MINISTER OF URBAN DEVELOPMENT & POVERTY ALLEVIATION ( SHRI JAGMOHAN )
(a)to(e): A Statement is laid on the Table of the Sabha.
STATEMENT REFERRED TO IN REPLY TO LOK SABHA STARRED QUESTION
NO.134 FOR 31.7.2001, REGARDING CHANGES IN PLANNING AND RESOURCE
MOBILISATION.
(a)to(c):The Constitution 74th Amendment Act 1992 has brought in
a third tier in the system of governance by constitutionally
recognising the Municipalities as institutions of self
government for urban governance. Under Article 243-W of
Constitution 74th Amendment Act, 1992 Legislature of a State
may, by law endow the municipalities with such powers and
authority as may be necessary to enable them to function as
institutions of self government and such law may contain
provisions for the devolution of powers and responsibilities
upon Municipalities, subject to such conditions as may be
specified therein, with respect to the preparation of plans for
economic development and social justice. Article 243 ZD and 243
ZE of the 74th Amendment provides constitution of District
Planning Committee and Metropolitan Planning Committee for every
metropolitan area respectively.
As per Entry 5 of the State List II under VIIth Schedule
of the Constitution, Local Government, including Municipal
Corporations, Improvement Trusts etc., is a State subject. In
view of this, it is for State Governments to take necessary
steps to make requisite changes in planning and resource
mobilisation to meet the challenge of urbanisation and also to
take steps to improve financial position of Urban Local Bodies.
The Constitution 74th(Amendment) Act, 1992 already provides for
devolution of adequate functional and financial powers to Urban
Local Bodies to enable them to function as an effective
institution of Local Self Government. All State Governments
have made necessary changes in the concerned municipal laws to
devolve the functional and financial powers to Urban Local
Bodies. Many of the State Finance Commissions set up by the
State Governments have made recommendations for transferring
adequate finances to Urban Local Bodies and also to bring
certain changes in the existing tax structure.
The Union Government has planned the following steps to
strengthen the financial position of the urban local bodies:
1. PROPERTY TAX REFORMS:- Guidelines were issued by this
Ministry in 1998 for property tax reforms to all State
Governments with the objective of simplification and
rationalisation of property tax. These measures are in the
process of implementation by a number of States like Bihar,
Madhya Pradesh, Gujarat, Tamil Nadu, Uttar Pradesh and
Karnataka.
2. LEVY OF TAXES AND USER CHARGES:- The issue of levying of
user charges and taxes was one of the items deliberated upon by
the Central Council of Local Government and Urban Development
held on 18.5.1999. Keeping in view the importance of taxes and
user charges in the municipal revenue the Council recommended
that:
(i) State Government should give greater autonomy to urban
local bodies in fixation of tax rates, user charges etc.
(ii) Revision of tax rates, user charges should be done
periodically atleast once in 3 years.
3. FISCAL CONCESSION FOR ATTRACTING INVESTMENT IN URBAN
INFRASTRUCTURE:
A number of fiscal concessions were provided in Finance
Act, 2000 to attract increased investments in urban
infrastructure.
4. MUNICIPAL ACCOUNTING REFORMS:- The present municipal
accounting reforms do not provide enough information for
enlisting the financial performance and status of urban local
bodies. It is, therefore, felt that a double entry accrual
based system which enable the preparation of a reliable detailed
financial statements subject to check and balance, needs to be
introduced. Technical Guidelines on accounting and financial
reporting by urban local bodies was brought out by the Institute
of Chartered Accountant of India (ICAI) in October 2000. Since
the responsibility for exercising control and supervision over
the proper maintenance of accounts and their audit of all ULBs
has devolved on the Comptroller & Auditor General (C&AG), in
pursuance to the recommendations of the Eleventh Finance
Commission, the Technical Guidelines brought out by the ICAI has
been forwarded to C&AG for approval, after which the same will
be circulated to all ULBs.
5. TAX FREE MUNICIPAL BONDS:- The Central Government inserted a
new sub section 10(15)vii in the Income Tax Act 1961 to provide
that any income as interest on bonds issued by a local authority
and specified by a notification in the official gazette will be
exempted from income tax. Guidelines were issued on 8.2.2001
for regulating the issue of tax free municipal bonds.
6. FOREIGN DIRECT INVESTMENT:- In line with the Government`s
policy declaration of 2000 for increased foreign direct
investment in manufacturing sector, urban infrastructure
facilities are open to FDI both under FIPB and the automatic
route as per the sector specific guidelines.
(d)&(e): As per the Planning Commission`s estimates 32.36%
persons were living below poverty line in urban areas in the
year 1993-94.
The Ministry of Urban Development and Poverty Alleviation
has been implementing `Swarna Jayanti Shahari Rojgar Yojana
(SJSRY)` an urban poverty alleviation Centrally Sponsored Scheme
with effect from 01.12.1997 through the States/Union Territories
to provide gainful employment to the urban unemployed or
underemployed poor
(i) through encouraging the setting up of
self-employment ventures by those who have read upto 9th
standard and
(ii) through provision of wage employment for
construction of socially and economically useful public assets.
The SJSRY is funded on the 75:25 basis between Centre and the
States. From 01.12.1997 to 31.03.2001, Rs.461 crores have been
released to the States/UTs under this Programme. Under Urban
Self Employment Programme 344186 persons have been assisted to
set up their micro enterprises and also, 379.33 lakhs number of
mandays of work have been generated under the Urban Wage
Employment Programme of SJSRY upto 31.03.2001.
