Andhra Pradesh, Madhya Pradesh and Telangana are other three states which have undertaken 'Urban Local Bodies (ULB)' reforms stipulated by the Department of Expenditure, Ministry of Finance.
Manipur has become the fourth state to complete urban local bodies reforms and consequently received the Union Finance Ministry’s approval for additional borrowing of Rs 75 crore.
Andhra Pradesh, Madhya Pradesh and Telangana are other three states which have undertaken ‘Urban Local Bodies (ULB)’ reforms stipulated by the Department of Expenditure, Ministry of Finance.
With the completion of the reform, Manipur has become eligible to mobilise additional financial resources of Rs 75 crore through open market borrowings, and permission for the same was issued by the Department of Expenditure on January 11, 2021, the Finance Ministry said in a statement on Tuesday.
On completion of the urban local body reforms, the three states have been granted additional borrowing permission of Rs 7,481 crore, it said.
Reforms in the urban local bodies and urban utilities are aimed at financial strengthening of ULBs (Urban Local Bodies) in a state and to enable them to provide better public health and sanitation services. Also, economically-rejuvenated ULBs will be able to create a good civic infrastructure, the statement added.
The reforms stipulated include the state concerned notifying floor rates of property tax in ULBs – which are in consonance with the prevailing circle rates, and floor rates of user charges in respect of the provision of water supply, drainage and sewerage that reflect current costs or past inflation.
In view of the resource required to meet the challenges posed by the COVID-19 pandemic, the central government on May 17, 2020, as part of the Atmanirbhar Bharat package enhanced the borrowing limit of states by 2 per cent of their gross state domestic product (GSDP).
Half of this special dispensation was linked to undertaking citizen-centric reforms by the states, the statement said, adding that the states get permission to raise additional funds equivalent to 0.25 per cent of GSDP on completion of reforms in each sector.
The four citizen-centric areas identified for reforms were the implementation of One Nation One Ration Card System, ease of doing business reform, ULB/utility reforms and power sector reforms, the ministry said.
So far, 10 states have implemented the One Nation One Ration Card System, 7 states have done ease of doing business reforms, and 4 states have done local body reforms.
Total additional borrowing permission issued so far to the states that have done the reforms stands at Rs 54,265 crore, as per the statement.