstituted for preparing draft development plan for the metropolitan area as a whole. The MPC willtakeinto account the following:• Planprepared by the Municipalities and the Panchayats in the• metropolitan area• Matter of common interest between theMunicipalities and Panchayats including coordinated spatialplans of the areaa• Sharing of waterand other physical and natural resources• Integrated development of infrastructure and environmental conservation• Overall objectives and priorities set by the Government of India and the State Government• Extent and nature of investments likelyto be made in the metropolitanarea by agencies of theGovernment• Other available resources, financial and otherwise4.6 Issues of Implementing 74th CAA• Revenue sharingpattern with other government departments/agencies often contradictory• Dependence on state government/ parastatals for staffing sanction, asset creation, service delivery,programme implementationn etc.• Inadequate in‐house technical and financial resourcee base• Lackof convergence with State/District level planning and fund releaseRegional Capacity Building Hub (RCBH)MissionDirectorate, JnNURM, MoUD, GoIModule Prepared by:CEPT University, Ahmedabad

Module 7: I nstitutionalStrengthenn ingPage | 344.6.1 Role Overlapping & Conflict with multiple institutionssRoles/functional jurisdictions of the municipalities often overlaps with other institutions becausee of;• Undefined scope of work of parastatals/line departmentsoften lead to their roleoverlappingwith ULBs• Lack of capacity of ULBs to cater to the need of the citizen (example PHEand KMW& &SA for watersupply in West Bengal)• Lack of capacity of ULBsto invest increation of infrastructure and their O&M (example KMDAfor construction & O&Mof STPs in West BengalSome examples;1. Conflict with Development Authorities in land use control and development2. Conflict with Development Authorities in planning and implementation of schemes where DAs havebeen identified as nodal agency to implement any large trans‐municipal programme like JnNURM3. Conflict with PHE and Service agency (suchas KMDA/KMW&SA) who provideswater supply/Sewerageein many ULBs but ULBs have been asked to levy user charge.4. Conflict with PWD/ /DA over advertisementt tax rights on the stategovernment assets (such as roads)passing through ULBs5. Conflict with defense cantonment boards for using their territory to lay/fetchwater supply/electricityytransmission lines4.7 Constitutionof Municipalities& Typology of Municipal Administration• Urban local government is not hierarchical. However, the Municipal Corporation, as an institution,enjoys a greaterr measure ofautonomy than other forms of local government.• It enjoys the power of dealing directly with the state government whereasthe municipalities haveno direct accesss to the stategovernment and are answerable tothe Districtt Collector and DivisionalCommissioner.• Municipalities and Corporations have deliberative and executivee wings.• ULBs have two wings:1. Deliberative Wing –a) Mayor/Chairperson/Presidentb) Municipal Council or Municipal Boardc) Standing Committees2. Executive Wing –a) Municipal Commissionerb) Deputy/Assistant Municipal Commissionerc) Municipal Engineerd) Subordinate Administrative & Technical Staff• In general, deliberative wings of Municipal Corporations comprise the Corporation Council, theStanding Committee and the Mayor,whereas the executive wings comprise the MunicipalCommissioner,the Deputy/AssistantMunicipal Commissioner, the Municipal Engineer andsubordinate administrative staff.Regional Capacity Building Hub (RCBH)MissionDirectorate, JnNURM, MoUD, GoIModule Prepared by:CEPT University, Ahmedabad

Module 7: I nstitutionalStrengthenn ingPage | 35Predomonantly, two types are municipal administrative systems are found in India;1. Commissioner System• Commissioner isthe most important person.• Mayor is chosenfor one year term, which is renewable.• Mayor lacks executive authority.• Actsas a figurehead.• Councillors workunder standing committees.2. Mayor – in ‐ Council System• Cabinet government replicating the formula operating at state and national level.• Composed of Mayor and a number of elected members in the cabinet each with separate portfolio.• Commissioner acts a the Principal Executive Officer subject tothe supervision and control of theMayor.• In case of large municipalities, Chairman– in – Council system works instead of MIC system.• In case of small municipalities, there is no CIC system, some standing committees are there.4.7.1 ULBsystems and proceduresElections in Municipalities• The municipalityhas a fixed term of five years from the date of first meeting.• Elections to constitute a municipality are requiredto be completed before the expiration of theduration of the municipality.• If the municipality is dissolved beforee the expiryof five years, elections for constituting newmunicipality arerequired to be completed withina period of six months from thedate of itsdissolution.• The superintendence, direction and control of thepreparationof the electoral rolls for, and theconduct of, all elections to the panchayats and municipalities shall be vested in the State ElectionCommissions.Compositionof Municipalities• Decided by the Legislature of a state.• Division of municipal area into territorial constituencies known as wards.• Persons to be chosen by direct election• Representationof Chairpersons of Committees, if any, at ward or other levels in the ULBs.• Representationof persons having special knowledge or experience of municipal administrationn(without voting rights).• Election of Chairperson to bespecified inthe state law.• Constitution of Ward Committees in all ULBs with a population of three lakh or more.Regional Capacity Building Hub (RCBH)MissionDirectorate, JnNURM, MoUD, GoIModule Prepared by:CEPT University, Ahmedabad

Module 7: I nstitutionalStrengthenn ingPage | 36Reservationof Seats• For women – not less than one – third ofthe seats• For SC/ST – according to theproportion of SC/ST population to the total population of the municipalarea. Not less than one – third of the seats reserved for SC/ST shall be reserved for womenbelonging to thecategory.• State legislaturee may reservee seat for backward classs citizens. This is an optional provisionPowers and Functions• Devolution of powers and responsibilities upon the ULBs to enable them to function as institution oflocal self government.• Devolution in respect to :1. preparation of plans for economic developmentand social justice.2. implementation of schemes.• List of functions that may beentrusted to the ULBs has been incorporated asthe TwelfthSchedule ofthe Constitution.Municipal FinanceState Legislature may, bylaw:• Authorise ULB tolevy and collect taxes, duties, tolls, fees.• Assigning an ULBto get share of the taxes, duties etc. collected by the state government;• Grant – in – aid to be given by the state government• Constitution of fund for crediting and withdrawal of money by the ULB.Audit of Accounts• Maintenance ofaccounts and other audit shall be done in accordance with the provision of statelaw.• State Legislature is free tomake provisions depending uponthe local needs and institutionalframework available.FUNCTIONSDeliberativee Wing• Providing Policy and Direction to the organization• Adoption of budget• Demanding accountability of the Executive wing• Monitoring and evaluation of municipal work• Representing the interests of the electorsExecutive Wing• Discharging (i) statutory duties and (ii) implementation of Municipal Tasks under the overall policydirection of Executive Authority (EA).Regional Capacity Building Hub (RCBH)MissionDirectorate, JnNURM, MoUD, GoIModule Prepared by:CEPT University, Ahmedabad

Module 7: I nstitutionalStrengthenn ingPage | 37• Action‐orientedplanning• Financing and staffing (Administrative approval, financial sanction, Staffing etc).• Monitoring and evaluation• Acting as a bridge between MC and the Implementing arm.• Tasks related to(i) revenue generation, (ii) regulatory functions and (iii)delivery of services atvarious levels.• Reporting to EA through thenormal organizational hierarchy.• Providing support to MC andSubject Committee as per approvedprocedure.Functions ofULBsProviding essential urban services:• Water Supply: Domestic, Industrial, Commercial• Sewerage/ Sanitary toilets, public conveniences• Drainage• Solidwaste management• Roads: City streets, footpaths, pedestrian pathways, transportation terminals (passengers andgoods), bridges/ /culverts, over‐bridges, subways.• Transportation system accessories: traffic lights/signs, bus‐stops, parking areas, street lighting.Regulatory functions:• Control of building operations including removal of unauthorized construction and demolition ofdangerous buildings.• Regulation of bazars and slaughter houses.• Protection of environment ncluding planting and caring of treeson roadsides and elsewhere.• Issue of licence for carrying on trade andbusiness.• These functionsare more or less common amongall municipal bodies. In Sikkim Act, they arereferred to as core functions. In some other State Acts, they are called Obligatory functions.Discretionary functions of municipalityTown planning and development, ncluding development ofcommercial and tourisminfrastructure.• Environmental protection, ncluding provisioning of parks and playgrounds• Public health and sanitation, including establishing out‐door clinics, hospitals, measures forcontrolling communicable diseases, public vaccination, promoting personal hygiene etc.• Education and culture, including provisioning of schools, libraries, entertainment in public places,organizing fairs, exhibitions, flower shows etc.• Public welfare: Public information centres, public welfare centres, swimming pool, public bathingfacilities, burial grounds/crematorium etc.Assigned functions of municipalityRegional Capacity Building Hub (RCBH)MissionDirectorate, JnNURM, MoUD, GoIModule Prepared by:CEPT University, Ahmedabad

Module 7: I nstitutionalStrengthenn ingPage | 38• The government may from time to time assign some of its functions to the municipality either asdelegated task or devolved function. (For example, execution of Urban PovertyAlleviationProgramme).Functions relating to revenue generation:• A local government has its own fiscal powers. It isthe duty of the municipal body to utilise thispower fully, so that it can generate enough revenuee from its own sources. A local government thatdepends too much on the state government cannot fully discharge its obligations to the citizens.4.7.2 ULBoperations and procedures• Settign up and strengthinignn proceduresfor transacting businesss withing theULBsThere should be a well regulated and maintained practice of transacting business within theULBs. This shall ensure traspernacey in the oprtations and also lead to better service deliveryand accounting on the part of the ULB.• Procedures for holding meetings of ULBsand its sub comiteesThere should be regular meetings within theULB, discussing the dayto day fiunctioning andthe various issues that the ULB has to take care of. Thisshall ensure greater efficiency in allthe levels of the local body. Healthy parliamentarypractices should be followed at alllinstances and the decorum should be maintained• Format and methodology for writing andmaintaining minutesThe meetings should be well documentedd for ready reference in future. The ULB maydevelopa format for recording the minutes.• Ensuring the importance of quorum4.8 Process of Core Municipal Services1. Water SupplyULB supplies water for domestic, industrial, commercial andpublic utility purposes.A. Types of Watera) fresh water or sweet waterb) underground waterB. Stagesa) Purificationb) DistributionApart from some large corporations,in most cases water is supplied by the state government – Public HealthEngineering Departmentt or Water Supply Board etc.2. Drainage and SanitationRegional Capacity Building Hub (RCBH)MissionDirectorate, JnNURM, MoUD, GoIModule Prepared by:CEPT University, Ahmedabad

Module 7: I nstitutionalStrengthenn ingPage | 39Role of ULB ‐ construction, maintenance and cleaning of sewers, drains and public toilets.Types of Arrangementa) off – sitearrangementb) on – sitearrangementa) Off – Site Arrangement• ULBs have sewerage network and underground drainage with sewage treatment plant.• Individual buildings are connected to thesewer sytem.• Generally the municipal corporations and large municipalities have this arrangement.• In most cases, part of the city area is covered by thisarrangementKolkataa – 55 to 60 % areaKurseong – 20 to 25% areab) On – Site Arrangement1. open drains2. toilets – septic tank latrines and pit latrinesULBs role is• to construct andclean the drains and sewer lines• To construct, clean and maintain the public toilets• To provide individual toilets to the poor• To clean the septic tank sluge by cesspool• To clean the waste water in sewage treatment plant3. Solid Waste Management‐ collection, transfer, recycling, resource recovery (composting, waste to energy etc.) anddisposal ofmunicipal solid waste.SWM includes• Minimizing waste• Maximizing environmentallysound waste reuse and recycling• Promoting environmentallysound wastetreatment and disposal• Extending the coverage of waste management servicesStages Involved in SWM1. Primary collection of SW from the household level2. Primary transportation tomunicipal waste bins and collectionpoints3. Secondary transportationn of garbage from municipal bins to disposal sitess4. Actual disposal of waste.Methods ofDisposal1. Sanitary land – fill2. Incineration3. Bio – gas generationRegional Capacity Building Hub (RCBH)MissionDirectorate, JnNURM, MoUD, GoIModule Prepared by:CEPT University, Ahmedabad

Module 7: I nstitutionalStrengthenn ingPage | 404. Composting5. Fuel pelletisation5 CAPACITY BUILDING NEED OF THE ULBSAND JNNURMThe Jawaharlal Nehru National Urban Renewal Mission (JnNURM) focuses on governance improvementthrough of implementation of reforms at stateand ULB levels. With nation’s economic growth is largelylinked with urban centers, the capacity of a nation to pursue its economic goals becomes contingent on itsability to govern its cities. Urban governance has, therefore, assumed increasing importance asa means toensure that economic growth is equitable, sustainable and improves theliving human conditions.5.1 Key Institutional DevelopmentIssues Faced by the ULBs• Planning & Ward/Booth level integrationn• Financial Management & Budgeting• Improved Accounting• Human power rationalization & delegation• E ‐ Governancee ‐ Management Information system, monitoring system, citizen‐centric serviceedelivery throughh e‐enabled systems• Effective Citizen Interface Mechanism; Standardization and Benchmarking inService Delivery, CitizenCharter etc.• Capacity building and training5.2 Planning• As per the 74th CAAA the planning functions should be entrusted to the ULBs• The ULB level plan to converge with trans‐municipal, district/metropolitan plan, state plan and NationalplanLevel of governanceCentral Govt.State Govt.District/MetropolitanULBStatutory institutionfor plan formulationPlanning CommissionState Planning BoardDPC/MPCFormulationMunicipality&approvalDPC/MPCbybyName of the plan5 Yr. PlanState Level PlanDistrictPlan/Metropolitan Dev.PlanDraft Development PlanAnnual PlanPeriodplanning5 Year5 Year5 Year5 year1 yearofFinancialorganizationCentralFinanceCommissionStateFinanceCommissionStateFinanceCommissionStateFinanceCommissionthrough ULB5.3 Background of ULB level Perspective Planning• 74thCAA recognizes each ULB as 3rd tier Government• ConstitutionallyEmpowers ULB for making plans on the following development issues: ‐o Urban planning, Land‐use Development & Control, Housing, Roads and bridges, Watersupply, Public health, sanitation,SWM, Urban forestry, environment, Etc.Regional Capacity Building Hub (RCBH)MissionDirectorate, JnNURM, MoUD, GoIModule Prepared by:CEPT University, Ahmedabad

Module 7: I nstitutionalStrengthenn ingPage | 41oPlanningfor economic and social development5.4 Introductionof Comprehensivee Development PlanUnlike the current planning process, i.e. ‘preparation of master plan’, which places a greater emphasis onthe spatial aspects andits regulation, the planning process outlinedfor City DevelopmentPlan (CDP)envisaged under JnNURM takes a more strategic view of thedevelopment of a city and aligns infrastructuredevelopment and service delivery tothe vision for development in a consultative and participatory manner.The processs is cyclical with an in‐built periodical review mechanism sothat it can respond to the evolvingaspirations and needs of the citizens keeping the constraints and opportunities in mind. A ComprehensiveeDevelopment Plan is:o An Overall Development Plano A Plan based all stakeholder’s viewso A Plan for each & every aspects of lifeo A Plan for overall improvementof lifeo A Plan for Financial Improvemento A Plan for our FutureGenerationn5.5 Process of CDPA City Development Plan is a comprehensive document outlining the vision and developmentstrategy forfuture development of the city, prepared in consultation with a wide range of stakeholders toidentify thethrust areasto be addressed on priority basiss in order toachieve the objectivesand the vision. It thusprovides theoverall framework within which projects are identified and put forward in a CityInvestmentPlan.5.5.1 CDP& Sectoral Master PlansWhile the Comprehensive Development Plan/Master Plansthat were prepared by all cities in the earliercontext were largely land‐use regulation and monitoring documents, the CDP envisaged under JNNURM haswider objectives that seek, inter‐aliaa (a) Guidedd growth of the City, (b) Citizen’s participation, (c) Reform ingovernance leading to a well‐managed society, and (d) Clear estimates of financial investments andsustainabilityFor any city, Master Plans lay down the spatial requirements forthe coming years, where a CityDevelopment Plan envisaged under JnNURMis a comprehensivedocument outlying thevision anddevelopment strategy for future developmentof the city, prepared with a wide range of stakeholders toidentify the thrust areasto be addressed to achieve the objectives and the vision.5.5.2 Important Features of CDP• Presents currentstage of city’s development – where are we now?• Projects aspirations of the city – what/where do we want to be?• Attempts a Resource Based Planning – iscity planning inclusive of all resources; social, economic,natural and cultural?• Identifies the thrust areas – what are thesectors weneed to address on a priority basis?Regional Capacity Building Hub (RCBH)MissionDirectorate, JnNURM, MoUD, GoIModule Prepared by:CEPT University, Ahmedabad

Module 7: I nstitutionalStrengthenn ingPage | 42• Setsgoals for different sectors –inter sectoral and intra sectoral ‐ what specific goals should betargeted?• Suggests alternative routes, strategies – what are the practical and implementable approaches toachieve the goals?• Identifies specific interventions and their resource requirements– what are the specific projects andinitiatives to be undertaken,and what will be the investment needs?• Adopts a transparent and consistent framework andprioritizes these interventions – collectivelywhat do we agree as the priorities?• Identifies a financial plan that can be operationalisedat the institutional level and then as anaggregate at thecity level – how do we balance the resource availability (social, economic, culturaland natural) with the requirements of the plan for the medium term? Can the internal resourcesfinance priority investments? Are there other options for leveraging finances?• Identifies the actions for developing institutional synergy, drawing on resources from private sectorand the civil society, and build the organizational capacity to meet the challenges of implementingthese plans – what are the resources weneed to puttogether tobe able to implement these plans?• Ensures that focused strategies and plans are evolved to addresss issues of urban poverty‐ how dowe ensure that the goals, strategies and plans promote inclusivegrowth, andprovide theenvironment to alleviate poverty?• Evolves through a process of participatory planning with involvement of all stakeholders – howdo we ensure that the CDP has collective ownershipand reflectsthe voice ofall sectionss of society?It may be noted that in the multi‐ULB metropolitan set up individual ULBlevel plans are to be incorporatedin the overarching metropolitan level CDP.Here it may be noted that in Kolkataa Metropolitan Area, the CDP is prepared in concurrence withthe 41ULBs falls under its jurisdiction.5.5.3 A brief overview of DDP as prepared underKUSP in the KMA ULBsMajor Components of a DDP• Infrastructure, Land Use & Environment Development• Social & Livelihood Development• Municipal Institutional StrengtheningInfrastructure, Land Useand Environment Plan may include;• LandUse Planning & Development Control Plan• Intra‐municipalInfrastructure Plan• Trans Municipal Linkage Plan• Environment Management Plan• SlumInfrastructure PlanSocial & Livelihood Plan• Livelihoods & Poverty Alleviation Plan• Local Economic Development Plan• Healthcare Service Delivery Improvement Plan• Primary Education Improvement Plan• Minority Development PlanRegional Capacity Building Hub (RCBH)MissionDirectorate, JnNURM, MoUD, GoIModule Prepared by:CEPT University, Ahmedabad

Module 7: I nstitutionalStrengthenn ingPage | 43• Planfor Socially Disadvantaged GroupsMunicipal Institutional Strengthening Plan• Organization Development (including training) Plan• Internal Processes & Systems Improvement Plan• Citizens Interface Plan• Financial PlanDDP - StakeholdersSome key stakeholders during DDP Preparation are:• Elected representatives• Technical staff and local experts• Ward Committees• CDS• Local Residents/ /Trade and Business Associations,• NGO• DPC• OthersCouncillors• Participate in all initiatives related to theDDP preparationprocess• Participate in the DDP approval process at the Municipality levelMunicipal Staff• Provide all data,support andassistance to the DDP Policy and technical team• Participate in all meetings related to DDP preparationsWard Committees & CDS• Playan instrumental role inthe DDP preparation process and assist the DTG in conducting groundlevel work.• Prepare proposals and submit to the Municipality for consideration and incorporation in the DDP.• Participate in all workshops and field activities to ensure that theplanning process is participatory.• Provide feedback to Municipality on draft DDP once it is made public .Local Residents/Trade & Business Associations• Participate in field activitiesand provide inputs to the technical workinggroups byconcerns on issues and suggesting possible solutionss• Provide feedback on the draft DDP document once it is made public for commentsvoicing theirDistrict Planning Committee (DPC)/ Metropolitan Planning Committee (MPC)• Approve the DDP GuidelinesRegional Capacity Building Hub (RCBH)MissionDirectorate, JnNURM, MoUD, GoIModule Prepared by:CEPT University, Ahmedabad

Module 7: I nstitutionalStrengthenn ingPage | 444• Provide guidance during thepreparationof DDPs• Approve DDPs prepared by the Municipalities6 FINANCIAL MANAGEMENTFinancial Management includes:• Optimization of Municipal Revenue Sources (Tax andNon‐Tax)• Prudent Budgeting• Costmanagement (reduction of establishment costs, energy audits, contracting out, PPP forinfrastructure and service delivery etc.)• Improved Creditworthiness (CRISIL rating for accessing funds from market etc.)6.1 Municipal RevenueTwo Sources• OwnSource Revenue (OSR) or Internal Revenue• Grants from State GovernmentI. Own Source Revenue• Taxes• User Charges• Feesand FinesII. Grants• Specific purposegrants• Untied grants• Schematic funds6.2 Tax• Tax on land and buildings (Property tax)• A tax on annual value of anyland or building in the municipal area.• The rate of tax on the annual value will be determined by rules, but would not exceed 0.25% ofannual value.• Annual value: Rental value, not capital value.• Property tax linked to consumer price index (CPI) forurban areas.• Central government Property exempt from propertytax• Surcharge on Property Tax• Not exceeding 10% of the rate of property tax onland, buildings, huts used for non‐residentialpurpose.• Subject to rules,property used for certain purpose like education, medical, culture or sports may beexempted from payment of surcharge, the limit of exemption being pegged at 50% of the surcharge.• An additional surcharge at a rate not exceeding 25% of the rate of property tax on such land orbuilding as is rented out.Regional Capacity Building Hub (RCBH)MissionDirectorate, JnNURM, MoUD, GoIModule Prepared by:CEPT University, Ahmedabad

Module 7: I nstitutionalStrengthenn ingPage | 45Valuation ofproperty for the purpose of assessment of property tax• For the purposeof levying property tax, the Government shall constitute a Municipal ValuationCommittee (MVC).• Considering the location of lands and buildings and structural characteristics of buildings, lands andbuildings of eachward will be classified into groups by the MVC.It will also specify the value per unitareaa of vacant land or per unit area of a covered space.• The lists showing such classification and unit value per unit area of lands and buildings will benotified by the municipality in each ward.• Objections, if any, received from the citizens will beconsidered by the MVCand disposed of by it asper procedure laid down in the rules.• Unitarea value of vacant land or that of covered space of a building will remain validfor 5 yearsafter which it will be revised.Property Tax Assessment• Annual value ofland and building = value per unit area of vacant land or value per unit area ofcovered space multiplied by actual area of vacant land or covered space as the case maybe.• Thiswill be determined by Chief Municipal Officer and communicated to thetax payer.• The tax payer will make a self assessment of tax payable on the basis of annual value of the propertyas determined and the rate of tax as fixed by the municipality.Other TaxesSurcharge on transfer of land and buildings• Municipality may levy a surcharge onsituated within the municipal area.the stampduty leviedon transfer of land and buildingsSurcharge on Entertainment Tax• A surcharge on any state government tax on entertainment or amusement may be levied by themunicipality, subject to the approval of state government.• The matters relating to the rates of such surcharge, manner ofcollection of surcharge,payment ofthe amount collected from surcharge to the municipality etc willl be prescribed in the rules.Tax on deficits of parking space:• The municipalitymay levy a tax on the deficits in the provision of parking spaces for vehicles in anynon‐residential buildings.Regional Capacity Building Hub (RCBH)MissionDirectorate, JnNURM, MoUD, GoIModule Prepared by:CEPT University, Ahmedabad

Module 7: I nstitutionalStrengthenn ingPage | 46Water Tax• Water tax may be levied on non‐residential buildingsas a % of property tax.Fire Tax• Fire tax may be levied on a non‐residential building as a % of property tax.• For levying the above taxesthe municipality will have to makeregulations, which is subject to theapproval of the State Government.Tax on hoardings and other display advertisements• For erecting hoardings andother display ads thatt is visible from public streets or public space,licence has to beobtained from the municipality.• A tax at such rates as are provided in theregulationsmay be realized from those who want to put upsuchadvertisements.6.3 Feesand TollsFees on vehicles• Municipality may realize fees at a rate not exceeding Rs 20 pervehicle for use of vehicles used forthe purpose of tourism and in connection with any congregationn within the municipal areas.Tolls• Withthe sanction of government, Tolls may be realized for use of public streets and bridges.• Tollsmay also belevied on heavy trucks and buses.6.4 UserChargesUser chargefor water supply• Municipality shall realize payments for supply of water to buildings to be used for domestic purposeor non‐domesticpurposes.Solid waste management• There is a provision for realizing charges for meetingthe expenses of solid waste management.USER CHARGES FOR WATER:In the current circumstance of dwindling budgetary support from theHigher levels of Governments, it isimperative on the part of the Cities to look out for generating their own resources from the municipalservices provided by them. The casehere is to collect 100% O/M Charges by levying user charges from watersupply, sanitation and solid waste collection by the Cities.In the subsequent steps, when theree is a stage is reached with the improved services and efficient collectionmechanism the Cities can always look out for creating a separate account to depreciate forthe Cost ofreplacementfor meeting the capital cost of the investment made inthe infrastructure created for theservices.Given, here are three cases of application of user charges by three premier water uitilities operating inChennai, Delhi and Bangalore to givean idea forthe practitioners to think about application of logic coupledwith analysis to arrive at a right formula for drawing the appropriate user charges to be collected from theusers for thevarious servicesRegional Capacity Building Hub (RCBH)MissionDirectorate, JnNURM, MoUD, GoIModule Prepared by:CEPT University, Ahmedabad

Module 7: I nstitutionalStrengthenn ingPage | 47• Chennai Metropolitan Water Supply & Sewerage Board (CMWSSB):The Board set up as a City level parastatal by an actof legislature for provision of water supply andsanitation services for the metropolitanareas of Chennai is oneof the bestrun agencies among allthe parastatals operating in this sphere across the country in terms ofoperational and otherparameters.METERED CONSUMERSS ‐ TARIFFCategoryQty of waterDomesticResidential(i)Domestic Residentialpremises (Other than Flatsor Block or line of Houses)Upto10 KL11 to15KL16 to25 KLAbove 25 KL(ii) Flats or houses in a Block of Upto10 KLflats or line of housesrespectively used wholly11 to15KLfor residential purposes.16 to25 KLAbove 25 KLRate/KLRs.P.2.5010.0015.0025.002.5010.0015.0025.00Minimum RateChargeable(including sewcharges)Rs. P.Rs.50/‐ permonth perdwelling unit(includingseweragecharges)Rs.50/‐ permonth per flatincludingseweragecharges)Frequency ofbillingMonthlyMonthly(iii) Individual flats or HousesPartly Commercial ‐ Rs.150/‐‐ p.m. per flatMonthlyin a Block of Flats or line of (including sewerage charges)houses respectively usedfor other than residentialpurposes.Non Water Intensive ‐ Rs.400/‐ p.m. per flat(including sewerage charges)Water Intensive ‐Rs.650/‐p.m.per flat(including seweragecharges)Private Hospital ‐ Rs.800/‐ p.m. per flat(including seweragecharges)Institutional ‐Rs. 300/‐ p.m. per flat(including seweragecharges)Pvt. Educational Instn ‐Rs. 400/‐ p.m. per flat(including sewerage charges)B. Commercial.Private Hospital ‐ upto 500 KL Rs.50/KL. Rs.800/‐ * (Water Intensive) /MonthlyAll others upto ‐500 KL Rs.35/KL.Rs.400/‐ (Non Water Intensive) /Private Hospitalss ‐ above 5000 KLMonthly.Rs.80/KL. for entire quantity.Rs.800/‐* (Water Intensive)All others – above 500 KL Rs. 60/KL. for/Monthlyentire quantity .Rs.650/‐ * (Water intensive) /Monthly.Regional Capacity Building Hub (RCBH)MissionDirectorate, JnNURM, MoUD, GoIModule Prepared by:CEPT University, Ahmedabad

Module 7: I nstitutionalStrengthenn ingPage | 48C. Partlycommercial.Upto10 KL11 to15 KLabove 15 KL5.0015.0025.00Rs.150.00 MonthlyD. Institutionalvt. Edn. Institution.40.00/K.L.. entirequantityRs.400.00 Monthlyii) Govt. Hospital 20.00/K.L. . entire Rs.200.00quantityiii) All others 30.00/K.L. . entire Rs.300.00quantityMunicipalBulk supplyMunicipalEntireconsumptionEntireconsumption15.007.00(whereverr Local‐‐‐‐‐‐MonthlyMonthlyBulk supplybodies met the costofinfrastructure)* Sewerage charges at 25% on water supply charges wherever sewer connectionsare provided*.Water intensive meanspremises used fully or partly as Theatres, Hotels, Boarding Houses, Lodges, Clubs,Private Hospitals, PrivateHostels, Kalyanamandapams, Clinicwith inpatient facility, Swimming baths Placesfor keeping animals, Vehicle Service Stations, NurseriesSource: http://www.chennaimetrowater.tn.nic.in/finance/finance_tariff.htmRegional Capacity Building Hub (RCBH)MissionDirectorate, JnNURM, MoUD, GoIModule Prepared by:CEPT University, Ahmedabad

Module 7: I nstitutionalStrengthenn ingPage | 49DELHI JAL BOARD:Water TarifffThe water tariffs consists of two parts.one is Service chargesandCategoryC‐I (domestic )Nature of PremisesPremises with built up area upto 200 sq.m.Charges per month (M)Rs.40/‐‐Premises with built up area above 200 sq.m Rs 120/ /‐C‐II(Non‐Domestic)C‐III(Non‐domestic)CommercialIndustrialRs.250/ /‐Rs 600/ /‐VOLUMETRIC WATER CHARGES (based on consumption)Category ICategory IIConsumption(per month)Upto 6Above 6 kls20 klsAbove 20 Kls and 7. .00upto 30 KlsRs. (B)er Kl.Above 30 Kls 10.000and upto 2. .00Consumption(per month)Upto 25 Kls 10.00Above 25 Kls andupto 50 Kls.Rs. (B) er Kl.20.00Above 50 Kls 30.00Category IIIIConsumptionRs.(B) per Kl.(per month)Upto 25 Kls15.00Above 25 Kls and 25.00upto 50 Kls.Above 50 Kls and 35.00upto100 Kls.Above 100 Kls. 50.00N.B. 50% ofvolumetricwater consumption charges are recoverable inevery category towards sewerageemaintance charges in respect of colonies/area where sewer lines have been led and are functional .Fixation of average consumption ofwater if DJB /private water meteris defectivee and till it isreplaced :‐‐1) Premisess having built up =Average of 20 Kls per month per connection per area upto200 sq.m.2) premises having buil up =Averagee of 30 kls per month per connection per area above 200 sq.m.Source: http://delhijalboard.nic.in/djbdocs/about_us/charter.htmRegional Capacity Building Hub (RCBH)MissionDirectorate, JnNURM, MoUD, GoIModule Prepared by:CEPT University, Ahmedabad

Module 7: I nstitutionalStrengthenn ingPage | 50BANGALORE WATER SUPPLY & SEWERAGE BOARD:TariffPROCEEDINGS OF GOVERNMENT OF KARNATAKASubject: Revisionof Water Rates of BWSSB ‐Reg.READ:1) G.O.No. HUD:139:MNI:90 Dt. 17‐7‐19912) G.O.No. HUD: 15:MNI:90 Dt. 27‐7‐19943) Notification No. WATER TARIFF W.E.F 01.02. .20051. DomesticSl NoSection 36(I) filtered Water:Category & ConsumptionRevised Water Tarrif PerKilo LitreMinimum ChargesIDOMESTIC (Sec. 36(i)) 1). 0‐80002). 8001‐250003). 25001‐500004). 50001‐750005). 75001‐1000006). 100000 & aboveSanitary Charges for domesticconnectionn6.009.0015.0030.0036.0036.0048.000201 .000676.0001326.002226.005826.00(i)Rs. 15.00 atflat rate forconsumption of 0 to 25000liters.(ii) From 25001 to 50000 liters 15% onwater supplycharges per month .(iii) 20% of water supply charges per month against forconsumptionof above 50000 liters .2. Non Domestic Section‐36(IV):Sl NoIIIIIIIIAIVVVISlab‐wise Consumption of Water (in K.Liters)NonDOMESTIC (Sec. 36(iv))1). 0‐100002). 10001‐200003). 20001‐400004). 40001‐600005). 60001‐1000006). 10000 & aboveIndustriesBidadi Industrial AreaLorry LoadsSwimming PoolsPublic taps Section 36 VIIRevised Water Tarrif Minimum ChargesPer KiloLitre36.00360.00039.00390.00044.00880.00051.001002.0057.002280.0060.0060.00 (per kilo liter)51.00 (per kilo liter)250.00 (per Load)60.00 (per kilo liter)3000.00 (per kilo liter)Source: http://www.bwssb.org/water_tarriff_f_prorata.htmlRegional Capacity Building Hub (RCBH)MissionDirectorate, JnNURM, MoUD, GoIModule Prepared by:CEPT University, Ahmedabad

Module 7: I nstitutionalStrengthenn ingPage | 51Other user charges• Stallage, rent orfee may be charged for use of facilities in a municipal market or municipal slaughterhouse.Fines• Fines realised from persons committing municipal offence will bedeposited to the municipal funds.6.5 LicensesLicence fee for non‐residential buildings• No premises canbe used fornon‐residential purposes without obtaining a licence from themunicipality. For issue of licence, municipality my realise fees.Licence for establishing or keeping open privatemarket• For establishing or running a private market licence has to be obtained from the municipality onpayment of fees.Licence for trading in flesh, fish or poultry intended for human food:• Licence has to be obtained for the abovetrade on payment of a fee.6.6 GrantsSpecific‐purpose grants• State government may give grants for specific purposes, such as, payment ofstaff salary. Such grantscannot be utilised for any purpose otherthan the purpose for which grants have been given.Block grants• Grants may alsobe given in untied form. The amount received against such grants may be utilised todischarge any such municipal function asmay be decided by the municipality6.7 Municipal BudgetGeneral Issues/ inadequacies• Defective structure and improper classification has made it blurred, non‐user friendly. Even theofficers who use it fail to understand it in whole. Illogical structure puts end to cost‐analysis approach whileprojecting or allocating budgets breeds in quantitative approach and as a result budgetcease to betool of control inmunicipal bodies.andthereby cost reduction.• Budgeting of how much rather than howbest and excessive reliance on incremental• Unrealistic past figures due to inadequate accounting system and lack of integration on budgetinggand accounting affects quality of budgetprojections.• Failsto provide overall picture to all concerned.• Absence of inbuilt resourcee allocation mechanism results in tolop sided development of variousservice.• System of budget lapse lead to spendingpsychology or ‘march rush’.• No importance to revised budget formulation kills any possibility of correcting defects of originalbudget.Regional Capacity Building Hub (RCBH)MissionDirectorate, JnNURM, MoUD, GoIModule Prepared by:CEPT University, Ahmedabad

Module 7: I nstitutionalStrengthenn ingPage | 52Budgetary System Reforms involves following step‐by‐stebudgetary system where it does notexists. (Introducing it asan important operational guide)• Reorganising and restructuring format of the budget, various heads, sub‐heads and items of thebudget. This also refers to integration of budgeting with accounting classification under revenue,capital and extraordinary categories and under different fundsas discussed in accounting reformsabove. (improving it as a operational guide)• Making budget document user‐friendly,informativethat is aneffective device of communication.User friendly budget structure is provided in budget manual.reforms• Designing formal budget document and• Improving practices of formulating budget or projecting budgetary requirements. Reducing excessiveedependence on present ‘incremental approach’.• Judicious application of different budgeting techniques. Linking physical targets ( performanceetargets, works) to financial allocations.• Devising model for budget/ /resource allocation. Improving it as a policy document. How much toallocate to each individual service, programme or purpose? Howmuch to allocate to developed areaaand to underdeveloped areaa of the city.• Introducing system of budgetary control and financial control. Controlling expenditure withinbudgetary allocations and discouraging non‐budgeted expenditure except exigencies.• Introducing system of subsidiary budgeting and cost accounting. It means introducing system ofdetailed calculations before arriving for budgetary demand or revenue projection.Newer Dimensions in Municipal Budgeting• Pro‐pooworks • Operation & Maintenance (O&M) Budgeting – Earmarking of Fund for O&Mof assets created byBudgeting – Earmarking of 20‐25% of OwnSource Revenue for Pro‐poor developmentownsource/government/donor‐ aided projects• Green Budgeting ‐ Earmarking of Fund for Environment Management, sustainability, conservation,disaster management etc.• Gender Budgeting ‐ Earmarking of Fund for women empowerment, social security and social justice• Budgeting for socially Vulnerable ‐ Earmarking of Fund for poor‐old Improving municipal governancee through participativebudgetingg• At first instance one will have to carry out various budgetary reforms pertaining to correcting itsstructure, format, classification, process etc.• Budget documentthen should undergo various changes as enlisted in the manual to make it user‐friendly.• Opinion building exercise formunicipal officers andpoliticians about the concept of participativebudgeting and to change theirmind set towards budget process.people, minority communities,single women, orphans, physically challenged etc• Participatory Budgeting – nvolving citizen into process• Implementation of Participative budgetingg can be undertaken broadly in two ways.Regional Capacity Building Hub (RCBH)MissionDirectorate, JnNURM, MoUD, GoIModule Prepared by:CEPT University, Ahmedabad

Module 7: I nstitutionalStrengthenn ingPage | 53• Throughh the legal amendment to the Municipal Act providing for people’s participation inmunicipal budget process within the framework envisaged by the 74th ConstitutionaalAmendment Act.• Throughh voluntary initiatives of a municipal body or municipal commissioner or politicalleader.• In case of voluntary framework of people’s participation in municipal budgeting the skyis the limit.These initiatives again can beof two types, one, pertaining to taking budgetto the people and two,involving people inthe actual process of budget formulation.6.8 Improved AccountingSystemULBs need to know about their financial operationsA sound financial accounting and reporting system should be in place which can answer the followingpractical questions of the ULB, such as:• What resources does the ULB own?• What amount does the ULB owe to others?• Howis the annual performance of the ULB, in its various functions?• What financial decisions can be taken to further improve theperformance, positionand futureservice capability of the ULB?Information Gaps• Report on the financial performance of the ULB• Statement of its financial positionFinancial management improvement through capacitybuildingSourcing trained man power is keyto maintaince of healthy financial management.The staff should beexposed to capacity building excercises and alsoman powershould be sourced well .There should be clarityon the structure, roles and responsibilities of various employees of the organization.There shouldbe regular audits to ensure transparency in thefunctioning.Double Entry Accrual Based Accounting SystemIt has been envisaged that ULBs should adopt a system ofaccrual based double entry accounting systemwhich wouldbring efficiency and accountabilityin the accounting system. The accounting system should beintegrated tothe overacrching e‐governance system to be implementedat the ULB level.6.9 CostManagement• PPP• Outsourcing of functions such as tax collection through commission agents• Expenditure rationalization• Energy auditRegional Capacity Building Hub (RCBH)MissionDirectorate, JnNURM, MoUD, GoIModule Prepared by:CEPT University, Ahmedabad

Module 7: I nstitutionalStrengthenn ingPage | 54Possible Instruments for Developing PPP Projects are:1. Construction Grant:It reduces the initial capital cost to the developer and is usually spread over the constructionn period. It isdisbursed based on progress of the Project. It is directed towards encouragingg private investment ininfrastructure. In projects where construction grant is given, it is generally a bid parameter.2. Minimum Revenue Grant:Govt/ULB promises to compensate the concessionaire if the actual revenue falls below projectedrevenue. Inreturn, the concessionaire promises to share a part of the surplus, if actual revenue is more than theprojected revenue.3. Operational Grant:It is paid during the operation of the asset to meet the revenue and expenditure gap. It is generally givenwhen the user charges are not adequate to cover the operating costor need tobe kept low for socialconsiderations.4. AnnuityPayment Mechanism:The private party funds the capital expenditure gap and operational expenditure. User charges, if applicable,are collected by the Government. Once Construction is complete, Government pays a fixed periodicpayment to private partyto compensate for expenditureS.NoCity1 Ulhasnagar2 Ambattur3 Greater Noida4 Madurai5 CoimbatorePPP IN SOLID WASTE MANAGCapacity Project NatureinTonnes300 Collection &Transportation40050350400Collection &TransportationCollection &TransportationGEMENT IN CIntegrated WasteProcessing andsanitary landfillIntegrated WasteProcessing andsanitary landfillCITIES ACROSS THE COUNTRYContract Type OfPPPPeriod Arrangement10 years12 years3 years20 years20 yearsManagementContractBOOT(TippingFee/Tonne)ManagementContractBOT(TippingFee/Tonne)BOT(TippingFee/Tonne)Status &RemarksProject Value ‐INR 45 CroreAwarded inOct,2007ULB PaysRs.750 per MTtoconcessionaireeProject Value ‐INR 7.2 CroreAwarded inAugust,2007Awarded toprivate playerin 2007Total NPV toConcessionairee‐ Rs.264.85CroreRegional Capacity Building Hub (RCBH)MissionDirectorate, JnNURM, MoUD, GoIModule Prepared by:CEPT University, Ahmedabad

Module 7: I nstitutionalStrengthenn ingPage | 555S.NoCityCapacityinTonnesProject NatureContractPeriodType OfPPPArrangementStatus &RemarksAwarded inNov,20076 Hyderabad7 Delhi(5 Zones)8 Guwahati9 Asansol,Durgapur10 Thiruvananthapuram38001000500693Integrated Waste 25 yearsProcessing andsanitary landfillIntegrated Waste 20 yearsProcessing andsanitary landfillIntegrated Waste 25 yearsProcessing andsanitary landfillIntegrated Waste 20 yearsProcessing andsanitary landfillonly sanitary 20 yearslandfillBOOT(TippingFee/Tonne)BOOT(TippingFee/Tonne)BOT(TippingFee/Tonne)BOT(TippingFee/Tonne)BOT(TippingFee/Tonne)Awarded toprivate playerin Feb,2009Awarded toprivate playerin ,2008JnNURM grantof INR 31 Crorein Project Costof INR 52 CroreAwarded toprivate playerin ,2007SFL land area of13.47 acreSource: PPP Position Paperon Solid Waste Management in India, Nov, 2009,Department of Economic Affairs, Ministry ofFinance, Government of India6.10 “Why Change”Generate funds from alternate / innovativesources• Obligatory function of ULBs ‐ Basic Urban Services for growing population and gross areaa• ULBs need to improve their credit worthiness in order to be ableto access capital markets• There is a need to augment the revenues of the ULBs.Citizen’s Right to Information• Mandatory to make available adequate and appropriate information to the citizens.• The existing system of accounting does not provide ready information to support RTI Act.• Transparency and AccountabilityRegional Capacity Building Hub (RCBH)MissionDirectorate, JnNURM, MoUD, GoIModule Prepared by:CEPT University, Ahmedabad

Module 7: I nstitutionalStrengthenn ingPage | 56References• Institutional resources for development, Ahmedabad. Comp. Padmanabh Joshi. By Khadpekar, Vivek S.Ed.• Jawaharlal Nehru national urban renewal mission : municipal finance improvement programme : aprimerr for accessing institutional finance By India, Ministry of Urban Development• Microfinance handbook : an institutional and financial perspective By Ledgerwood, Joanna• Contract framing as an institutional innovation in agriculture development By Sood, Ankita• Seminar on financial management and institutional reforms in highway sector 18‐19Nov.,2002,NewDelhi : technical papers. By Indian Roads Congresss [IRC]• Institutional development: theoretical aspects in urbanpractice. ByVonk, Marco• Property rights, resource management and governance: crafting an institutional framework for GlobalMarine Fisheries. By Kurien, John• Development patterns and institutional structures: China and India. By Gupta, S. P. & others• Tools for institutional, political and social analysis ofpolicy reform : a sourcebook for developmentpractitioners By World Bank, Washington D.C.• Infrastructure finance: institutional and macroeconomic issues. Vol.2. By Peterson, George E. & others• Institutional and policy framework for integrated port development By De Bakshi, Nilanjanaa• Effectiveness of contract farming as an institutionalinnovation : a case of Gujarat [Thesis] by Sood,Ankitaof CEPT University• Institutional structuring of Bus rapid transit systemfor Ahmedabad. [Students' Work]by Mohan,Manisha of CEPT UniversityElectronicc References• www. urbanindia.nic.in• www.jnnurm.nic.inn• www. tdma.in• www. adb.org• www. niua.org• planningcommission.nic.in• www. cgg.gov.in• www. mbmc.gov.in• www. ccsindia.org• itpi.org.in• www. bestarticleworld.com• indiacode.nic.in• www. worldbank.org.inRegional Capacity Building Hub (RCBH)MissionDirectorate, JnNURM, MoUD, GoIModule Prepared by:CEPT University, Ahmedabad

M 7.1 M 7.2 M 7.3 M 74ModuleOverviewInstitutionalstructure ofULBsJobDescriptionsfor ULB staffCareerDevelopment

MODULE7: INSTITUTIONALSTRENGTHENINGRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, AhmedabadContents of Module 7: Institutional StrengtheningSUB-MODULE 7.1Module Overviewo JnNURM and ULBso JnNURM reforms agendao Concepts and Definitionso Capacity building process and contribution to JnNURMModule 7:INSTITUTIONALSTRENGTHENINGSUB-MODULE 7.2InstitutionalStructure of ULBso Typology and constitution of Municipalitieso Hierarchy of ULBs : Municipal Corporations /Municipality/Nagarpalikao Issues with Municipal Structureo The various enabling frameworko Multiple Institutions and Role Overlapping• Urban Local Bodies• Urban Development Authority• Water supply and Sewerage Board• Special Area Development Authority• Slum Clearance/Improvement BoardSUB-MODULE 7.3Job Description ofULB staffo New skill development required to meet JnNURM demandso General capacity Development needso Continuing educationo Training and Capacity buildingo Personnel Management and skill and DevelopmentSUB-MODULE 7.4Case Studies andFurther Referenceo Case Study: case of role overlapping & othero Further Reading: Town and Country Planning Act,Municipality/corporations ActAwareness Knowledge SkillRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad1

M 7.1ModuleOverviewMODULE 7.1MODULE OVERVIEWBackground¤ Cities and towns of India constitute the world’s second largest urban system¤ They contribute over 50% of country’s Gross Domestic Product (GDP) and are central toeconomic growth¤ For these cities to realize their full potential and become true engines of growth, it is necessarythat focused attention be given to the improvement of infrastructure therein. Hence, a Missionmode approach is essential.¤ State capitals and a few other identified cities of religious and tourist importance have beenchosen on a priority basis¤ Special attention for providing basic services to the urban poor.Regional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad2

Context of JnNURM¤ Rapid urbanization and Demand for primary and tertiary Infrastructure¤ Level Of Infrastructure availability In India⁄ About 84% of the urban households have access to safe drinking water supply⁄ About 46% of urban population has access to sewerage and sanitation facilities⁄ About 33% of the urban centres are not covered by any drainage system⁄ Of the 5100 towns only 60 possess proper sewage treatment facilitiesRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, AhmedabadDeficiency in Urban InfrastructureUrban Population Coverage (%)Protected Water SupplyAvailability84Deficiency16Sewerage & Sanitation4654Latrine6931Refuse Collection/ Disposal7228Electrification7525Regional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad3

Urbanization & Demand For InfrastructureLikely Investment Needs In Urban India for next 15 yearsService/infrastructureHousingUrban water supply, Sanitation & RoadsSafe Water Supply & Sanitation as perCPHEEO normsUrban Transport InfrastructureUrban Infrastructure including backlog,new infrastructure and O&M as per RakesMohan CommitteeInvestment requirementRs. 52600 CrRs. 28035 CrRs. 172905 Cr.Rs. 207000 Cr.Rs. 250000 Cr.Urban Infrastructure issues in IndiaSector Issues Magnitude Direct Impact Other ImpactsWater Supply • In sufficient Coverage /Access to water supply•Inadequate level of services•Poor Quality•High distribution lossesSanitation /DrainageSewageTreatmentSolid Waste•In-sufficientCoverage / Access•Unaffordable low-costsanitation units•Capital intensive & high O &M•Non Existence•Frequent problems in runningexistent•Capital intensive•High O & M•Absence of door step collection•Segregation at source•Improper storage /transportation•Indiscriminate dumping•Absence of MIS•No clear out strategy for BioMedical•10-15 % of urban population donot have access•30-35 % not covered undercentralised system•Supply varies b/w 40-160 lpcd•TDS = 1500 – 2000 /tracemetals• 30-35 % UFW•30 % of Urban population donot have access• drainage coverage varies 05-70 %•Only 50 towns have some kindof treatment•Cities collect 30 – 80 % of solidwaste generate•Almost no attention for finaldisposal•More time spend on watercollection•Inadequacy in Hygiene•Water related Diseasescontamination•Loss of Working hours•Time spend on basicrequirements•Food & water contamination•Increase in Stomach relateddisease•Pollution of water resources•Impact on Ecosystem•Surface & Ground waterpollution•Blockage of natural /manmade drainage channels•Education of Girl Childs•Women Health•Depletion of Ground Waterresources•Medical bill•Loss of working days•Pollution of water resources•Asset loss due to waterlogging•Impact on d/s population•Spread of diseaselike Plague,cholera•Health Risk due to improperrecycling ofBio-medical wasteRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad4

Municipal Infra ChallengesTown ClassGiga Cities(> 10 million)Mega Cities(> 4 million)Million Plus(> 1 million)Class-1(> 0.1 million)Other MediumSmaller(

JNNURM - Broad Framework of the Mission and ULBs¤ JnNURM – a city based programme recognized the emerging importance of cities as thegrowth engines in national and international sphere¤ Development through partnership and mutual commitments between the stakeolders -Memorandum of Agreement (MoA) signed between the central government, state governmentsand ULBs containing the time bound commitment on reforms in order to access central fundsunder the Mission¤ Funding of projects identified in City Development Plans (CDPs) by respective cities with a 20-25 years perspective¤ Sector-wise detailed project reports to be prepared by identified cities listing projects alongwith their financial plans¤ Release of Central Assistance for Leveraging of Funds¤ Pursuing Urban Reform Agenda to sustain investments¤ Leveraging partnership for development through Private Sector participationRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, AhmedabadJNNURM – Reforms; the rationale¤ Reforms, it must be reiterated, are the unique and core of the JNNURM.¤ The JNNURM reforms have, thus far, been committed on the basis of the capacityof the state governments and ULBs to be able to implement them¤ Investments can not achieve long-run sustainability without being accompaniedby reformsRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad6

Need of these ReformsThese reforms are necessary for the ULBs to achieve:¤ Good urban governance¤ Ensuring participatory & inclusive development¤ Improved Financial management¤ Strengthening and sustaining infrastructures¤ Use of IT for better governance & service delivery¤ Promoting pro-poor urban governance¤ Environmental sustainability¤ Municipal capacity enhancementRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, AhmedabadReform Agenda Mandatory Reforms: State Level¤ Effective implementation of decentralization initiatives as envisaged in the Constitution(74 th CAA, 1992);¤ Repeal of Urban Land (Ceiling and Regulation) Act, 1976;¤ Reform of Rent Control laws balancing the interests of landlords and tenants.¤ Rationalisation of Stamp duty to bring it down to no more than 5% within missionperiod¤ Enactment of Public Disclosure law¤ Enactment of Community Participation law, so as to institutionalise citizen participationin local decision making;¤ Handover of the city planning functions to te ULBsRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad7

Mandatory Reforms: Municipal Level¤ Adoption of modern accrual based double entry system of Accounting.¤ Introduction of system of e-governance using IT applications like GIS and MIS forvarious urban services.¤ Reform of property tax with GIS, and arrangements forimplementation so that collection efficiency reaches at least 85%its effective¤ Levy of reasonable user charges by ULBs/ Parastatals with the objective that fullcost of operation and maintenance or recurring cost is collected within next sevenyears.¤ Internal Earmarking within local bodies, budgets for basic services to the urbanpoor; and¤ Provision of basic services to the urban poor including security of tenure ataffordable pricesRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, AhmedabadOptional Reforms¤ Revision of Bye-laws to streamline the approval process for construction of buildings,development of site etc.¤ Simplification of legal and procedural frameworks for conversion of land fromagricultural to nonagricultural purposes.¤ Introduction of Property title certification system in ULB¤ Earmarking at least 20-25% of developed land in all housing projects (both publicand private agencies) for EWS/LIG category with a system of cross subsidization.¤ Introduction of Computerized process of registration of land and propertyRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad8

Optional Reforms…….¤ Revision of byelaws to make rain-water harvesting mandatory in all buildings andadoption of water conservation measures¤ Bye-laws for reuse of recycled water¤ Administrative Reforms including reduction in establishment by introducing voluntaryretirement schemes and surrender of posts falling vacant due to retirement;¤ Structural Reforms¤ Encouraging Public Private partnershipRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, AhmedabadM 7.2InstitutionalStructure ofULBsMODULE 7.2INSTITUTIONAL STRUCTURE OF ULBS9

Evolution of MunicipalitiesHistorical evolution from the British era¤ Local government institutions have always existed in India in one form oranother since ancient times.¤ The present form of urban local government owes its genesis to the Britishrule.¤ The initiation began with Samuel Laing, member of the Viceroy's Council, inthe Budget Speech (1861- 62) proposing that local services should bebased on local resources.¤ Lord Mayo's Resolution of 1870 introduced the concept of electedrepresentatives in the municipalities.¤ Lord Ripon is considered the founding father of urban local government ashe implanted the concept of municipal authorities as units of selfgovernment.His Resolution of 18 May 1882 on local self government dealtwith the constitution of local bodies, their functions, finances and powers andlaid the foundation of local self-government in modern India.Regional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, AhmedabadEvolution of Municipalities¤ The first municipal body called a Municipal Corporation was set up in the formerPresidency town of Madras in 1688 and was followed by the establishment ofsimilar corporations in Bombay and Calcutta in 1762.¤ Lord Mayo's Resolution of 1870 encouraged the introduction of an elected Presidentin the municipalities. However in their present form and structure, the municipalbodies owe their existence to Lord Ripon's Resolution on local self-government,adopted on 18 May 1882.¤ Since then the structure of municipal bodies has remained by and large the sameeven though the number of urban areas has increased and their problems havebecome more and more complex.¤ Urban local government (Prior to the passage of the 74th Constitutional AmendmentAct ) was defined generally by the Municipal Corporations, Municipal Councils, TownArea Committees and Notified Area committeesRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad10

Evolution of Municipalities (a summary)Regional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, AhmedabadStatutory provisions for creation of the Municipal UnitsStatutory provision for creating a municipal unit is available in two forms.¤ Either the statute itself may establish a municipal authority, like the Bombay MunicipalCorporation Act (1888), the City of Nagpur Corporation Act (1948) and the DelhiMunicipal Corporation Act (1957).¤ Or it may empower the State Government concerned to create a MunicipalCorporation (Municipality,Municipal Authority, Municipal Council or Municipal Board)such as the Bombay Provincial Municipal Corporations Act (1949) and the GujaratMunicipalities Act (1964).¤ The extent of the municipality's power as well as the extent of government control overa Municipality/Municipal Council depends on the statute enacted for its creation.¤ Presently, the statutes confer wider controlling and supervisory powers on the stategovernment. This is due to two reasons: firstly, the Constitution does not demarcate thepower and the duties of the municipal authorities and secondly in the absence of anyclear-cut demarcation, it is obvious that state governments control municipal authoritiesRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad11

Typology & Sonstitution of MunicipalitiesRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, AhmedabadTypology and Constitution of Municipalities¤ Urban local government is not hierarchical. However, the Municipal Corporation, asan institution, enjoys a greater measure of autonomy than other forms of localgovernment.¤ It enjoys the power of dealing directly with the state government whereas themunicipalities have no direct access to the state government and are answerable tothe District Collector and Divisional Commissioner.¤ Municipalities and Corporations have deliberative and executive wings.¤ In general, deliberative wings of Municipal Corporations comprise the CorporationCouncil, the Standing Committee and the Mayor, whereas the executive wingscomprise the Municipal Commissioner, the Deputy/Assistant Municipal Commissioner,the Municipal Engineer and subordinate administrative staff.Regional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad12

Municiap MeetingsRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, AhmedabadCONSTITUTIONAL PROVISION FORURBAN LOCAL BODIESThe Constitution(74 th Amendment) Act, 1992Regional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad13

BackgroundUrban Scenario of the Country¤ Total urban population of the country is 28 crore contributing 28 per cent populationof the country (2001 census).¤ Level of urbanisation is highest in Goa (49.77 %).¤ Urban population has increased from 25.8 million in 1901 to 62.4 million in 1951and to 285.4 million in 2001,thereby showing more than ten fold increase in totalurban population.Regional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, AhmedabadBackground (continued)¤ Old existence of municipal governance in India1687 – Madras Municipal Corporation1726 – Calcutta Municipal CorporationBombay Municipal Corporation¤ Inadequate constitutional provision for local self government in urban areas.¤ Unstable democracy in municipal governance.¤ Public opinion crystallised in favour of constitutional guarantee for the provision of :- regular conduct of election- timely election in case of supersession- adequate representation of SC, ST and women- firm footing the relationship between the state government and the urban localbodies with respect to:a. functions and taxation powersb. arrangement of revenue sharingRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad14

Process of Enactment¤ The Constitution (73 rd Amendment) Bill was introduced in the Parliament in 1991¤ Referred to the Joint Parliamentary Committee.¤ Passed by the Lok Sabha on 22 nd December 1992 and by the Rajya Sabha on 23 rdDecember 1992.¤ Received assent of the President on 20 th April 1993.¤ Published in Government Gazette as the Constitution (Seventy Forth Amendment)Act 1992.¤ Came into force on 1 st June 1993.¤ Part IXA was introduced dealing with the issues relating to ULBs.Regional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, AhmedabadPROVISIONS INTRODUCED BY THE ACTRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad15

Typology of Municipalities¤ Three types of municipalities depending upon the size and area- Nagar Panchayat for an area in transition from rural to urban character- Municipal Council for smaller urban areas- Municipal Corporation for larger urban areas¤ Specifying criteria being left to the state legislatures vary a great deal from onestate to another.Regional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, AhmedabadComposition of Municipalities¤ Decided by the Legislature of a state.¤ Division of municipal area into territorial constituencies known as wards.¤ Persons to be chosen by direct election¤ Representation of Chairpersons of Committees, if any, at ward or other levels in theULBs.¤ Representation of persons having special knowledge or experience of municipaladministration (without voting rights).¤ Election of Chairperson to be specified in the state law.¤ Constitution of Ward Committees in all ULBs with a population of three lakh ormore.Regional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad16

Reservation of Seats¤ For women – not less than one – third of the seats¤ For SC/ST – according to the proportion of SC/ST population to the totalpopulation of the municipal area. Not less than one – third of the seats reserved forSC/ST shall be reserved for women belonging to the category.¤ State legislature may reserve seat for backward class citizens. This is an optionalprovision.Regional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, AhmedabadDuration of Municipalities¤ The municipality has a fixed term of five years from the date of first meeting.¤ Elections to constitute a municipality are required to be completed before theexpiration of the duration of the municipality.¤ If the municipality is dissolved before the expiry of five years, elections forconstituting new municipality are required to be completed within a period of sixmonths from the date of its dissolution.Regional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad17

Powers and Functions¤ Devolution of powers and responsibilities upon the ULBs to enable them to functionas institution of local self government.¤ Devolution in respect to :1. preparation of plans for economicdevelopment and social justice.2. implementation of schemes.¤ List of functions that may be entrusted to the ULBs has been incorporated as theTwelfth Schedule of the Constitution.Regional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, AhmedabadMunicipal FinanceState Legislature may, by law:¤ Authorise ULB to levy and collect taxes, duties, tolls, fees.¤ Assigning an ULB to get share of the taxes, duties etc. collected by the stategovernment;¤ Grant – in – aid to be given by the state government¤ Constitution of fund for crediting and withdrawal of money by the ULB.Regional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad18

Finance Commission¤ Article 243 I has asked the state government to constitute a Finance Commission forreviewing the financial position of the ULBs for making recommendations on :¤ Distribution of taxes, etc. leviable by the state government between the state andthe ULBs.¤ Allocation of such taxes between the ULBs at all levels in the state.¤ Determine the taxes, duties etc. to be appropriated by the ULBs.¤ Grants in aid to the ULBs¤ Measures needed to improve the financial position of the ULBs.Regional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, AhmedabadAudit of Accounts¤ Maintenance of accounts and other audit shall be done in accordance with theprovision of state law.¤ State Legislature is free to make provisions depending upon the local needs andinstitutional framework available.Elections¤ The superintendence, direction and control of the preparation of the electoral rollsfor, and the conduct of, all elections to the panchayats and municipalities shall bevested in the State Election Commissions.Regional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad19

District Planning Committee¤ A committee is to be formed in every state at the district level to consolidate the plansprepared by the panchayats and ULBs of the district and to prepare a draft developmentplan for the district as a whole.¤ Composition of DPC and the manner in which the seats shall be filled to be determined by thestate legislature.¤ Not less than four – fifths of the total number of members shall be elected from amongst theelected member of the panchayat at the district level and of the ULBs in the district inproportion to the ration between the population of the rural areas and of the urban areas inthe district.Regional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, AhmedabadPreparation of Draft Development Plan¤ The District Planning Committee in preparing the Draft Development Plan shall have regard to:¤ Matter of common interest between the Panchayats and the Municipalities including spatialplanning¤ Sharing of water and other physical and natural resources¤ Integrated development of infrastructure and environment conservation¤ Extent and type of available resources, whether financial or otherwise.Regional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad20

Metropolitan Planning Committee¤ In every metropolitan area (10 lakh or more population) a Metropolitan Planning Committeeshall be constituted for preparing draft development plan for the metropolitan area as awhole. The MPC will take into account the following:¤ Plan prepared by the Municipalities and the Panchayats in the¤ metropolitan area¤ Matter of common interest between the Municipalities and Panchayats including coordinatedspatial plans of the area¤ Sharing of water and other physical and natural resources¤ Integrated development of infrastructure and environmental conservation¤ Overall objectives and priorities set by the Government of India and the State Government¤ Extent and nature of investments likely to be made in the metropolitan area by agencies ofthe Government¤ Other available resources, financial and otherwise.Regional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, AhmedabadTwelfth Schedule Article 243WList of functions that may be incorporated to the ULBs :1. Urban Planning including town planning.2. Regulation of land – use and construction of buildings.3. Planning for economic and social development.4. Roads and bridges.5. Water supply for domestic, industrial and commercial purposes.6. Public health, sanitation conservancy and solid waste management.7. Fire services.8. Urban forestry, protection of the environment and promotion of ecologicalaspects.9. Safeguarding the interests of weaker sections of society, including thehandicapped and mentally retarded.10. Slum improvement and upgradation.Regional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad21

Twelfth Schedule Article 243W11. Urban poverty alleviation.12. Provision of urban amenities and facilities such as parks, gardens, playgrounds.13. Promotion of cultural, educational and aesthetic aspects.14. Burials and burial grounds: cremations and cremation grounds and electriccrematoriums.15. Cattle pounds: prevention of cruelty to animals.16. Vital statistics including registration of births and deaths.17. Public amenities including street lighting, parking lots, bus stops and publicconveniences.18. Regulation of slaughter houses and tanneries.Regional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, AhmedabadComposition of MunicipalitiesRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad22

System of Municipal Functions1. Commissioner System¤ Commissioner is the most important person.¤ Mayor is chosen for one year term, which is renewable.¤ Mayor lacks executive authority.¤ Acts as a figurehead.¤ Councillors work under standing committees.2. Mayor – in - Council System¤ Cabinet government replicating the formula operating at state and national level.¤ Composed of Mayor and a number of elected members in the cabinet each with separateportfolio.¤ Commissioner acts a the Principal Executive Officer subject to the supervision and control ofthe Mayor.¤ In case of large municipalities, Chairman – in – Council system works instead of MIC system.¤ In case of small municipalities, there is no CIC system, some standing committees are there.Regional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, AhmedabadULB¤ ULBs have two wings:1. Deliberative Wing –a) Mayor/ Chairperson/Presidentb) Municipal Council or Municipal Boardc) Standing Committees2. Executive Wing –a) Municipal Commissionerb) Deputy/Assistant Municipal Commissionerc) Municipal Engineerd) Subordinate Administrative & Technical StaffRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad23

FunctionsDeliberative Wing¤ Providing Policy and Direction to the organization¤ Adoption of budget¤ Demanding accountability of the Executive wing¤ Monitoring and evaluation of municipal work¤ Representing the interests of the electorsExecutive Wing¤ Discharging (i) statutory duties and (ii) implementation of Municipal Tasks under the overallpolicy direction of Executive Authority (EA).¤ Action-oriented planning¤ Financing and staffing (Administrative approval, financial sanction, Staffing etc).¤ Monitoring and evaluation¤ Acting as a bridge between MC and the Implementing arm.¤ Tasks related to (i) revenue generation, (ii) regulatory functions and (iii) delivery of services atvarious levels.¤ Reporting to EA through the normal organizational hierarchy.¤ Providing support to MC and Subject Committee as per approved procedure.Regional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, AhmedabadFunctions of ULBsProviding essential urban services:¤ Water Supply: Domestic, Industrial, Commercial¤ Sewerage/ Sanitary toilets, public conveniences¤ Drainage¤ Solid waste management¤ Roads: City streets, footpaths, pedestrian pathways, transportation terminals(passengers and goods), bridges/culverts, over-bridges, subways.¤ Transportation system accessories: traffic lights/signs, bus-stops, parking areas,street lighting.Regional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad24

Functions of ULBsRegulatory functions:¤ Control of building operations including removal of unauthorized construction and demolition ofdangerous buildings.¤ Regulation of bazars and slaughter houses.¤ Protection of environment including planting and caring of trees on roadsides and elsewhere.¤ Issue of licence for carrying on trade and business.These functions are more or less common among all municipal bodies. In Sikkim Act, they arereferred to as core functions. In some other State Acts, they are called Obligatory functions.Regional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, AhmedabadFunctions of ULBsDiscretionary functions of municipality¤ Town planning and development, including development of commercial and tourisminfrastructure.¤ Environmental protection, including provisioning of parks and playgrounds¤ Public health and sanitation, including establishing out-door clinics, hospitals, measures forcontrolling communicable diseases, public vaccination, promoting personal hygiene etc.¤ Education and culture, including provisioning of schools, libraries, entertainment in public places,organizing fairs, exhibitions, flower shows etc.¤ Public welfare: Public information centres, public welfare centres, swimming pool, public bathingfacilities, burial grounds/crematorium etc.Regional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad25

Functions of ULBs¤ Assigned functions of municipality¤ The government may from time to time assign some of its functions to the municipality either asdelegated task or devolved function. (For example, execution of Urban Poverty AlleviationProgramme).¤ Functions relating to revenue generation:¤ A local government has its own fiscal powers. It is the duty of the municipal body to utilise thispower fully, so that it can generate enough revenue from its own sources. A local governmentthat depends too much on the state government cannot fully discharge its obligations to thecitizens.Regional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, AhmedabadProcess of Core Municipal Services1. Water SupplyULB supplies water for domestic, industrial, commercial and public utility purposes.A. Types of Watera) fresh water or sweet waterb) underground waterB. Stagesa) Purificationb) DistributionApart from some large corporations, in most cases water is supplied by the state government –Public Health Engineering Department or Water Supply Board etc.Regional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad26

Process of Core Municipal Services2. Drainage and SanitationRole of ULB - construction, maintenance and cleaning of sewers, drains and public toilets.Types of Arrangementa) off – site arrangementb) on – site arrangementa) Off – Site Arrangement¤ ULBs have sewerage network and underground drainage with sewage treatment plant.¤ Individual buildings are connected to the sewer sytem.¤ Generally the municipal corporations and large municipalities have this arrangement.¤ In most cases, part of the city area is covered by this arrangementKolkata – 55 to 60 % areaKurseong – 20 to 25 % areaRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, AhmedabadProcess of Core Municipal Servicesb) On – Site Arrangement1. open drains2. toilets – septic tank latrines and pit latrinesULBs role is¤ to construct and clean the drains and sewer lines¤ To construct, clean and maintain the public toilets¤ To provide individual toilets to the poor¤ To clean the septic tank sluge by cesspool¤ To clean the waste water in sewage treatment plantRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad27

Process of Core Municipal Services3. Solid Waste Management- collection, transfer, recycling, resource recovery (composting, waste to energy etc.)and disposal of municipal solid waste.SWM includes- Minimising waste- Maximising environmentally sound waste reuse and recycling- Promoting environmentally sound waste treatment and disposal- Extending the coverage of waste management servicesRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, AhmedabadProcess of Core Municipal ServicesStages Involved in SWM1. Primary collection of SW from the household level2. Primary transportation to municipal waste bins and collection points3. Secondary transportation of garbage from municipal bins to disposalsites4. Actual disposal of waste.Methods of Disposal1. Sanitary land – fill2. Incineration3. Bio – gas generation4. Composting5. Fuel pelletisationRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad28

Capacity Building Need of the ULBs andJnNURMRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, AhmedabadKey Issues Faced by the ULBs¤ Planning¤ Financial Management¤ Accounting¤ Man power rationalization¤ Procurement of services/goods¤ Management Information system & monitoring systemRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad29

Major Steps to Overcome the Issues¤ Systemic changes⁄ Sift from ad-hoc to Longer term perspective planning⁄ Adapting new generation techno-enabled systems⁄ Rational staffing, induction of new cadres⁄ Setting up job chart and performance indicators⁄ System of incentives and accountability¤ Training & Capacity building⁄ Conducting comprehensive and continuous training needs assessment⁄ Round-the-year Institutionalized training for all the staffs¤ Effective citizen interface⁄ Citizens charter⁄ Grievance redressal system⁄ Participatory planningRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, AhmedabadHuman Resource Management need for ULBsThe ULBs should have;¤ A revised staffing norms (as per size and population) – redundant posts should beabolished and new cadres to be inducted¤ Rationalization ofGovernance systemstaff deployment as per newly conceived BPR and E¤ Assessment of training needs and continuous training¤ Defined job chart¤ Performance-linked promotion strategyRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad30

Capacity Building Needs for ULBsThe ULBs should have;¤ A comprehensive organizational development strategy with defined targets inthe areas of;⁄ Improved Credit worthiness (CRISIL rating for accessing funds from market etc.)⁄ Cost management (reduction of establishment costs, energy audits, contractingout, PPP for infrastructure and service delivery etc.)⁄ Effective citizen interface (citizens charters, grievance redressal cells etc.)⁄ Better service delivery (e-enabled services, pro-poor services, services forspecial groups etc.)Regional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, AhmedabadCapacity Building Needs for ULBsThe ULBs should have;¤ Comprehensive training and skill up-gradation programmes;⁄ Round-the-year institutional training⁄ Exposure visits⁄ On job handholding training and class room training⁄ Correlation between training and job chart⁄ Training for skill, knowledge and attitude betterment⁄ Creating a pool of resource trainers for ToT⁄ Assessment of performance followed by trainingRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad31

Role Overlapping & Conflict with multiple institutionsRoles/functional jurisdictions of the municipalities often overlaps with other institutionsbecause of;•Undefined scope of work of parastatals/line departments often lead to their roleoverlapping with ULBs•Lack of capacity of ULBs to cater to the need of the citizen (example PHE andKMW&SA for water supply in West Bengal)•Lack of capacity of ULBs to invest in creation of infrastructure and their O&M(example KMDA for construction & O&M of STPs in West Bengal)Regional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, AhmedabadRole Overlapping & Conflict with multiple institutionsSome examples;Conflict with Development Authorities in land use control and developmentConflict with Development Authorities in planning and implementation of schemeswhere DAs have been identified as nodal agency to implement any large transmunicipalprogramme like JnNURMConflict with PHE and Service agency (such as KMDA/KMW&SA) who provideswater supply/Sewerage in many ULBs but ULBs have been asked to levy user chargeConflict with PWD/DA over advertisement tax rights on the state government assets(such as roads) passing through ULBsConflict with defense cantonment boards for using their territory to lay/fetch watersupply/electricity transmission linesRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad32

M 7.3JobDescriptionsfor ULB staffMODULE 7.3JOB DESCRIPTIONS FOR ULB STAFFM 7.4CareerDevelopmentMODULE 7.4CAREER DEVELOPMENT33

6713 th FCRecommendationsStrengthening Urban GovernanceRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, AhmedabadThis Presentation Covers…..68• Constitutional basis of FCs• Terms of reference & composition• Methodology• Context• Distribution of grants• General performance grant• Strengthening ULBs• General recommendationsRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad34

69Constitutional Basis• Constituted by the President of India under Art. 280 of the Constitution.• Its functions are:‣ Distribution of net proceeds of taxes to be shared between the Centre and theStates, and the allocation between the States, the respective share of suchproceeds.‣ The principles which should govern the grants-in-aid by the Centre to States out ofthe Consolidated Fund of India.‣ The measures needed to augment the Consolidated fund of a State to supplementthe resources of the Panchayats and the Municipalities in the state on the basis ofthe recommendations made by the State Finance Commission.‣ Any other matter referred to it by the President in the interest of sound finance.Regional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad13th FC - Terms of Reference70• the measures needed to augment the Consolidated Fund of a State to supplement theresources of the Panchayats and Municipalities in the State on the basis of therecommendations of the Finance Commission of the State• may review the present arrangements as regards financing of Disaster Management withreference to the National Calamity Contingency Fund and the funds envisaged in the DisasterManagement Act ,2005 and make appropriate recommendations thereon.Regional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad35

Composition of the Commission71• Vijay L. Kelkar• B.K. Chaturvedi• Indira Rangarajan• Atul Sharma• Sanjav Mishra• Sumit Bose– Chair– Member– Member– Member– Member- SecretaryRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad72Methodology• Reviewed the framework and recommendations of the previous Commissions• Considered the views of :‣ Ministry of Urban Development, Planning Commission, State Governments,ULBs• Examined the reports of‣ Second Administrative Reforms Commission‣ National Commission on the Review of Constitution• XI Five Year Plan Document• Sponsored Seminars and Studies - Urban Best Practices• Consultations with state and local governments - visitsRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad36

The Context73• Urban population projected at 38% by 2026‣ 2/3rds projected population increase is urban• Shrinking ULB fiscal spaceYear 1998-99 2001-03 2007-08% GDP 1.74 1.56 1.54•Significant increase in expenditure‣ Impact of 6 th Pay Commission‣ Additional O&M costs‣ Investments on accounts and computerisationRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, AhmedabadThe Context …..74• Below normal core civic services‣ 70% HHs have piped water supply‣ 74% have access to latrines‣ 23% have sewage treated‣ 30% solid wastes treated before disposal• Problems in the data supplied by the states‣ Divergence in the quality of analysis and scope and scale of recommendations‣ Limitations in the use of SFC data/ recommendationsRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad37

The Context …..75• Non-synchronisation between NFC and SFCs• Quality of SFCs, implementation of reports• Devolution index not available for ULBs‣ Index not inclusive and comprehensive• Resource requirement estimated by MoUD‣ JnNURM cities during 2005-12 - Rs.2,76,822 cr‣ All ULBs - Rs.7,91,080 crRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad76Allocations by NFCs and Drawls by ULBs(Rs in crores)Commission Allocation Drawn BalanceXth 1,000 833.88(83.39%)166.12(16.61%)XIth 2,000 1,751.89(87.59%)248.11(12.41%)XIIth(Up to Nov.09)4,500 4,024.54(89.43%)475.46(10.57%)Regional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad38

77Reasons for Non-drawl• Non-submission of UCs by state governments• Lack of maintenance of accounts by LBs• Slack attitude of LBs to get accounts audited• Reflect non-performance by state governmentsRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, AhmedabadUnexploited Property Tax Potential78• ULBs unable to exploit PT as revenue source• Study of 36 large cities; 35% urban population• PT revenues estimated at Rs.4,522 cr.‣ Highest Per capita - Mumbai- Rs.1,334CityPer Capita in RsCity Demand Collection %Co to D• Kolkota• Asansol• Durgapur• Dhanbad• Patna• India10351024921091011229616871614025486608633372539Regional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad39

79Regional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad7980Unexploited Property Tax Potential• Coverage 56%• Collection efficiency 37%• If projected to all-India collection‣ Lowest Rs.6,274 cr‣ Highest Rs. 9,424 cr.• Constitute between 0.16 and 0.24 % of GDP• Projected PT yield based on improved coverage and collection @85%‣ Lowest Rs. 22, 000 cr‣ Highest Rs. 33, 000 cr• Constitute 0. 52 to 79% of GDPRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad40

81PT – International Experience (% GDP)1970-1980 1980-1990 1990-2000 2000-2009OECDCountries1.24 (16) 1.31 (18) 1.44 (16) 2.12 (18)DevelopingCountries0.42 (20) 0.36 (27) 0.42 (23) 0.60 (29)TransitionCountries0.34 (1) 0.59 (4) 0.54 (20) 0.67 (18)All Countries 0.77 (37) 0.73 (49) 0.75 (59) 1.04 (65)Figures in brackets refer to number of countriesRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, AhmedabadBest Practices of ULBs (21)82• Resource mobilisation (4)• Expenditure compression through outsourcing and PPP (5)• Accrual accounting, audit and transparency (4)• Delegation of powers to ULBs – 3Fs (1)• Transfer of funds to local bodies (1)• Accountability of local bodies (2)• In situ Slum development (2)• Maintenance of municipal financial statistics (2)Regional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:82CEPT, Ahmedabad41

83Distribution ofGrantsRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad8384 Distribution of Grants – Guiding Principles• Need to bolster finances of ULBs to meet their obligations• Support through predictable and buoyant revenue sources• Need for predictability in devolution criteria• A percentage of divisible pool of taxes to local bodies as grants-inaidRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad42

85Distribution of Grants• 2.28% of divisible pool to Local bodies‣ Rs. 87,519 crores• Two Components‣ General Basic Grant - 1.50%o All states eligible to draw as per criteria laid down‣ Special Area Grant – both basic and performance‣ General Performance Grant – 0.78%o Access to states which meet the criteriao From 2011-12 -- 0.5 %o 2012-13 to 2014-15-- 1.0%Regional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad% Allocation from Divisible Pool86• X Finance Commission - 1.38• XI Finance Commission - O.78• XII Finance Commission - 1.24• XIII Finance Commission - 2.28Regional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad43

Criteria for Distribution of Grants87Parameter•XI NFC%XII NFC%XIII NFC%Population 40 4050Distance from Highest Per capitaIncome20 2020Revenue efforta) With respect to state’s ownrevenue sb) With respect to GSDP10 10Geographical area 10 1010Index of Decentralisation 20 1015FC local body grants utilisation Index -- --510--Regional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, AhmedabadTotal Grants Allocated by 13 th FC88• Total Grants to Local Bodies Rs. 87,519 cr• Basic Grant Rs. 56,335 cr• Special Area Grant Rs. 1,357 cr‣ Special Area Basic Grant Rs. 798 cr‣ Special Area Performance Grant Rs. 559 cr• Performance Grant Rs. 29,826 cr• Distribution rural and urban based on 2001 population‣ Urban 26.82% and Rural 73.18%‣ No urban / rural distinction for Special Area GrantRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad44

Allocation to Urban Local Bodies89• Basic Grant• Performance GrantTotal- Rs.15,110 cr.- Rs. 8,000 cr- Rs. 23,111 crRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad90XIII Finance CommissionGeneral Basic GrantAccess to all statesNo conditionsRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad9045

91Performance grant aimed atstrengthening urban governanceButConditional AccessRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad9192X and XI NFC Conditions• X NFC‣ Not to be used for establishment costs‣ ULBs to provide matching contribution‣ Grants to be additional to state devolutions• Release of Grants in FOUR equal installments• XI NFC‣ Should not be used for salaries and wages‣ Funds to be earmarked for O&M of core civic services like Primary Education,Health, Drinking Water, Street Lights, Sanitation•Regional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad46

XII NFC Conditions93• Need to discourage conditionalities• 50% of grants to ULBs to be earmarked for SWM through PPP• State should earmark part of the Funds to build database• State to pass the grants to local bodies within 15 daysRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad94XIII Finance CommissionGeneral Performance GrantNINE Conditions to AccessRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad9447

95State-wise Share of Performance GrantStateGrantGrantStateRs. In CroresRs. In CroresAndhra Pradesh 664.23 Manipur 28.36Arunachal Pradesh 11.03 Meghalaya 27.78Assam 87.69 Mizoram 32.51Bihar 251.73 Nagaland 26.56Chhattisgarh 144.38 Orissa 171.82Goa 28.26 Punjab 217.78Gujarat 450.65 Rajasthan 413.40Haryana 150.29 Sikkim 0.90Himachal Pradesh 28.33 Tamil Nadu 821.12Jammu & Kashmir 70.68 Tripura 19.40Jharkhand 147.35 Uttar Pradesh 1022.14Karnataka 689.55 Uttarakhand 65.89Kerala 251.46 West Bengal 559.22Madhya Pradesh 517.24Maharashtra 1099.99 Total 8,000Regional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad95Forfeiture of Performance Grant96• State/s failing to comply with the conditions forfeit the grant for that year• The forfeited amount distributed to states‣ 50% of forfeited amount among all states as specified in Annex 10.13‣ Remaining 50% distributed to the performing states in the ratio specified in Annex10.13• Similar forfeiture of Special Area Grant‣ Distribution to performing and non-performing states as specified in Annex 10.6Regional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad48

97If no State is eligible to access Performance Grant, theamount will not be disbursedProspective Entitlement to Performance GrantFrom the succeeding year after complying with conditionsRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, AhmedabadAccessing General Performance Grant981. Constitute State Property Tax Board‣ Enumeration of properties‣ Review PT system and suggest basis for assessment and valuation of properties‣ Recommend modalities for periodic revision‣ Legislation or executive instructions by state government.‣ 25% properties to be assessed by March 2015‣ Publication of Board’s work plan in the State GazetteRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad49

Discussion Issues99Problems in effective valuation of properties• Validity of executive instructions (instead of legislation)• Effects of centralised valuation and collection by ULBs• Ensuring support of ULBs in valuation by Board• Making central valuation mandatory• Should the Board monitor the collection of PT?• Coordination between the Board and DMAs• Sources of funding of the Board?• State allocation or contributions from the ULBs• Autonomy of the Board – financial and administrative• Training and capacity building requirements at Board and ULB levels• IEC efforts required on the valuation processRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, AhmedabadAccessing General Performance Grant1002. ULBs to be fully empowered to levy PT tax without hindrance‣ Self certification‣ Exemptions a common feature‣ Government or municipal properties‣ Charitable, religious, educational properties‣ Low valued properties for equity‣ Rebates and reliefs – owner occupied‣ Waivers – penal interest payable‣ About 10% properties come in this category‣ Revenue cost of exemptions for 36 cities Rs.531 cr.Regional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad50

Revenue Cost of Exemptions 2006-0707101CityRs. in Cr.Mumbai 259.85Indore 43.22Ludhiana 41.69Durgapur 0.27Dhanbad 0.01Amritsar 40.50Regional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, AhmedabadDiscussion Issues102• Legal hindrances to fully exploit the potential• Ceiling imposed• Freedom to revise property tax periodically• Limiting the % of increase during revision• Elimination /reduction of exemptions• State compensation for the exemptions• Collection of service charges from state government properties• Legal changes required to enable ULBs to levy and collect property tax withoutconstraints?Regional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad51

103Accessing General Performance Grant3.Constitute Local Body Ombudsman‣ To look into complaints of corruption and maladministration of officials and electedreps.‣ Self certification by state governmentRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, AhmedabadDiscussion Issues104• Exclusive Ombudsman for ULBs• Can the function be entrusted to Lok Ayukta?• Wholly or in the interregnum period? (If, legislative process takes time)• Criteria for constituting the Ombudsmen for ULBs?• Municipal population or Number of ULBs• Should parastatals be included in its jurisdiction?• Should it be multi-member or single member body?• Composition and qualification of members• Scope of work of OmbudsmanRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad52

Accessing General Performance Grant1054. State government to put in place benchmarks for delivery of essential services‣ Initially four services – WS, Sewerage, SWM, SWD‣ ULBs to notify every year standards to be achieved by the end of next fiscal year‣ Benchmarks on the lines of MoUD’s Handbook‣ Commitment through consultative process‣ To be published in State GazetteRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, AhmedabadDiscussion Issues106• Availability of adequate and authentic data on levels of delivery of essentialservices• What are the financial implications of collecting data and finalizing thebenchmarks?• Do the ULBs have adequate staff & are they trained to undertake thebenchmarking exercise?• What type of consultative process to be put in place to finalize the benchmarks?• Costs of collection of data and benchmarking• Consequences of finalizing the benchmark and not realizing them in the next fiscalyear either due to financial, technical, or other reasons?Regional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad53

Accessing General Performance Grant1075. Fire-hazard Response and mitigation plan to be put in place by all metros‣ To be published in State GazetteRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, AhmedabadDiscussion Issues108• Responsibility of ULB or the Fire Services Dept.• Role of ULB in the process• Relations between ULB and city Fire ServicesAgency to put the process in place and implementit?• Who is accountable for implementation of theplan put in place?• What are likely costs of putting such a system inplace and who will bear it?Regional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad54

Accessing General Performance Grant1096.State should put in place Audit system‣ C&AG be given TG&S over audit of ULBs‣ CAG and LFA Audit Reports to be placed before theLegislatureRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, AhmedabadDiscussion Issues110• Factors inhibiting preparation of accounts – staff, costs, training and capacitybuilding, etc.• Is there a case for exclusive municipal accounts service? What are itsimplications?• Can the accounts updation be undertaken prospectively ?• Disincentives to ULBs for not maintaining, updating and getting the accountsaudited?Regional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad55

Accessing General Performance Grant1117. Electronic transfer of grants to ULBs in 5 days‣ Alternatives if banking infra weak – in 10 days‣ Self certification by statesRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, AhmedabadDiscussion Issues112• Do all the ULBs – small towns & remote areas - have banking infrastructure?• Do all the bank branches have core banking facility to facilitate transfers?• Legal and administrative problems in the electronic transfer• What legal, administrative and procedural changes are required at thestate level?• Finance & Municipal Administration Department, Directorate ofMunicipalities, TreasuriesRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad56

Accessing General Performance Grant1138. Prescribe through an Act qualifications of members of SFCs through passage oflegislationDiscussion Issues• Should the reform be limited to qualifications of members of SFC or other aspects ofconstitution and working also?• What should be the composition of SFC? Should it consist of only experts? Or ex-officiomembers? Can a majority be public representatives?• Term of office of the SFC• Period for the consideration of SFCs recommendationsRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, AhmedabadAccessing General Performance Grant1149.Introduction of a supplement to budget document on maintenance of accountsalong with a certificateIssue‣ Required legal changes‣ Required administrative changesRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad57

Compliance Mechanism115Conditionality/ ReformCompliance Mechanism1. Introduction of a supplement to budget relating to maintenance • C&AG Certificationof accounts1. Putting in place audit system • C&AG Certification1. Establishment of Local Body Ombudsman • Passage of legislation1. Electronic transfer of grants to LBs in 5 days • Self-certification1. Prescription of qualifications to members of SFC membersthrough legislation• Passage of legislation1. Empowering ULBs to levy property tax without hindrance • Self-certification by stategovernments.1. Constitution of Property Tax Board • Passage of legislation1. Benchmarking delivery of civic services • Publication in State Gazette1. Fire-hazard Response and Mitigation Plan • Publication in State GazetteRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad115116StrengtheningUrban GovernanceOther RecommendationsRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad11658

Constitutional Issues117• Amend Art 280(3) (bb) &©‣ Replace the words‘on the ‘basis of SFC recommendations’ with ‘aftertaking into consideration’• Amend Art 243-I to include the phrase ‘or earlier’ after the words ‘every fifthyear’Regional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, AhmedabadImplement S2 JnNURM Reform118• Speedy implementation of S2 reform under JnNURM‣ Assigning or associating ULBs with planning anddelivery functionsRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad59

Urban Development Authorities119• Study of 4 UDAs• Revenue from land sale or lease by UDAs constitute:‣ 6-390% of aggregate own revenues‣ 5-120% of total revenues‣ 35 - 4412% of property tax revenues• UDAs to share a % of their income including from sale of land with ULBsRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, AhmedabadService Charges on Central Properties120• Legislation to regulate levy of user charges on central properties• GoI and State Governments to issue executive instructions in the interregnum period• Charges on central properties to be on par with state properties• Where state properties are exempted so the central properties tooRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad60

Cantonments Plans121• City CDPs to incorporate plans for the civilian portions of Cantonments• Must be brought before DPCs• Facilitates integration in services like water schemes under JnNURMRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, AhmedabadFire Services122• Fire Services‣ A portion of 13 th FC grants to ULBs to be spent on revamping fire services‣ May support state Fire Services DepartmentRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad61

Mining Royalties123• Mining Royalties‣ State governments should share a portion of mining royalties with ULBsRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad124Nagar Panchayats & LF Audit Dept.• Nagar Panchayats• Need to formulate guidelines for constitution or upgradation of Nagar Panchayats• Strengthen Local Fund Audit Department• Capacity Building• Personnel augmentationRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad62

125StrengtheningUrban GovernanceGeneral RecommendationsRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad125General Recommendations126• Grants to be released in January and July‣ Subject to submission of UC‣ No other documentation required• Ensure ULBs to develop and use comparable and audited data•ULBs to fully exploit taxation powers‣ PT, Profession Tax and recovery of O&M costs‣ User charges on roads if lead to tangible commercial benefit‣ Incentivising ULBs for such effortsRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad63

General Recommendations127• ULBs to access market based financing of infrastructure (only Rs. 1200 croresraised)• Use of Pooled Financing Model ULBs to implement best practices• States may incentivise revenue collection through matching grantsRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, AhmedabadGeneral Recommendations….128“ Virtuous cycle enlarged with increased financial support and enhanceddevolution of functions and functionariesRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad64

129What are the next steps?• Guidelines from the MoUD• Model Act – Guidance notes, Primers on each reform area,• Circulation of good practices relating to conditions for guidance• Capacity building and training• Working Groups to workout details through consultations• Responsibility of other departments• Panchayati Raj, Finance, etcRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad130In Conclusion• 13 th FC initiated a multi-faceted reform process• Impetus to urban governance improvement• Takes forward JnNURM and other reform initiatives• Performance based grants to states/ULBs• Committing the states to initiate and implement reforms• Precedent for future FCs to link grants to urban reforms and performance improvement• Indication to SFCs to examine and recommend measures to improve urban governancecomprehensivelyRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad65

131www.asci.org.in/13thfc.urbanRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, Ahmedabad131Reference of Govt. Order/Notification/Amendment to Rule/Actpertaining to Reforms Agenda underJnNNurm in West BengalRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:132CEPT, Ahmedabad66

Urban Poverty Eradication MissionUrban Poverty Eradication Mission launched in the State vide StateGovernment Memorandum No. 45/MA/C-10/3S-15/2008 dated 14thJuly, 2008Regional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:CEPT, AhmedabadCommunity Participation LawReform AgendaGovt. Order ReferenceEnactment of Community Amendment to the West BengalParticipation Law to Municipal Act (Gazette Notificationinstitutionalizecitizen No. 224/MA/O/C-4/1A-2/2009participation and introduction of dated 15 th May, 2009 under Sectionthe concept of Area Sabha in 2.6) has been made in 2008 tourban areasincorporate the provisions related toconstitution and rules for functioning ofArea Sabhas.Regional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:134CEPT, Ahmedabad67

Public Disclosure LawReform AgendaGovt. Order ReferenceEnactment of Public Disclosure Amendment to the West BengalLaw to ensure preparation of Municipal Act (Gazette Notificationmedium term fiscal plan of ULBs/ No. 224/MA/O/C-4/1A-2/2009Parastatals and release of dated 15th May, 2009 under Sectionquarterly performance 2.6) has been made in 2008 toinformation to all stakeholders incorporate the provision related tocommunity participation in municipalareas.Regional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:135CEPT, AhmedabadBudget Earmarking of 25% of Own Source Funds forServices to Urban PoorState Government Order vide No.1249/MA/C/10/3S-61/07 dated 26.10.07 hasbeen issued in this regardRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:136CEPT, Ahmedabad68

¤ Scanned copy of Govt. Order for Earmarking of at least25% of ULB Budget for Urban PoorRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:137CEPT, AhmedabadScanned copy of West Bengal Municipal( Amendment) Bill 2010 for Creation of BSUP Fund for Urban PoorRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:138CEPT, Ahmedabad69

Basic Services to Urban PoorReform AgendaSecurity of Land TenureGovt. Order ReferenceGovt. of West Bengal has issued amemorandum No. 112/MA/O/C-4/1A-2/2010 providing long termlease to the urban poor staying formore than 20 yrs over vested landover a land of max 2 cottahs toensure Security of land tenuresimilar to rural areas.Regional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:139CEPT, AhmedabadGovt. Memorandum on Providing Secure Land Tenure to Urban PoorRegional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:140CEPT, Ahmedabad70

Cost Recovery – Water SupplyReform Agenda100% cost recovery on WaterSupplyGovt. Order ReferenceMunicipal Affairs Department, GoWBissued an Notification No. 82/MA/O/C-4/1A-9/97 dated 31.01.2003Regional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:141CEPT, AhmedabadConversion of agricultural land for non-agricultural purposeReform AgendaSimplification of legal and proceduralframeworks for conversion of agriculturalland for non-agricultural purposesGovt. Order ReferenceNecessary provisions have been made in theWest Bengal Land Reforms Act. (Vide Govt.Gazette Notification No 4296-LR.1A05/07GE(M) dated 17th September2009, Land and Land Reforms Dept,GoWB.Regional Capacity Building Hub (RCBH)Mission Directorate, JnNURM, MoUD, GoIModule Prepared by:142CEPT, Ahmedabad71

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