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Rajasthan becomes the 5th State to complete Urban Local Bodies (ULB) reforms

Topics Covered: 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.

Rajasthan becomes the 5th State to complete Urban Local Bodies (ULB) reforms:


Context:

Rajasthan has become the 5thState in the country to successfully undertake Urban Local Bodies (ULB) reforms.

Rajasthan has joined four other States namely, Andhra Pradesh, Madhya Pradesh, Manipur and Telangana, who have completed ULB reforms.

  • These reforms have been stipulated by the Department of Expenditure, Ministry of Finance.

Implications:

  • Rajasthan has thus become eligible for additional reform linked borrowing.
  • Accordingly, the State has been granted permission by the Department of Expenditure to mobilise additional financial resources of Rs.2,731crore through Open Market Borrowings.

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

  1. The State will notify:
  • Floor rates of property tax in ULBs which are in consonance with the prevailing circle rates (i.e. guideline rates for property transactions) and;
  • Floor rates of user charges in respect of the provision of water-supply, drainage and sewerage which reflect current costs/past inflation.
  1. The State will put in place a system of periodic increase in floor rates of property tax/ user charges in line with price increases.

Besides, the centre had identified four citizen centric areas for reforms. They are:

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

Sources: PIB.