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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.

Urban Local Bodies (ULB) reforms:


Context:

Goa becomes the 6th State to complete Urban Local Bodies (ULB) reforms. Gets additional borrowing permission of Rs. 223 crore.

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

Background:

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

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.