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POVERTY REDUCTION STRATEGY TN

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6. loans from financial institutions and some of the larger municipal bodies can also<br />

raise funds from market from public through floating of Bonds.<br />

Strategies for the urban local government for raising own source revenue should<br />

include the following:<br />

1. fuller exploitation of property tax, vacant land tax, and development charges in the<br />

municipalities,<br />

2. augmenting the tax base of the slums by de-notifying the slums with adequate<br />

services and levy and collection of municipal and other taxes from these areas,<br />

3. levy of user charges for individual service connections (for water supply, sewerage,<br />

electricity, etc.) on full cost recovery basis in the slum areas,<br />

4. selling the land title (on full/part cost recovery basis, based on the economic profile<br />

of the beneficiaries) to raise capital for other capital works on slum upgrading, and<br />

5. raising additional rental income from property owned by the urban local bodies.<br />

The Twelfth Central Finance Commission has sanctioned “Specific Needs Grant”<br />

of Rs. 250 crore for slum development in Chennai and other towns in the State during<br />

2005-20. This should be efficiently utilized.<br />

The First and Second State Finance Commissions established the deficit in urban<br />

infrastructure in Tamil Nadu at around Rs.11250 crore, while some studies point out that<br />

the effective capacity of urban local bodies (ULBs) to invest in sustainable urban<br />

infrastructure over the next five years to be approximately Rs. 4245 crore. The Go<strong>TN</strong>’s<br />

Eleventh Plan document also notes that recognizing the need for continuing the reforms<br />

in urban governance and service delivery arrangements, and the capacity of the ULBs to<br />

absorb investment, Tamil Nadu Urban Development Plan (Third Phase) <strong>TN</strong>UDP III has<br />

been designed. <strong>TN</strong>UDP III is intended to consolidate the achievements of <strong>TN</strong>UDP II, and<br />

continue to improve urban infrastructure services in Tamil Nadu in a sustainable manner.<br />

Similarly, TUFIDCO, a State owned Organization, was incorporated to extend<br />

financial assistance to urban infrastructure schemes in Tamil Nadu. The State<br />

Government has also appointed TUFIDCO as a State level nodal agency for the centrally<br />

sponsored schemes. To ensure focus on total flow of funds through the schemes such as<br />

Jawaharlal Nehru National Urban Renewal Mission Programme, Urban Infrastructure<br />

Development Scheme for Small and Medium Towns, Mega City Programme, Integrated<br />

Development of Small and Medium Towns, Metropolitan Infrastructure Development<br />

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