Gujarat and 18 other states lose performance grants for failing to introduce basic urban reforms

NEW DELHI: Prime Minister Narendra Modi’s native state Gujarat and 18 others have failed to introduce basic urban and municipal reforms, thereby losing out on crores of rupees of performance grants. A status report of the urban development ministry shows that while Gujarat missed the bus, other BJP-ruled states of Madhya Pradesh, Chhattisgarh and Rajasthan received the financial incentive in 2014-15.

Andhra, Assam, Chhattisgarh, Haryana, Kerala, Madhya Pradesh, Mizoram, Rajasthan, Telangana and UP were the only 10 states that fulfilled the nine conditions to qualify for the performance grant during the fiscal.

These conditions include governance and municipal reforms such as putting in place an audit system for urban local bodies, double entry accounting system, levy of property tax by the urban local bodies, constitution of state property tax board, standardising service level benchmarking (which includes a number of criteria such as lifting of garbage), fire hazard response and mitigation plan for cities with a population of a million plus, and constitution of independent local body ombudsman.

A state needs to fulfil these conditions and send its claims to the urban development ministry’s central monitoring committee.

Eleven states could not fulfil all the criteria during 2014-15 and eight did not send the claims. As per the ministry’s status report, Gujarat, Bihar and Jharkhand could fulfil only six of the nine conditions. Karnataka, Maharashtra and Punjab performed better, fulfilling eight of the nine conditions. Goa and West Bengal were at the fag end of the spectrum, fulfilling only one of the nine conditions. Tamil Nadu and Sikkim fulfilled two each and Jammu and Kashmir five conditions. The remaining states did not send any claims.

Gujarat has not been able to tap into the performance-linked grants, which were earmarked for the states’ urban local bodies under the 13th Finance Commission, for any year over the past five financial years.