Functions and responsibilities of the Union and the States, issues and challenges pertaining to the federal structure, devolution of powers and finances up to local levels and challenges therein

GS-2

URBAN LOCAL BODIES REFORMS

Goa becomes the 6th State to complete Urban Local Bodies (ULB) reforms.

DETAILS:

Goa has become the 6th State in the country to successfully undertake Urban Local Bodies (ULB) reforms stipulated by the Department of Expenditure, Ministry of Finance.
Thus, the State has become eligible to mobilise additional financial resources of Rs. 223 crore through Open Market Borrowings.
Goa has joined five other States namely, Andhra Pradesh, Madhya Pradesh, Manipur, Rajasthan and Telangana, who have completed ULB reforms.

OBJECTIVES/NEED FOR REFORMS:

Reforms in the Urban Local Bodies and the urban utilities reforms are aimed at financial strengthening of ULBs in the states and to enable them to provide better public health and sanitation services. Economically rejuvenated ULBs will also be able to create good civic infrastructure.
The reforms stipulated by the Department of Expenditure to achieve these objectives are:
The State will notify –
Floor rates of property tax in ULBs which are in consonance with the prevailing circle rates (i.e. guideline rates for property transactions)
Floor rates of user charges in respect of the provision of water-supply, drainage and sewerage which reflect current costs/past inflation.
The state will put in place a system of periodic increase in floor rates of property tax/user charges in line with price increases.

BACKGROUND:

To meet the challenges posed by the pandemic, GOI had enhanced the borrowing limit of the states by 2 percent of their GSDP.
Half of this special dispensation was linked to undertaking citizen centric reforms by the states.

The four citizen centric areas for reforms identified were: