Urban Local Bodies (ULBs) - Indian Polity Notes

Urban Local Bodies (ULBs) are basically small local public bodies that administer or rule a city or town with a specific population. The state governments have delegated a vast number of tasks to ULBs. The UPSC Indian Polity and Governance Syllabus includes Urban Local Bodies which is descussed in this article.

There are different types of urban local bodies in India, such as municipal corporations, municipalities, notified area committees, urban area committees, special purpose agencies, townships, port trusts, cantonment boards, etc. 

Urban Local Bodies - Historical Background

• The first municipal corporation in India was set up at Madras in 1687, and in 1726 the municipal corporations were set up in Bombay and Calcutta.
• In 1870, Lord Mayo’s resolution for financial decentralisation paved the way for local self-government.
• The famous resolution by Lord Ripon, which is also called the Magna Carta of Local Self Government, was issued by Lord Ripon’s Government on 18th May, 1882.
• By the Government of India Act 1919, the local self-government was transferred to ministers responsible to new provincial legislatures.
• The Municipal Act of 1919 and District Municipalities Act of 1920 in Madras, gave powers to the Councils to elect their own chairmen and frame their own budgets.
• Another Act passed in 1925 made the city municipalities, with a population exceeding one lakh wholly elective.
• Government of India Act, 1935 introduced provincial autonomy and local self-government was declared as a provincial subject.
• The National Government appointed a committee in 1948 known as the Local Finance Inquiry Committee, to report on ways and means for improving the financial resources of local bodies.
• In 1985, the National Commission on Urbanization was appointed by the Central government which gave its report in 1988. Commission was set up to study and give suggestions on all aspects of urban management.
• The Constitution (74th Amendment) Act, 1992 is a landmark step of the Government of India to strengthen local self-government in cities and towns.

Purpose for Urban Local Bodies

• ULB’s set up to provide urban services efficiently, effectively and equitably.
• Urban Local governments also plan for economic and social development.
• They regulate the use of land and the construction of buildings.
• They regulate the supply of water for domestic, industrial and commercial purposes.
• They maintain public health, sanitation conservation and solid waste management.
• They administer various laws and regulations.
• They implement central government plans at the grassroots level.
• They are doing the job of reducing poverty.

Provisions of Urban Local Bodies under 74th Constitutional Amendment Act

• Article 243Q mentions about the Constitution of Municipalities i.e. Nagar Panchayat, Municipal Council and Municipal Corporation.
• Article 243R mentions the Composition of Municipalities, it states that all of its members are directly elected by the people of the Municipal area which is divided into territorial constituencies known as wards..
• Article 243 S mentions about constitution and composition of ward committees consisting of wards and member of wards who represent that ward in Municipality
• Article 243 T deals with the reservation of the seats in every Municipalities.
• Article 243W deals with the powers, authorities and responsibilities of municipalities that includes urban planning, financial and social development, and so on.
• Article 243X states that the constitution has left it open to the Legislature of a State to specify by law matters relating to imposition of taxes.
• Article 243 ZE says that there will be a Metropolitan Planning Committee in every Metropolitan region to set up a draft improvement plan for the Metropolitan region overall.

Composition of Municipalities

• The seats will be filled by direct elections. For this reason, each metropolitan region shall be partitioned into territories to be known as wards.
• The state assembly might give the way of election of the Chairperson of a municipality.
• The Legislature of a State may, by law, provide for the representation in a municipal body of persons having exceptional knowledge or experience of civil organization, the members from Rajya Sabha, Lok Sabha and the members from Legislative Council and Legislative Assembly of the State, representing constituencies, which comprise wholly or partly the Municipal Area.
• The state legislature body may likewise give the manner of the election of the Chairpersons of a municipality.

Financial Power of Municipalities

The State Legislature by law:

1. Authorize a municipality to collect, collect and appropriate taxes, duties, tolls and fees.
2. Allocate the taxes, duties, tolls and taxes collected and collected by the state government to a municipality.
3. Granting of aid to municipalities from the Consolidated Fund of the State.
4. Establishment of funds for the credit of all municipal funds.

Finance Commission

The Finance Commission for every five years reviews the financial status of municipalities and makes recommendations accordingly to the Governor.

The recommendations of the Finance Commission will cover the following:

• The distribution between the State and the Municipalities of the net proceeds of taxes, duties, tolls and duties imposed by the State.
• Distribution of the share of these revenues among the Municipalities at all levels of the State.
• Determination of taxes, duties, tolls and charges to be allocated or distributed by the municipalities.
• Granting of aid to municipalities from the State Consolidated Fund.
• Measures necessary to improve the financial situation of municipalities.
• Any other matter referred to the finance commission by the governor in the interest of sound municipal finance.

District Planning Committee (DPC)

• Every state at district level shall have a district planning committee to consolidate development plans prepared by panchayats and municipalities.
• DPC also prepared a draft development plan for the district as a whole.
• The state legislature makes provision for composition of committee, functions, manner of election of members and chairperson.
• According to the Act, 4/5th members of committee shall be elected by elected members of panchayats and municipalities from amongst themselves. The proportion for the representation of these members shall be the ratio of rural and urban population of the district.

Metropolitan Planning Committee(MPC)

• Metropolitan planning committee prepares a draft development plan.
• According to the Act 2/3rd members of MPC shall be elected by elected members of municipalities and chairpersons of panchayats in the area of the metropolitan region from amongst themselves.
• The state legislature makes provision for composition of committee, functions, manner of election of members and chairperson.
• The proportion for the representation of these members shall be the ratio of rural and urban population of the district.

Types of Urban Governments

Municipal Corporation

• It is established in states by acts of state legislatures and in UT’s but acts of Parliament.
• Each corporation has three organs namely; council, standing committees and commissioner.
• Council, a legislative body, is headed by the mayor who is assisted by the deputy mayor.
• Council consists of counsellors who are directly elected by the people.
• Standing committee assists the working of the council. It deals with public work, education, taxation, health, finance and so on.
• Municipal Commissioner is the chief executive authority of the corporation and is responsible for implementation of decisions of council and standing committees.

Municipality

• The municipalities are established by the acts of the concerned state legislature for the administration of towns and smaller cities.
• They are also known by municipal council, municipal committee, municipal board, borough municipality, city municipality and others.
• Municipality also has the same three organs like municipal corporation namely Council, standing committee and the Chief Executive officer.
• In composition they are quite similar to municipal corporations except that the council is headed by President /chairman and is assisted by Vice-president/vice-chairman and in place of commissioner they have a chief executive officer/chief municipal officer.
• The Chief Executive authority, appointed by the state government, is responsible for day-to-day administration.

Notified Area Committee

• A notified area committee is established for the administration of an area which is either a fast developing town due to industrialisation or a town not yet developed to fulfil all the conditions necessary for the constitution of a municipality.
• It is established by a notification in the gazette.
• Only the provision mentioned in the government gazette notification is applicable to the function of Notified Area Committee.
• The powers of a notified area committee are the same as of municipality.
• The Notified Area committee is an entirely nominated body. All the members are nominated by the State government including the chairman to a notified area committee.
• Therefore, it is neither an elected body nor a statutory body.

Town Area Committee

• A Town Area Committee is established for the administration of a small town.
• It is a semi-municipal authority and has a limited number of civic functions such as drainage, roads, street lighting and conservancy.
• It is created by a state legislature act.
• The act mentions the composition, functions and other matters relating to the Town Area Committee.
• It can be a body fully appointed by the government of a state or a body that is fully elected or partially appointed and partially elected.

Cantonment Board

• Cantonment Boards are established for municipal administration for the civilian population in the cantonment areas.
• It is established and administered by the union government.
• It is set up under the provisions of the Cantonments Act of 2006, a central government act.
• A cantonment board works under the administrative control of the union defence ministry.
• Presently, there are 62 cantonment boards in the country.
• Cantonment Boards are divided into four categories, i.e. Category I - population above 50,000; Category II- Civil population between 10,000-50,000; Category III- Civil population between 2500-10,000 and Category IV- Population below 2500.
• Its members are partly elected and partly nominated.
• The executive officer of the cantonment board is appointed by the President of India.

Township

• Township is established by large public enterprises to provide civic amenities to its staff and workers, who live in the housing colonies built near the plant.
• It is not an elected body and Enterprise appoints all the members, including the town administrator to look after the administration of the township.

Port Trust

• The port trusts are established in the port areas of the country like Mumbai, Kolkata, Chennai, etc.
• The purposes for establishment of port trust are to manage and protect the ports and to provide civil amenities.
• It is created by an Act of Parliament.
• Port trust consists of both elected and nominated members. Its Chairman is an official.
• Its functions are more or less similar to those of a Municipality.

Special Purpose Agency

• Apart from the above seven types of urban bodies, the states can create certain agencies to look after specific functions that ‘legitimately’ belong to any of the above local urban governments.
• Special purpose agencies are function-based and not area-based like the other urban bodies.
• Examples of such bodies are: Town improvement trusts; Water supply and sewerage boards; Pollution control boards; Electricity supply boards; Urban development authorities; City transport boards; Housing boards.
• These are established as statutory bodies by an act of state legislature or as departments by an executive resolution.
• They function as autonomous bodies which perform the functions assigned to them independently of the local urban governments.
• They are not subordinated to any organ of the local urban bodies.

Challenges of Urban Local Bodies

• Delegation of powers: Most state governments have not delegated power to urban local authorities, so ULBs have not been able to effectively carry out their functions.
• Ineffective leadership: Mayors and councilors use their positions for their political careers rather than being agents of change for desired urban reforms.
• Creation of parastatal agencies: Parastatal agencies such as urban development authorities and state-owned enterprises are accountable only to state governments and not to local governments.
• Lack of funds: The first and most serious problem facing urban local communities is lack of funding. Municipal committees in many small towns also have difficulty paying salaries to their employees on time.
• Corruption: the administrative mechanisms available to these local authorities are insufficient Often underpaid staff engage in corrupt practices which have resulted in loss of income.
• Limited capacity: Even though municipal bodies receive funds, they do not just not have the ability to function effectively. Most of the funds paid to ULBs are restricted funds.

Urban Local Bodies Reforms

Urban local government reforms and urban service reforms are underway with the aim of strengthening the financing of urban local governments in states. These reforms would enable ULBs to provide better public health and sanitation services to their citizens.

Goa has joined five other States namely, Andhra Pradesh, Madhya Pradesh, Manipur, Rajasthan and Telangana, who have completed ULB reforms.

The four citizen-centric areas identified for reforms are:

1. Implementation of One Nation One Ration Card System
2. Ease of doing business reform
3. Urban Local body/ utility reforms
4. Power Sector reforms.

The set of reforms stipulated by the Department of Expenditure to achieve these objectives are:

• The State will notify floor rates of property tax in ULBs which are in consonance with the prevailing circle rates (i.e. guideline rates for property transactions) and;
• The state will notify floor rates of user charges in respect of the provision of water-supply, drainage and sewerage which reflect current costs/past inflation.
• The State will put in place a system of periodic increase in floor rates of property tax/ user charges in line with price increases.

FAQs

MCQs

Question: Local self-government can be best explained as an exercise in [UPSC 2017]

(a) Federalism

(b) Democratic decentralization

(c) Administrative delegation

(d) Direct democracy