How Autonomous are Urban Local Bodies: World Habitat Day 2023

World Habitat Day

2 October 2023

Dr. Vivek S. Agarwal

Cities are considered to be the future of humanity, but the shrinking resources, increasing population and environment make comprehensive development a serious challenge. To overcome this challenge, everyone will have to make joint efforts. According to a rough estimate, by 2050, about 70% of the world's population will live in cities. Given the current circumstances, this population burden is becoming a serious challenge for urban systems. Unfortunately, everyone is focused on beautification of cities but the basic needs and infrastructure are being neglected.

Today, #World Habitat Day is being organised all over the world on the call of the UN-Habitat (United Nations Human Settlements Programme) . The main theme of this year's event is #Resilient #Urban #Economies: #Cities?as #Drivers of #Growth and #Recovery. It is an accepted fact that cities are the backbone of the economy and development cannot be imagined without urbanisation. Earlier, with the foresight of the increasing burden on cities, President Abdul Kalam had advised to launch a national program to make villages equipped with facilities equal to cities. The need was expressed. Some of them are due to lack of facilities in villages and others being centers of economy, migration is continuously increasing. Therefore, there is a need to explore new possibilities of economic systems in cities.

The year 2023 has been a serious challenge for the urban economy. Never before has the urban economy gone through such a challenging phase, be it the global financial crisis of 2009 or the Covid pandemic of 2020, when production and services came to absolute halt. Apart from this, the urban economy has been growing progressively all the time, but now when the gross economies at the global level are running at a deficit of about two and a half percent, maintaining the urban economy at its level is a serious challenge. Urban economies have a direct impact on the GDP rate.

In the last few decades, instead of giving autonomy to urban governments, they have got more subordination. As the first link of autonomy, local bodies like #Municipal Corporation, #Council or #Municipality, need financial freedom, so that they can raise financial resources as per their need, whether in the form of tax, taking loan. Or by selling their assets. Although local bodies are a part of decentralised governance through 73rd and 74th constitutional amendment, the reality is different. Over the time, in almost all the states, they have been deprived of the rights to impose taxes in the name of financial restructuring, the octroi tax system has got linked with the Grant in Aid or subsidy and made dependent on the financial resources of the states. As a result, income not only became limited but also degenerated from growth. The logic behind the removal of octroi tax was the excessive cost and pilferage in its collection system. Just as revenue has been increased through the use of technology in toll collection etc., work could also be done towards improvement in various revenue sources like Octroi of the city government. House tax was also applicable in some states, which has also been withdrawn. It is a contradiction that according to the Constitution, the right to collect tax or revenue rests with the urban bodies whereas the existing powers have been abolished by the state governments on silly pleas of efficiency, transparency and quality control. At present, except a few states and cities, most of the urban governments have become parasitic rather than autonomous. Not only are the sources of revenue earning under the control of the state governments, the recommendation and permission of the state governments is also binding for taking loans. Due to this, raising loans has also become a task. In this era, apart from the grants provided by the state government to raise financial resources by the local bodies, the only source of income has been the rent or sale of advertising sites, markets, land and public utility facilities. Due to parasitic economy, all development projects also become dependent on the state. In such a situation, serious question marks are raised on the propriety of the elected local government. In many states, in the name of transparency and better prices, rights to purchase services and materials etc. have also been taken away from local governments. The concept of development has again? un-declaredly become centralised. Probably this has become the prevalent system in most of the developing countries at the international level as well.

Keeping this in view, the UN-Habitat (United Nations Human Settlements Programme) has kept the #urban #economy as the main objective for the #WorldHabitatDay on 2 October 2023 so that better development can be achieved by mobilising local resources and cities that have reached their age can be rehabilitated. For this, UN Habitat has released the Rapid Own Source Revenue Analysis #ROSRA Tool Kit (https://unhabitat.org/rosra ) this year, through which #policymakers, #local bodies, can assess their own revenue sources and formulate appropriate policies. It is believed that own revenue sources make urban governments more responsive and answerable to local people and this also increases people-centric services. Own sources are a means of establishing the credibility of urban governments in the market so that larger investment can be solicited for the development of the city. Local policies have better chances of being sustainable, in line with people's needs and aspirations.

Therefore, in view of the challenges facing the current urban economies, there is a need to make local governments financially autonomous so that the targeted #SustainableDevelopmentGoals can be achieved by 2030. Siddhant Agrawal Hardeep Singh Puri Nirmala Sitharaman INSTITUTE OF CHARTERED WASTE MANAGERS ISWA International Solid Waste Association National Institute of Urban Affairs (NIUA) Administrative Staff College of India (ASCI) CA Shivangi Sultania Centre for Development Communication, India Chintan (Environmental Research and Action Group) Kulwant Singh Nirod Baran Mazumdar