Chapter 6 Summary Findings and Recommendations Contents N o . Sub-No. T itle Page 6.1 - Introduction 203 6 .2 - Principles of Municipal budgeting 204 6.3 - Research Methodology Applied 205 6.3.1 Scope of Research 205 6.4 - Testing of Hypotheses 207 6.5 - Major findings 207 6.5.1 Findings Based on Core Part of the Study 208 6.5.2 General Observations 212 6.6 Recommendations 213 6.6. 1 For revenue side of the Budget 213 6.6.2 For expenditure side of the Budget 215 6.7 - Sum m ing U p 220 202 Chapter 6 Summary Findings and Recommendations 6.1 Introduction This section introduces Institutions in Local-self Government explaining their role, functions and importance in the process o f development. Some o f theTssues before a N aritm -««— concerned with the basic needs o f citizens having historical and geographical background. The needs o f the people belonging to the same location with a more or less similar socio-economic background might indicate similarity. Population o f a nation is distributed over a number o f regions, states, districts, Talukas and finally into cities and villages. For administrative convenience, the territory o f the nation get distributed into Central Government at National Level, State Governments for each o f the State, each state is further divided into administrative divisions containing a group o f districts under the region. District Administration, Taluka Administration and a chain o f Local-self Government bodies at the District, Taluka and village level manage to administer local needs of the people within their jurisdiction. Though administration o f local self governments’ bodies is complicated, their countrjwide network is quite large and they partly share the functions o f State and Union governments. In other words. Local-self government is an inseparable part o f the Union and State Governments. This linkage between these government bodies assumes political significance.’^ Mimicipal bodies such as Municipal Corporations in big cities and Municipal Councils in smaller towns are set up with the aim o f solving the problems o f citizens residing in their area o f jiirisdiction. It is difficult, either for the Union government or state governments to take care o f the needs o f people in cities and towns who are not approachable to local people, whereas the local municipal bodies are easily accessible to them. Since the area o f operations o f these bodies is limited to a particular locaUty, these can understand and solve local problems promptly. This decentralization o f powers between different levels o f govenmient helps in attending different problems by different governments within the limits o f financial resources available to them. 203 Today, local self government bodies became inseparable part of State Governments in India. These local bodies are known by different names in the countries around the world. United Kingdom (UK) is the originator of local self government bodies and these are called “local Authorities” in England In France, these are called ‘Local Administration’ and iir USA, ‘Municipal Administration’. The entire administration of the government of a country is distributed at a three level government as an administrative convenience. The Union Government at the top or Central Govenmient, followed by State Governments for each of the state in the coimtry, in the middle and Local Self Govenunents at the bottom for the specific location or area specified within a state. The distribution of authority is decided by the constitution of the country, wherein clear-cut distribution of powers and duties of each level of government is defined. In India, Local self Govenmient institutions are assigned constitutional status xmder and 74* amendments to the Constitution of India.''* Now; the State Govenmients in India could not dismiss any local-self government body at their sweet will. If at all any local body is terminated by the state government on account of any valid reason for doing so, it is obligatory for the concerned government to conduct elections and reinstate the local body within six months. Furthermore, the local bodies can approach a court of law to protest their termination. Indian Constitution has provided this protection to local bodies. 6.2 Principles of Municipal Budgeting: The work of public administration has to be people focused because the money required ^ for development, civil amenities and welfare of the people is collected from the public by way of i taxes levied on people. The public has a right to ask whether money contributed by them through taxes is properly utilised or otherwise. Municipal bodies are, therefore, required to present a systematic budget showing the money intended to be raised through various sources of income and its expenditure on various schemes of urban development, provision for civil amenities and welfare of the urban citizen. Item-wise expenditure is planned in advance and an estimate of revenue likely to be available for the purpose has to be estimated. If plaimed expenditure exceeds estimated revenue, the deficit has to be met through raising additional revenue through every possible source. These are the things municipal bodies should take into account while preparmg budget estimates for the next financial year. 204 6.3 Research Methodology Applied. The title of approved topic is “An Analytical Study o f the Budgets o f M unicipal Councils in N ashikD istrict (2000-2001 to 2009-10)” The type of research is exploratory, based exclusively on intensive analysis o f secondary data on budgets of municipal corporations in Nashik District for the decade 2000-2001 to 2009^ 10. It will be a hbrary research. The budgeted figures of receipts and payments (Income and Expenditure) will be thoroughly analyzed for arriving at concrete inferences. There are two Municipal Corporations, eig^ Municipal Councils and one Cantonment Board in Nashik District. The problems and prospects of Corporations and Cantonment Boards are different from those of smaller units of Mimicipal Councils. Hence, this study will be mainly focused on Municipal councils, leaving aside the corporations and Boards. Since all the eight Municipal Councils will be covered in this study, it will be a ‘population study’ rather than a ‘sample study.’ The entire study is mainly based on secondary data sources Raw data on receipts and expenditure of the MCs in Nashik District was collected item-wise for the period from 2000-01 to 2009-10. Item-wise. Year-wise and MC-wise figures of receipts and expenditure were first tabulated and then divided in to two time periods from 2000-01 to 2004-05 and 2005-06 to 2009- 10. Five yearly annual averages of all the items were worked out for both the time periods so as to make comparison possible for changes in the trend, if any over time. Further, the growth in revenue and expenditure between these periods has been calculated to find the magnitude of changes over time. Aimual averages of all the 8 MCs for each of the municipal coimcil and each of the years under study have also been worked out to find relative strength and weaknesses of MCs in respect of receipts and payments. At the end, relative share of each of the item of receipt and expenditure in total has been worked to enable ranking of items of receipts and expenditure. This methodology has simplified calculations in terms of amounts expressed in terms of Rs. Lakh. 6.3.1 Scope of Research Scope of this research is limited to the financial analysis of Budgets of Municipal councils in Nashik District for the period of 2000-01 to 2009-10. Budgeted figures have been compared with actual and deficiencies/surpluses, if any, will be analysed. 205 Each Municipal Council prepares its Annual Budget for the next financial year, in December. The provisions made therein are discussed in the Standing Committee at the end of February and finally in the general body of the Council immediately thereafter for sanction. On approval of the Council, the budget proposals are sent to District Collector for final approval, on receipt of which it becomes operative. The Collector has an authority to suggest changes in the budget proposals of the councils. Nashik district has in alll3 urban local-self government bodies including 2 corporations, 2 ‘B ’ class Municipal Coxmcils, (hereinafter shall be referred to as ‘MCs’) and 6 ‘C’ class MCs, one Cantonment Board and seven Census Townships. All these bodies vary in the organisation structure and soxffces of revenue and expenditure. The researcher has, therefore, concentrated his analysis on the majority group of B and C class Municipal Councils with fairly comparable administrative set up and uniform sources of revenue and homogeneous pattern of expenditure. T able 6.1 Populat ion Growth in Municipal Councils n Nashik District Sr. Municipal Population Census 2001 Decennial Total Decennial tst. No. Council Class Females Males Total Growth Population Growth Year rate 2001 2011 rate 2011 1 Tryambak 1854 C 4680 5124 9804 24.36 12,415 26.6 8. Yeola 1858 B 20805 22402 43207 25.06 49,878 15.4 2. Sinnar 1860 C 15201 16429 31630 22.29 62,251 96.8 3. Igatpuri 1868 C 15134 16405 31539 37.92 31509 -0.1 4. Nandgaon 1921 C 11214 11981 23195 13.51 23595 1.7 5. Bhagur 1925 C 6067 6381 12457 3.34 12,430 -0.2 6. Manmad 1928 B 35399 37002 72401 18.09 81,105 12.0 7. Satana 1954 C 15738 16793 32561 17.69 37,872 15.3 Total 124277 132517 256794 20.75 3,11,055 21.1 Source; Financial Position of Municipal Councils in Nashik District Annual Rq>ort, 2006-07 Table 6.1 shows the details of MCs in Nashik District arranged in descending order of population size.