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Economic
Development Policy |
| URBAN
DEVELOPMENT |
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MODE
OF FUNDING
The
agencies involved with urban development are largely dependent for
their resources on the State Government and market borrowings, as
their own revenues are grossly inadequate. The Housing Board is
the most self reliant, raising about 70% of it through loans from
financial institutions, with internal resources and budgetary
support filling the gap. The internal resources are mobilised
through disposal of developed plots and built flats, commercial
properties, etc. Development Authorities also fund their
activities through mechanisms similar to the Housing Board.
Slum Improvement Programmes are entirely funded by the Government
through schemes like SJSRY, EIUS, Nehru Rojgar Yojana (NRY), etc.
Contributions from the Centre are matched proportionately by the
State Government in the ratios of 75:25, 70:30, etc.
FINANCES
OF URBAN LOCAL BODIES
Urban
Local bodies are able to raise part of their resources through
various tax and non-tax measures while the balance is funded
through shared taxes, grants and loans from the government.
|
| Municipal
Taxation Powers in Madhya Prades |
|
Compulsory
|
Discretionary
|
|
Property
tax
Water
Tax
General
Sanitary Cess
General
Lighting Tax
General
Fire Tax
Local
Body tax
|
|
|
Property
tax is the major generator of own revenues for urban local bodies.
Of late, property tax rates and procedures have been revised with
the creation of autonomous regional valuation cells, introduction
of a self-assessment of property by the owners based on stipulated
guidelines and penalties for evasion and under valuation. This
reform is expected to significantly improve the revenue
collections of ULBs as it has successfully done in Patna and
Andhra Pradesh.
Amongst
the assigned and shared taxes, the bulk comes from entry tax,
which was introduced after the abolition of octroi in 1976, and
passenger tax. These taxes have failed to match the buoyancy and
ability of octroi to generate own revenues for ULBs, resulting in
increasing mismatch between municipal revenues and expenditures
today.
The
finances of ULBs in undivided Madhya Pradesh have been summarised
in Table 10.5. The major area of concern is that across all the
three categories of ULBs, the share of own revenues in total
revenues has reduced drastically. Collections from tax & non-tax revenues have been quite
erratic, but by and large, own revenues contributed 25%, assigned
taxes - 63%, with grants & untied transfers providing the
balance - 11%. The growth rates of both total and own revenues are
also not in parity with those of revenue expenditure.
|
|
Summary
of the finances of Urban Local Bodies in Madhya Pradesh
1990-91 to 97-98 |
|
|
Nagar
Panchayats
|
Municipalities
|
Corporations
|
|
Nos.
|
283
|
103
|
18
|
|
Avg.
annual total revenue per LB
|
|
Increased
from 50.6 lakhs to 1.09 Cr.
|
Increased
from 8.58 Cr. to 16.25 Cr.
|
|
Avg.
own revenue gen. per LB
|
Increased
from 3.54 lakhs to 3.86 lakhs
|
Increased
from 17.28 lakhs to 31.52 lakhs
|
Increased
from 4.54 Cr. to 5.82 Cr.
|
|
Own
Revenue to Total Revenue
|
From
32% reduced to about 13%
|
From
38% reduced to about 29%
|
From
53% reduced
to about 36%
|
|
|
From
47% reduced to about 40%
|
From
42 % reduced to 34 %
|
Between
50 - 52 %
|
|
Own
Revenue to Total Rev. Exp.
|
|
From
34% reduced to 23%
|
From
47% reduced to 26%
|
|
CAGR
of total Revenues
|
15.13
%
|
13.44
%
|
9.55
%
|
|
CAGR
of own Revenues
|
1.6
%
|
8.96
%
|
3.62
%
|
|
CAGR
of Revenue Exp.
|
16.87
%
|
15.3
%
|
12.65
%
|
|
Deficit
|
Varied
between surplus of 3 Cr. to deficit of 21 lakhs
|
Varied
between surplus of 2.97 Cr. to a deficit of about 28 Cr.
|
Deficit
up from 18 Cr. to 106 Cr.
|
CAGR
– Compounded Annual Growth Rate
Source: SFC
Report for Urban Local Bodies in MP (April 1996 to May
2001), NIPFP and Feedback Analysis) |
|
|
Composition
of Revenue Expenditure in selected states for (1997- 98) |
|
States
|
%
of total revenue expenditure
|
|
|
Wages&
salaries
|
O&M
|
Interest
& debt
|
Others
|
|
Andhra
Pradesh
|
49.21
|
49.60
|
0.24
|
0.95
|
|
Assam
|
42.43
|
54.14
|
1.90
|
1.53
|
|
Gujarat
|
53.20
|
30.02
|
6.30
|
10.48
|
|
Haryana
|
48.76
|
44.49
|
0.00
|
6.75
|
|
Karnataka
|
20.93
|
78.11
|
0.48
|
0.48
|
|
Madhya
Pradesh
|
51.01
|
37.67
|
0.61
|
10.71
|
|
Maharashtra
|
61.50
|
13.29
|
9.89
|
15.31
|
|
Tamil
Nadu
|
49.13
|
47.49
|
2.53
|
0.86
|
|
Uttar
Pradesh
|
69.18
|
29.62
|
0.00
|
1.20
|
|
Himachal
Pradesh
|
46.98
|
52.32
|
0.00
|
0.71
|
|
Average
(for 20 States)
|
60.32
|
20.00
|
7.17
|
12.51
|
| Source:
NIPFP (2000) as quoted in the India Infrastructure Report
2000. |
|
|
The
figures in
Table
show that though MP lies in the middle in
terms of salaries & wages, the component of other
expenditure is quite high. States which been able to control their
expenditure on salaries and others have been able to spend almost
50% or more on their O & M.
|
|
Per
Capita Revenue Expenditure on Core Services in 1997- 98 (in
Rs.) |
|
States
|
Water
Supply
|
Sewerage
& drainage
|
Conservancy
& sanitation
|
Municipal
Road
|
Street
Lighting
|
All
Functions
|
|
Andhra
Pradesh
|
50.52
|
55.12
|
63.37
|
102.53
|
13.19
|
313.38
|
|
Gujarat
|
60.40
|
44.28
|
119.37
|
52.23
|
29.76
|
438.21
|
|
Haryana
|
191.84
|
89.99
|
108.56
|
57.77
|
30.74
|
598.22
|
|
Karnataka
|
62.56
|
42.91
|
74.19
|
46.46
|
25.92
|
321.05
|
|
Madhya
Pradesh
|
79.44
|
31.92
|
37.10
|
27.19
|
13.16
|
322.74
|
|
Maharashtra
|
230.00
|
155.58
|
195.87
|
117.35
|
43.08
|
1750.50
|
|
Punjab
|
95.38
|
109.70
|
118.44
|
48.67
|
23.35
|
542.81
|
|
Tamil
Nadu
|
45.92
|
13.39
|
111.86
|
56.13
|
23.25
|
331.46
|
|
Uttar
Pradesh
|
16.48
|
5.41
|
112.10
|
34.64
|
9.52
|
223.23
|
|
West
Bengal
|
60.01
|
41.58
|
119.48
|
63.71
|
13.72
|
522.83
|
|
Himachal
Pradesh
|
89.57
|
36.67
|
251.76
|
304.90
|
15.62
|
1112.85
|
|
Total
(19 States)
|
125.77
|
93.21
|
123.36
|
70.19
|
23.28
|
747.02
|
| Source:
NIPFP (2000) as quoted in the India Infrastructure Report
2000 |
|
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