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Economic
Development Policy |
| URBAN
DEVELOPMENT |
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URBAN LAND
MANAGEMENT
The Urban Land Ceiling and Regulation Act, 1976 was repealed in
February, 2000. This is expected to release large quantums of land
in urban areas, which were hitherto locked up in unending
litigations. Consequently, expensive urban lands that were only
reachable by the upper class have now become more accessible to
people from other classes as well. Residential as well as
commercial activities have also gained momentum as a result of
this.
To encourage industrial growth and remove the obstacles that
hamper the process of such development, the state administration
has adopted a single window policy. To implement this, simplified
and time saving procedures have been initiated by the revenue
department. Amendments have been made in the MP Land Revenue Code
relating to the request for transfer of land by an applicant. If
land is not allocated within two months after application, and one
month even after being intimated by the applicant, the land will
be assumed to be transferred without any objection through a
Deemed Approval procedure.
The revenue department has allocated land for industrial areas
where the Department of Industries will carry out the necessary
developments and will directly make land available for the
establishment of industries. This has been done to provide all
possible support to the industrialists for establishing their
units in developed areas and without any
hassles.
To provide facilities for recreational activities, the
administration has formulated schemes for land allocation for
establishment of multiplex complexes in four major cities of the
state. Provisions have also been made to allot the land for these
complexes at discounted rate.
PRIVATISATION
OF
INFRASTRUCTURE
Given
the resource constraints, the Government has acknowledged that maintenance
and development of urban areas is not possible in an effective
manner without people’s participation and cooperation of the
private sector. Madhya
Pradesh has been one of the first states to develop roads and
initiate water supply projects with private involvement on BOT
basis. The learnings from these experiences should enable the
formulation of replicable structures and procedures for private
participation in development of new assets as well as for
operation & maintenance of existing facilities.
The
state Government has recently constituted an
Urban Infrastructure Development Fund with the objective of
encouraging private investment in urban infrastructure through repayment
guarantees.
The
common urban infrastructure sectors that are amenable to privatisation
include:
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Integrated
Land Development housing
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Water supply and Sanitation
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City by passes, parking complexes, bus terminals
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Social
and recreational facilities
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Some
of these stand-alone projects may not be financially viable by
themselves and may require to be clubbed together across sectors to make
them more remunerative.
Operation
and Maintenance (O&M) of utility services
City
governments are approaching the private sector not only for infusion of
financial resources, but also to bring in operational efficiency, which
is lacking in most government managed facilities. The operation &
maintenance of urban utility services have been successfully contracted
out to private agencies in a many cities in the country. e.g. Greater
NOIDA, Rajkot, Navi Mumbai, Bangalore, Chennai, etc.
The
success of these experiences suggest that similar contracts may be tried
out in the urban areas of Madhya Pradesh, for O&M of
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water
supply, sewerage- drainage pumping stations, treatment plants, etc.
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solid
waste collection, treatment & disposal,
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roads
& street lighting
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recreational
areas, parking lots, etc.
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collection
of various taxes, user charges, etc.
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The
state of urban solid waste disposal is very unsatisfactory. The
municipal bodies are not in a position to fulfill this responsibility
completely with the resources at their command. It is therefore
necessary that major initiatives should be taken to attract the private
participation in this field. In this respect, installations of the
plants for conversion of the solid waste into the organic fertiliser can
be considered for allotment of land by the municipal bodies at
the concessional rates on the basis of the following guidelines :
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The
land would be made available by the municipal bodies.
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It
would be rented at a minimum rate of Re. 1/- per sq. mtr. per year.
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The
minimum
royalty charged by the municipal bodies would be 4%.
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The
land allotted for installation of the plant would be automatically be
returned to the concerned municipal body on change in the use of the
land or closure of the plant.
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URBAN
TRANSPORT
Urban
public transport is the basic necessity of the cities, especially the
big ones. This is one area where successful participation of the private
sector can be very well ensured. The municipal bodies can earn
sufficient income from this service to also maintain roads and to
improve the parking facilities in the cities. Further plans for
implementation in this respect would be made by the Department of
Transport in consultation with the Department of Urban
Administration and Development. The plans would address the issues of
participation of the municipal bodies in the public transport system and
earning of income from them
Urban
Housing
Housing
has traditionally been a private activity, though the government does
have a significant role to play.
The
following policy measures are proposed for ensuring proper development
of housing and access to all sections of society are as follows:
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Presently
the colonisers are under obligation to reserve 15% land for the weaker
sections. It is, instead, suggested that 15% of the cost of the
developed land should be deposited with the M.P. Housing Board which
should be kept in a separate account and be utilised for building low
cost houses for the weaker sections by the board. This would enhance
availability of housing to the weaker sections.
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Partnerships
of the cooperative societies should be encouraged by simplifying
procedures for constitution of such partnerships.
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A
task force may be constituted to prepare the proposal for reorganisation
of the Madhya Pradesh Housing Board to bring about more flexibility in
its working, to ensure development of the joint sector and to realise
the recommendations of the Asian Development Bank. Its composition would
be as under.
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Principal
Secretary, Housing & Environment
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Chairman
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Secretary,
Finance
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Member
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The
Regional Head, HUDCO
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Member
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Commissioner/Joint
Director, Town & Country Planning
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Member
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Commissioner,
Housing
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Member Secretary
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One
expert to be inducted. |
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Article
52(1) of the Madhya Pradesh Town and Country Planning Act 1973 should be
supplemented with “The development scheme of an area more than 30% of
the area proposed for development in an approved development
scheme can not be considered under Article 50 by the local
authority”. |
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Amongst
the cities of Madhya Pradesh, housing problem is the most severe at
Indore which has rapidly developed as the state’s main industrial and
commercial center. A
Special Economic Zone is proposed to be established at Pithampur near
Indore in future which would create an additional
demand for housing in the city.
The main reason for the housing shortage is non-availability of
undisputed land in the city. Due to delay in acquisition of land by the
Indore Development Authority for the notified housing schemes, or due to
lack of timely development of the acquired land, the market for the
housing land has been badly affected. It is therefore most important
that easy availability of the housing land be ensured to find solution
to the problem. In this connection, the schemes of the housing
development board should be given priority.
Lack of the basic
amenities in the slums is a big problem of the cities. There are about
5800 slums in the state which constitute one third of the urban
population. The government would make efforts in a phased manner to
provide the basic amenities like drinking water, cleaning, roads,
gutters, lights, etc. Efforts would be made to acquire resources from
the government of India, the state government and the financial
institutions.
MOBILISATION
of Financial Resources
The
main responsibilities of the municipal bodies include supply of drinking
water, disposal of liquid and solid wastes, maintenance of the roads,
gardens, and security and care of the public places. Presently, only a
very small portion of the total expenditure on the said works is
obtained by the municipal bodies as income. Keeping in view the
disparity between income and expenditure of the municipal bodies, it is
necessary to fix proper service charges to ensure generation of
sufficient resources for proper maintenance and extension of the civic
facilities provided to the people. The municipal bodies would be
encouraged to initiate necessary moves in this respect.
The
autonomy of the ULBs would be meaningful only if they are financially
strong. Even though the ULBs of Madhya Pradesh have been empowered with
sufficient powers to levy taxes, they continue to largely depend on
state assistance. Required
steps would be initiated to gradually reduce and ultimately terminate
this dependency and adequate sources for levying indirect taxes would be
identified. In this connection the models of Maharashtra and Gujarat
would be studied and a decision would be taken after extensive
consultations at various levels regarding sources for indirect taxes and
empowering the big cities (municipal corporations) to levy entry tax in
a modified form.
The
establishment expenditure of many municipal institutions is so large
that greater part of their income is spent on their maintenance and no
resources are left for developmental work.
In such cases, efforts would be made to optimise and retrain the
workers/employees, and a mandatory ceiling would introduced on the
percentage of their income that can be spent by ULBs on establishment.
Necessary training of the employees would be arranged with the
assistance of the Madhya Pradesh Academy of Administration and Indian
Institute of Local Self-government.
Diversion
Tax – Self Assessment
The
income tax department and ULBs have implemented the process of Self
Assessment for collection of income tax and property tax. This process
has shown remarkable growth in the earnings of ULBs. The Government is
now considering simplification of the process of collection of Diversion
tax and introducing the self assessment format. It is expected that this
procedure will not only remove the unnecessary procedural obstacles but
also increase the revenue earnings for the administration.
Urban
Infrastructure Development Fund (UIDF)
The Government of Madhya Pradesh has recently constituted an Urban
Infrastructure Development Fund. It is proposed that private investment
in development of urban infrastructure could be encouraged offering
repayment guarantees by the fund. Necessary policy measures would be
taken to allow for voluntary contributions by the municipal bodies into
the fund.
IMPROVED
Fiscal MANAGEMENT for ULBs
The
ability to raise resources directly depends to a very large extent on
the management and judicious spending of scarce resources. The ULBs need
to improve their procedures and systems in the following activities in
order to develop as strong,
self-sufficient institutions dedicated to the service of their citizens.
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Accounting
& Auditing
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Budgeting
for Capital and Revenue Expenditure
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Billing
& collection of taxes, user charges, fees, etc. |
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Accountability in utilisation of funds
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The
present single-entry accounting system in the municipal institutions is
no longer suitable for modern financial management practices. This would
be changed to introduce the double-entry,
accrual based book-keeping system that enables the
preparation of reliable detailed financial statements subject to checks
and balances, thereby presenting appropriate information to funding
agencies on the financial position and performance of ULBs. This system
has been successfully introduced in the ULBs of Tamil Nadu. Necessary
arrangements would be made to train the employees in this new system. In the first phase, these changes would be introduced in the
Municipal Corporations and on the basis of the experience gained, be
gradually extended to the municipalities and nagar panchayats.
Even though granting of subsidies is a policy matter, transparency and
clear budgetary allocations is a necessity. As part of accountability
the ULBs may consider introducing a system of annually disclosing the
subsidies under various schemes given in the previous year to the
general public. The broad items that should be covered are:
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The extent of the subsidy
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The source of funds from where it was met
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The sectors / categories of people who were the beneficiaries
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This would help in ensuring greater transparency in financial operations
of the municipal bodies.
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