Planning Commission suggests more autonomy for urban bodies

NEW DELHI: Planning Commission on Monday disapproved of the decision by certain states on user charges, property tax and octroi without giving adequate attention to Urban Local Bodies and sought strengthening of autonomous functioning of ULBs to ensure their financial self-reliance.
"State governments continue to take decisions on such matters as rates of user charges, octroi, property tax with little reference to ULBs that are affected by these decisions. They (states), therefore, need to strengthen the autonomous functioning of ULBs through positive measures, particularly in ensuring their financial self-reliance," Planning Commission Deputy chairman K C Pant said here.
Delivering the R N Malhotra memorial lecture, Pant said urban governance was on Monday characterised by fragmentation of responsibility, incomplete devolution of functions and funds to the elected bodies and urban bodies, unwillingness to progress towards municipal autonomy, adherence to outmoded methods of property tax and reluctance to levy user charges.
India''s urban population is expected to rise from 28 per cent to 40 per cent by 2020, placing increasing strain on the country''s urban infrastructure, Pant said.
"Future growth is likely to concentrate in and around 60-70 large cities having a population of over one million," Pant said, adding that decentralisation of governance and greater reliance on institutional financing and capital market for resource mobilisation are likely to increase the disparity between the large and small urban centres.
Stressing that good urban governance calls for adequate policy and legal framework, Pant said there was a need to review various legislations governing property transactions and consolidating them into one comprehensive law, rationalise tax rates pertaining to real estate and relaxation of the present norms of 100 acres for FDI in integrated townships.
He sought changes in financial sector to enhance the investments into the real estate.
"Some other measures, which are required to improve the urban governance are, encouragement to the pension, provident fund and insurance companies to invest in real estate and encouragement of private participation in the provision of municipal services, which could provide benefits of access to skills required for improving urban services," he said.