Evolution of Local Government,
its Legal and Political Background
Local government institutions have always existed in India in
one form or another since ancient times. The present form of urban
local government owes its genesis to the British rule. The initiation
began with Samuel Laing, member of the Viceroy's Council, in the
Budget Speech (1861-62) proposing that local services should be
based on local resources. Lord Mayo's Resolution of 1870 introduced
the concept of elected representatives in the municipalities.
Lord Ripon is considered the founding father of urban local government
as he implanted the concept of municipal authorities as units
of self-government. His Resolution of 18 May 1882 on local self-government
dealt with the constitution of local bodies, their functions,
finances and powers and laid the foundation of local self-government
in modern India. Local self-government played an important role
in the Independence Movement. After Independence, the Constitution
of India was framed on federal principles. Indian Constitution
makers divided the government functions in three lists: Federal,
State and Concurrent. Local government bodies are covered in the
State List and are governed by the State Statutes or in the case
of Union Territories by the Union Parliament.
Recent years have witnessed an increasing interest and a growing
consciousness of the need and importance of local self-government
as provider of services to the local community as well as an instrument
of democratic self-government. Local government is an integral
part of the national government structure, the level of government
closest to the citizens and in the best position both to involve
them in the decision making process of improving their living
conditions and to make use of their knowledge and capabilities
in the promotion of all round development. There are two types
of local government: urban local government and rural local government.
Until recently, urban local government was manifested in Municipal
Corporations, Municipal Councils, Town Area Committees and Notified
Area Committees. However, the Seventy-Fourth Constitution Amendment
Act adopted in 1992 proposes to form a uniform structure of Municipal
Corporations, Municipal Councils and Nagar Panchayats
in transitional areas. Rural local government operates through
Zilla Panchayats (Parishads), Taluka Panchayats
and Village Panchayats.
Figure 1. Political Structure at the National
Level
Figure 2. Political Structure at the State Level
Figure 3. National, State and Local Planning
Local government bodies
Urban local bodies are supposed to be formed as democratic institutions
based on the principle of self-government and should represent
people's desires and strengths. Due to massive urban growth during
the past two decades, the urban quality of life has deteriorated
and creates an urgent necessity for having vibrant and efficient
urban local government bodies that can deliver adequate services
and improve living conditions.
Evolution
Urban local government bodies are synonymous with municipal government
have a long history. Municipal bodies are the creation of the
British. The first such body called a Municipal Corporation was
set up in the former Presidency town of Madras in 1688 and was
followed by the establishment of similar corporations in Bombay
and Calcutta in 1762. Lord Mayo's Resolution of 1870 encouraged
the introduction of an elected President in the municipalities.
However in their present form and structure, the municipal bodies
owe their existence to Lord Ripon's Resolution on local self-government,
adopted on 18 May 1882.
Since then the structure of municipal bodies has remained by
and large the same even though the number of urban areas has increased
and their problems have become more and more complex. There are
two kinds of statutory provisions creating a municipal authority.
Either the statute itself may establish a municipal authority,
like the Bombay Municipal Corporation Act (1888), the City of
Nagpur Corporation Act (1948) and the Delhi Municipal Corporation
Act (1957). Or it may empower the State Government concerned to
create a Municipal Corporation (Municipality, Municipal Authority,
Municipal Council or Municipal Board) such as the Bombay Provincial
Municipal Corporations Act (1949) and the Gujarat Municipalities
Act (1964). The extent of the municipality's power as well as
the extent of government control over a Municipality/Municipal
Council depends on the statute enacted for its creation. Presently,
the statutes confer wider controlling and supervisory powers on
the state government. This is due to two reasons: firstly, the
Constitution does not demarcate the power and the duties of the
municipal authorities and secondly in the absence of any clear-cut
demarcation, it is obvious that state governments control municipal
authorities.
In view with the problems faced by urban local government bodies,
the Rural-Urban Relationship Committee set up by the Government
of India in 1963, pointed out that local government can no longer
remain merely instruments of political education and civic conscience.
Instead they have to become institutions for the promotion of
social and economic development of local communities as well as
an integral part of the National Government. The Committee also
made significant recommendations on various aspects of local government
like the criteria for constitution of municipal bodies with the
need for a clear delineation of powers, functions and resources
of urban bodies. As far as the municipal government was concerned,
it was assumed to be a State Function. Entry 5 of the State list
in the Seventh Schedule of the Constitution of India gives legislative
power to the State with regards to municipal laws, establishments,
constitution and powers of local governments. Except for recognizing
local self-government as an essential part of the system of Government,
the Constitution does not confer any independent status or powers
to local government bodies. The newly introduced Seventy-Fourth
Constitutional Amendment Act (CAA) of 1992, has acted upon the
recommendations of the Rural-Urban Relationship Committee and
seeks to provide more power and authority to urban local bodies.
It is the first serious attempt to ensure stabilization of democratic
municipal government through constitutional provisions. The Constitutional
Amendment Act seeks to introduce fundamental changes in the 3,000
urban local bodies presently existing. Its features are:
Introduction of the Twelfth Schedule
which lists the functions of the urban local bodies, covering
planning, regulation and developmental aspects;
Establishment of District and Metropolitan
Planning responsible for the election of representatives for
the preparation of development plans at district and metropolitan
levels;
Proposed establishment of ward committees
in areas having a population of over three hundred thousand;
Specification by law of the powers and
responsibilities entrusted to municipalities and ward committees;
Holding of periodical and timely elections;
if a municipality is dissolved for any reason it should be reconstituted
within 6 months;
Specifying by law the sources of municipal
finance and their periodic review by a statutorily constituted
State Finance Commission and by making it obligatory on the
part of the Central Finance Commission to recommend measures
needed to augment state resources to assist the municipal governments;
Restrictions on the power of state governments
to do away with democratically elected municipal governments;
Reservation of one-third of seats for
women and weaker sections in municipal bodies; for minorities
there are no reservations.
The CAA envisages enabling people to participate in development
processes at ward, municipal, district and metropolitan regional
level. The empirical evidence of such optimism could be realized
only after the incorporation of the CAA in the existing Municipal
Acts.
Figure 4. Twelfth Schedule of the Seventy-Fourth
Constitutional Amendment Act (1992)
Urban planning, including town planning
Regulation of land use and construction of buildings
Planning for economic and social development
Roads and bridges
Water supply for domestic, industrial and commercial purposes
Public health, sanitation conservancy and solid waste management
Fire services
Urban forestry, protection of environment and promotion of
ecological aspects
Safeguarding the interests of weaker sections of society,
including the disabled and mentally retarded
Slum improvement and upgrading
Urban poverty alleviation
Provision of urban amenities and facilities such as parks,
gardens playgrounds
Promotion of cultural, educational and aesthetic aspects
Burials and burial grounds, cremations, cremation grounds
and electric crematoriums
Cattle pounds; prevention of cruelty to animals
Vital statistics including registration of births and deaths
Public amenities including street lighting, parking lots,
bus stops and public conveniences
Regulation of slaughter houses and tanneries
The State Governments need to adopt the Seventy-Fourth Constitutional
Amendment Act with reference to their respective municipal bodies.
A case of the State Madhya Pradesh may provide an appropriate
example. After the passing of the Seventy-Fourth Constitutional
Amendment Act, the local body acts of Madhya Pradesh were amended
and the provisions contained in the constitutional amendment were
incorporated in those acts. Subsequently, a number of workshops
were organized. A workshop for Mayors, Deputy Mayors, Municipal
Commissioners and Opposition Leaders came up with a number of
suggestions and was followed by workshops for Presidents and Vice-Presidents
of all municipalities and Nagar Panchayats. In the final
round, 45 workshops for 45 districts for the councilors of all
municipalities and Nagar Panchayats were organized to
ascertain their suggestions regarding the amendments in the above-mentioned
acts. These workshops gave valuable suggestions and recommendations
for amending the local body acts. All these workshops culminated
into an amendment of the Madhya Pradesh Municipal Corporations
Act (1956) and Madhya Pradesh Municipalities Act (1961) on 21st
April 1997.
Election and term of a Mayor
In the earlier act, a Mayor was elected by the elected councilors
of the municipal corporation. The new amendment provides that
a Mayor shall be elected by direct election from the municipal
area and that his term be raised from two and a half to five years.
Election expenses
The provisions regarding maintenance of election expenses and
lodging of account of election expenses were not very clear in
the earlier amendment. It has now been made mandatory for every
candidate to keep a separate and correct account of all the expenditure
incurred during election and submit it within thirty days to the
State Election Commission. Failure to lodge a true account of
expenses may result in disqualification of the candidate for a
period of five years from the date of the order.
No confidence motion
A motion of no confidence cannot be moved against the speaker
or Mayor within a period of two years from the date on which he
or she enters office. Similarly, such a motion cannot be moved
if the remaining period of a corporation is less than six months.
A motion of no confidence needs a majority of two thirds of the
elected councilors present and voting if such a majority is more
than half of the total number of elected councilors. However,
as far as a motion of no confidence against the Mayor is concerned,
such a motion needs a majority of more than three fourths of the
elected councilors, i.e. more than two thirds of the total number
of elected councilors.
Local Government
Categories and Hierarchies
Municipal structure
The structure and composition of the municipalities vary widely.
There is generally no accepted set of criteria with reference
to urban agglomerations resulting in wide differences of definitions
and structures between states.
The CAA sought to bring some uniformity in the constitution of
the municipal bodies by classifying them as follows:
Nagar Panchayat,
to be constituted in rural-urban transition areas. These have
been conceived to properly channelize the growth impulses in
such settlements and also to bring some sort of order in their
growth and provision of service;
Municipal Councils for smaller urban
areas;
Municipal Corporations for larger urban
areas.
Urban local government is not hierarchical. However, the Municipal
Corporation, as an institution, enjoys a greater measure of autonomy
than other forms of local government. It enjoys the power of dealing
directly with the state government whereas the municipalities
have no direct access to the state government and are answerable
to the District Collector and Divisional Commissioner.
Municipalities and Corporations have deliberative and executive
wings. In general, deliberative wings of Municipal Corporations
comprise the Corporation Council, the Standing Committee and the
Mayor, whereas the executive wings comprise the Municipal Commissioner,
the Deputy/Assistant Municipal Commissioner, the Municipal Engineer
and subordinate administrative staff.
Deliberative wing
This is the General Body of the Municipal Corporation, comprising
of elected members (councilors). Councilors are people's representatives
and thus articulate the wishes of the population. The council
is elected for a term varying between three and five years. The
new Constitutional Amendment Act provides that every Municipal
Corporation and every Municipal Council shall have the following
two categories of councilors:
Directly elected councilors;
Nominated councilors.
The number of elected councilors is to vary according to the
size of the population of the territorial area of the Municipal
Corporation or the Municipal Council concerned. Nominated councilors
are to be nominated by the elected councilors of the Municipal
Corporations/Councils concerned. The nominated councilors shall
be persons having special knowledge or experience in municipal
administration.
Mayor
The Mayor in the Municipal Corporation is a representative elected
by the councilors from amongst themselves for a term of one year,
which is renewable. The Mayor exercises administrative control
over the secretariat of the corporation. Furthermore, some statutes
specifically empower him, in case of an emergency, to direct the
execution or stoppage of any work or any act. The Mayor in India
is bereft of any executive authority. The indirect election of
the Mayor combined with his short one-year tenure makes him more
a figurehead than an active functionary.
Calcutta model
The Mayor-in-Council form of city governance grew out of local
government idealism with a view to making city government really
local self-governing fully responsible and accountable to the
people. It can better be described as Cabinet government that
replicates the political system as it operates at the state and
central levels. It supports union or integration with a cabinet
in the form of the Mayor-in-Council drawn from the Corporation
or Council and accountable and responsible to it. The system therefore
provides the much-needed plural, political leadership, coordination
of policy and administration and a clear focus of responsibility.
Committees
Various Statutory and Non-Statutory Committees that are set up
by the council do most of the work of the corporation. A Statutory
Committee is set up by the statute which constitutes the Corporation,
such as executive committee, standing committee, planning committee,
health committee and education committee. Non-Statutory Committees
include transport committee, women and child welfare committee
etc. The number and composition of the committees vary from state
to state. The most important committee, both regarding power and
range of functions allotted is the Standing Committee of the Corporation.
It acts as the steering committee exercizing executive, supervisory,
financial and personnel power. The Standing Committee consists
of elected members varying between seven and sixteen through a
system of proportional representation of councilors.
Executive wing
The Municipal Commissioner is the chief Executive Officer and
head of the executive wing of the Municipal Corporation. All executive
powers are vested in the Municipal Commissioner. Although the
Municipal Corporation is the legislative body laying down policies
for civic governance of the city, it is the Commissioner who is
responsible for execution of the policies. The Commissioner is
appointed for a fixed term that is mentioned in the respective
state's statutes. However, his tenure in a corporation may get
either extended or reduced. The Commissioner's powers are classified
into two broad categories: those listed in the statute creating
the corporation and those delegated by the Corporation or the
Standing Committee.
Municipal Councils
A municipality is a politic and corporate body constituted by
the incorporation of the inhabitants of a city or town. Normally,
Municipal Councils cover smaller areas than the Municipal Corporations.
The municipal acts of the states govern the Municipal Councils.
The State Government can, by notification, propose an area, except
a military cantonment, to be a municipality, define its territorial
limits and make alterations in them. The Municipal Council, President,
the Committees and the Executive/Chief Officer constitute the
main components of the structure of municipal government. The
Municipal Council makes laws that are called by-laws within the
framework of the municipal act for the civic governance of the
city or town. Generally, there is a provision for reservation
of seats for scheduled castes and for women. The size of every
Municipal Council varies from state to state; the municipal acts
prescribe both the maximum and the minimum number of councilors.
The tenure of the Municipal Council varies from three to five
years. The council elects, from among the councilors, a President
whose term may be co-terminus with that of the council. In certain
states Presidents are elected directly by the citizens. In a number
of states the term of the President varies from one to three years
and is not co-terminus with that of the council. The President
occupies an important position in the municipal administration
and enjoys considerable authority and power both in the deliberative
and executive organs of the municipality. He convenes and presides
over the meetings of the council and gives his rulings on all
controversial matters. He also holds the power to take disciplinary
action against offending councilors and can suspend or adjourn
any meeting in case of pandemonium. The President not only guides
the deliberation of the council but also executes its decision
as its chief Executive Officer. He is aware of day-to-day administration
and he is supposed to convey to the council the working of the
administrative machine. He is also the chief spokesman and the
link person with the government. The President enjoys power and
exalted position but his power depends on the support of the majority.
There is provision in the municipal act for setting up of committees
to assist the parent body to perform its tasks. The Standing Committee
is the most important of all committees. The powers and functions
of the Municipal Council Committees are the same as those of the
Municipal Corporation. The elected President being dependent on
the council, the Chief Executive Officers face a lot of pressure
and influences in exercizing their executive authority. In most
states the state government appoints the Executive Officer. In
some states the council makes the appointment, but his or her
independence has been confirmed by making it difficult his removal
from office - generally by a three-fourth-majority vote.
Cantonment board
Cantonments are predominantly military-occupied areas along with
a sizeable civil population that necessitates the municipalization
of its administration. The Cantonments are centrally administered
areas, placed under the direct administrative control of the Ministry
of Defence and the Central Government in contrast to other forms
of local government, which are under the control of state government.
The Cantonment Board is a special form of urban government, constituted
under the Cantonments Act (1924). However, certain changes have
been made with the Amendment of 1953. Cantonments are generally
classified into:
Class I cantonments in which the civil
population exceeds 10,000;
Class II cantonments in which the civil
population is between 2,500 and 10,000;
Class III in which the civil population
is less than 2,500.
Class I and Class II Cantonment Boards consist of the Military
Officer commanding the station (or his nominees), a first class
Magistrate nominated by the District Magistrate, a health officer;
an executive engineer; four military officers nominated by the
Commanding Officer and seven people's representatives elected
by the people. Class III Cantonment Boards consist of the Officer
commanding the station, one nominated military officer and one
elected member. In a Cantonment Board the role of the elected
representative is restricted to a great extent. Generally, the
Officer Commanding the station acts as the President of the Board
if he is a member of the Cantonment Board. In every Board in which
there is more than one elected member there is a Vice-President
elected by the elected members from among themselves. The functions
of the Cantonment Board are very much like the functions of a
municipality. The functions entrusted to the Board are both obligatory
and discretionary. The income of the Cantonment Board is derived
both from tax and non-tax revenues.
Local Government Functions
Local Bodies are expected to have a profound impact on the performance
of the economy of the country by utilizing local resources and
tapping human potentialities to the fullest. In the present context
of Indian economy, with massive urban growth and the economic
liberalization, heavy responsibility is placed on urban local
bodies. They are responsible for the improvement of the efficiency
of programmes and services, to mobilize local resources and to
provide coherent planning and delivery of the services at the
local level. All municipal acts in India provide for functions,
duties and responsibilities to be carried out by the municipal
government. These are divided in two categories obligatory or
discretionary.
Obligatory functions
Supply of pure and wholesome water;
Construction and maintenance of public
streets;
Lighting and watering public streets;
Cleansing public streets, places and
sewers;
Regulation of offensive, dangerous or
obnoxious trades and callings or practices;
Maintenance or support of public hospitals;
Establishment and maintenance of primary
schools;
Registration of births and deaths;
Removing obstructions and protections
in public streets, bridges and other places;
Naming streets and numbering houses.
Discretionary functions
Laying out of areas;
Securing or removing dangerous buildings
or places;
Construction and maintenance of public
parks, gardens, libraries, museums, rest houses, leper homes,
orphanages and rescue homes for women, etc.;
Planting and maintenance of roadside
and other trees;
Housing for low income groups;
Making a survey;
Organizing public receptions, public
exhibitions, public entertainment, etc.;
Provision of transport facilities with
the municipality;
Promotion of welfare of municipal employees;
Providing music for the people
Compulsory Primary Education is the responsibility of the local
bodies in a large number of states. The Municipalities elect the
school-based members. Some of the functions of the urban bodies
overlap with the work of para-statal agencies. The CAA provides
for the Twelfth Schedule listing the functions of municipal bodies.
The functions of the municipality, including those listed in the
Twelfth Schedule are left to the discretion of the State Government.
These local bodies have to be bestowed with sufficient powers,
authority and responsibility to discharge the additional functions
entrusted to them by the CAA. However, the act fails to provide
any powers directly to the municipalities and it has left it to
the discretion of the state government. Some of these functions
mentioned in Twelfth Schedule of CAA are of highly technical nature
and are likely to render municipal bodies ineffective. The CAA
has a provision regarding devolution of powers and responsibilities.
However, the devolution of powers commensurate with such responsibilities
is left to the discretion of the concerned State Government.
Thus, local governments are required to provide for services
irrespective of their administrative capacity to do so and have
to face unexpected new terms of their own as a consequence of
new sets of standards. In pursuing decentralization objectives,
it is important to ensure that existing municipal structures are
updated to undertake added responsibilities. Where, the administrative
functions of State Government for development of urban infrastructure
are transferred to the local level, it will become necessary to
examine whether local government is capable of handling such responsibilities.
If such capacity does not exist or is inadequate, it needs to
be created or strengthened.
Figure 5. Taxes Leviable under the Constitution
Government of India
State Governments
Income tax, wealth tax, corporate tax,
customs duties and excise tax
State excise, professional tax, sales tax,
entertainment tax and land revenue tax
Urban Local Bodies
(as permitted under state acts)
Tax on land & buildings, taxes on vehicles, entry tax
on goods (octroi) for use consumption and sale, theatre/show
tax and tax on advertisements other than in newspapers
To channelize the environmental improvement at national, state
and local level, the Government has created many authorities that
control environmental pollution.
Figure 6. Structure of Environmental Management
Local Government Finances
Municipal bodies (corporations and councils) are prescribed to
perform a vast array of functions (obligatory and discretionary)
for which adequate financial resources should be available. However,
there is no separate list of taxes exclusively for municipal bodies.
Many Commissions like the Local Finance Inquiry Committee (1951)
and Taxation Inquiry Commission (1953-1954) have been set up from
time to time to look into the issue of municipal finance. However,
municipal finance was left to the discretion of the respective
state governments to specify by law matters relating to imposition
of taxes.
Municipal Revenues are basically of the following types:
Tax revenue;
Non-tax revenue;
Grants-in-aid;
Borrowings or loans.
Figure 7. Local Urban Financial Set-Up
Figure 8. Local Urban Non-Tax Sources
Tax revenue
Major taxes levied by urban local government are the following:
Tax on property including service levy
for water supply, conservancy, drainage, lighting and garbage
disposal;
Tax on entry of goods into a local area
for consumption use of sale therein, popularly known as octroi;
Tax on Professions;
Tax on vehicles (other than motor vehicles).
The scope of taxation of Municipal Corporations is broader; they
are generally empowered to impose or increase taxes within the
limits laid down in the State Acts.
Property tax
Generally property tax is the largest single source of revenue
for municipal bodies in the states where there is no provision
for octroi. Property tax is levied on buildings and lands. Its
basis of taxation is the annual rental value or market rent. A
municipal body can impose, suspend, reduce or abolish the tax
or partly/wholly exempt any person or class of persons of any
such tax on any property or description of property by a resolution
passed at a special meeting and confirmed by the state government.
Octroi
It is the tax levied on entry of goods into a local area for
consumption or sale therein. Octroi is the most traditional tax
and a major source of local revenue. It accounts for about 60
to 80 per cent of total revenue of the urban local bodies where
it is imposed. In the states of Rajasthan, Gujarat and Maharashtra
for example, this tax is the major source of revenue. However,
due to scathing criticism from many front states such as Andhra
Pradesh, Assam, Bihar, Karnataka, Kerala, Madhya Pradesh, Nagaland,
Sikkim, Tamil Nadu, Tripura, Himachal Pradesh, Manipur and Meghalaya
have abolished octroi. The state of Gujarat has taken a policy
decision to abolish octroi and introduce an entry tax.
Non-tax revenue
Every Municipal Act has provisions, for issuance of licenses.
Likewise, every local authority is empowered to charge and collect
fees both regulatory (for license issued) and for services provided.
There is a vital difference between tax and fee: tax is a compulsory
levy, while a fee is a charge made in return for a benefit allowed
or conferred. When the service is extensively used and it takes
on the character and form of a public utility, then the fee charged
is called a user charge or user fee. Normally a user fee is to
be charged for public utilities, parking, entry fees for play
ground, swimming pools etc.
Grants-in-aid
An important element of municipal finance is grants-in-aid. There
are two types of grants: a general purpose grant (GPG) and a specific
purpose grant (SPG). The GPGs are intended to augment the revenue
of the local bodies for discharging their normal functions. The
SPGs are used for specific requirements, e.g. the increase of
wage bills due to inflation, education grants, public health,
road maintenance etc. Grants are ad-hoc and discretionary in nature.
Borrowings and loans
Municipal bodies can borrow from the state government and other
agencies when they cannot afford to meet their expenditures with
their existing revenues. The borrowing power of a local government
is regulated under Local Authorities Loans Act (1914). This act
provides that Municipal Corporations can borrow for development
activities and for payment of debt charges. Local bodies are permitted
to borrow for the following activities:
Construction of municipal works;
Provision of relief and the establishment
or maintenance of relief work in times of scarcity or famine;
Prevention of the outbreak of any dangerous
epidemic disease;
Acquisition of land;
Repayment of outstanding loans.
Typical municipal finances
The Bombay Municipal Corporation is the largest Municipal Corporation
in India in terms of population. The details of its finances over
1996 and 1997 will throw some light on the typical income and
expenditure pattern of million plus cities.
Table 6. Income and Expenditure of Bombay Municipal
Corporation (in million US$)
Budget
Income
Expenditures
Budget `A' (Revenue)
Last Year's (Deficit)
Budget `B' (Slum etc.)
Budget `C' (B.E.S.T)
Undertaking
Budget `E' (Primary Education)
Budget `G' (W.S & S.D.)
Tree Authority Budget
441.17
- 16.46
16.78
401.03
79.83
177.07
1.09
1100.51
424.67
0
16.78
400.92
79.83
104.16
1.67
1028.03
Finance commission
With the increasing pace of urbanization, municipal bodies are
finding it difficult to deliver the required level of services.
Moreover, with the Constitutional Amendment Act (1992) and the
addition of eighteen functions in the Twelfth Schedule, the functional
responsibilities of municipalities have increased beyond the provisions
of only civic amenities. Local Bodies are expected to play a crucial
role in the preparation of plans for local development and in
the implementation of development projects. In view of this, proper
assessment of the resources of the municipal bodies is required.
Thus, the Seventy-Fourth Constitutional Amendment Act under article
2430-I proposes the setting up of State Finance Commission. The
Governor of the State constitutes a State Finance Commission within
one year from the commencement of the Constitutional Amendment
Act. Its term is for 5 years. The recommendations of the State
Finance Commission will be in the following aspects:
Distribution between the state government
and municipalities of the net proceeds of the taxes, duties,
tolls and fees leviable by the state;
Allocation of a share of such proceeds
between the municipalities at all levels in a state;
Determination of taxes, duties, tolls
and fees to be assigned or appropriated by the municipalities;
Grants-in-aid to municipalities from
the consolidated fund of the state;
Measures needed to improve the financial
position of municipalities.
Under the new Amendment, it is at the discretion of the Governor
to refer any matter to the Finance Commission. This Commission
chalks out its own procedure within the framework of powers given
to it by state law. Another important aspect is that the Governor
has to present to the state legislature every recommendation made
by the Finance Commission along with explanatory notes on the
actions taken. The setting up of a Finance Commission as proposed
by the Constitutional Amendment Act will thus help the urban local
bodies to deliver the increased level of services, which are required
in the context of increasing urbanization. These additional responsibilities
allotted to them under the twelfth schedule also make it imperative
to make regular assessment of financial resources of the local
bodies. Regular assessment of the financial resources, would help
in the proper channelization of resources as well as the devolution
of resources from state to local government and give the local
bodies a firm footing.
Personnel Systems in Local
Government
Effective urban management and improved urban planning and development
efforts need to converge at the local government level to deal
with the problems arising as a result of urban growth trends at
the city level. All municipal programmes can be translated into
action only through well-recruited and trained personnel at the
disposal of urban local authorities. Development and maintenance
of adequate and skilled manpower with growth potential depend
upon the nature and type of recruitment policies and procedures
adopted and the efficiency with which they are administered and
executed. The policies, methods and procedures adopted by an organization
to build up its personnel are of vital significance. However,
municipal institutions from their inception seem to have overlooked
this important aspect of personnel administration.
The State Government normally appoints the Municipal Commissioner
in Municipal Corporation on a three-year term basis. Usually he
belongs to the Indian Administrative Service and has the seniority
of a deputy secretary to the state government. He is the Chief
Executive of the city government. Apart from the post of municipal
commissioner, there is a special provision in the Act for the
appointment of the posts of city engineer, medical officer of
health, municipal chief auditor, municipal secretary, deputy municipal
commissioner and assistant municipal commissioner. The Commissioner
prepares a regular statement setting forth the number, designation
and grade of officers and other employees that should be maintained
as well as the amount and nature of the salaries, fees and allowances
which may be paid to each of them and brings his statement before
the Standing Committee.
The corporation regularly prescribes the qualifications required
for each post. The power of appointment rests in the corporation
and is subject to the approval of the state government. The state
government may, pending on such approval, make modifications or
additions to the qualifications prescribed by the corporations
as it deems fit. As per provision of the act certain statutory
posts in the municipalities are created: the Chief Officer, the
Municipal Engineer and the Health Officer. In most of the municipalities,
the recruitment is made by a selection committee appointed by
the resolution of the Council or by the President of the Council.
With an exception of Bombay Municipal Corporation, salaries of
the staff of central government and state government employees
are higher than the salaries of personnel working in urban and
rural Local self-government bodies. Due to lower pay scales, competent
candidates, especially the candidates having a technical background
are reluctant to join municipal services.
Central-Local Links
The central government controls the overall development initiatives
in urban areas through the Ministry of Urban Affairs and Employment.
However, state governments have a significant control on the staffing,
finances and administration of the Municipal Corporations and
councils. The state governments exercise control through their
urban development departments. The directorates of municipal administration
also have a town planning (and valuation) department to exercise
control on the physical planning of the urban areas as this department
prepares the development plans for the cities and towns in their
respective states. There is an increasing emphasis on the training
of municipal employees. There are a number of renowned training
institutions that provide training to elected and executive personnel
in local authorities in different subjects such as engineering,
human resources development, capacity-building, solid waste, water
supply and information systems. These include the Indian Institute
of Public Administration, the National Institute of Urban Affairs,
All India Institute of Local Self-Government and the Regional
Centres for Urban and Environmental Studies (Mumbai, Lucknow and
Hyderabad are the major institutions in India).
Extent of Public Participation
Traditionally it is the responsibility of elected councilors
to bring about public participation in the decision-making process.
However, direct public participation is difficult to realize due
to various reasons such as time available to the council and the
public and the large number of people living in cities and towns.
In general, people contribute and participate through media such
as letters in newspapers, posters and books.
There are a number of tasks specific in every city that concentrate
on the fight for certain developmental or remedial issues. People
are involved in such activities and contribute to the council
and state level decision-making process. The Seventy-Fourth Constitutional
Amendment Act and the Conformity Municipal Legislation by different
state governments have paved a new path for public participation
through the ward committees, which are supposed to act as public
auditor in the development process.
The Way Ahead
The above discussion focuses on the evolution, structure, functions
and finances of urban local bodies. It also highlights the changes
that are sought to be brought about by the Constitutional Amendment
Act (1992). In a modern development setting involving urbanization,
it is necessary to take note of urban local government as it is
through establishing a strong local government structure that
full fledged democratic decentralization can be brought about.
The present CAA in India is a step towards bringing about changes
in the existing framework of urban local bodies and is in conformity
with the world process of democratic decentralization. It is expected
to be a harbinger of a new era, by making the urban local bodies
an efficient and democratic form of government in the true sense.
The reforms required by urban local bodies are multifaceted encompassing
political, social, administrative, financial and technological
dimensions. The act provides a constitutional form of the structure
and mandate for municipal bodies to enable them to function as
effective democratic institutions of local self-government. However,
it is worth mentioning that the constitutional status alone is
not sufficient to make the municipal bodies vibrant and effective
institutions of democracy. Expectations are high that it will
refurbish the whole system of local self-government by implanting
a new structure of municipal authorities with additional devolution
of functions, planning responsibilities, new system of fiscal
transfers and empowerment of women and weaker sections of the
society.
References
Golandaz, H. M. and B. Mohanty (ed.), Empowerment of Urban
Local Government in India (with Special Reference to the Seventy-Third
Constitutional Amendment Bill of 1991), in: Urbanization
in Developing Countries; Basic Services and Community Participation,
pp. 376-388, Indian Institute of Social Sciences and Concept Publishing
Company, New Delhi, 1993
Golandaz, H. M., Empowerment of Urban Local Government in
India, with Special Reference to the Seventy-Fourth Constitutional
Amendment Act of 1992, paper presented at the National Symposium
on the Constitutional Seventy-Fourth Amendment Act, organized
by the Regional Centre for Urban and Environmental Studies (RCUES),
Lucknow, 24-25 June 1994
Golandaz, H. M., Seventy-Fourth Constitutional Amendment
Act and Conformity Municipal Legislation in Gujarat and Maharashtra,
in: Urban India, Vol. XV, p. 151-159 January 1995
Government of India, The Seventy-Fourth Constitutional Amendment
Act 1992
Jha, Gangadhar and B. Mohanty, (ed.), Strengthening of Municipal
Government in India; Options for Reform, in: Urbanization
in Developing Countries, Basic Services and Community Participation,
pp. 361-375, Indian Institute of Social Sciences and Concept Publishing
Company, New Delhi, 1993
Jha, Gangadhar, The Seventy-Fourth Constitution Amendment
and the Empowerment of Municipal Government; A Critique,
in: Urban India Vol. XIII, p. 68-78, July 1993
Maheshwari, S. R., Local Government in India, Educational
Publishers, Agra, 1996-1997
Pore, S. S., Local Non-Tax Revenue; Mobilization and Minimization
of Local Expenditure, paper presented at the National Conference
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by the National Institute of Rural Development at Hyderabad, 18-19
December 1996
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