Functions and Finances of Urban Local Bodies in Jharkhand
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FUNCTIONS AND FINANCES OF URBAN LOCAL BODIES IN JHARKHAND Final Report Simanti Bandyopadhyay O. P. Bohra With Research Assistance From Aishna Sharma May 2010 National Institute of Public Finance and Policy 18/2 Satsang Vihar Marg Special Institutional Area (Near JNU) New Delhi 110 067 India Ph: +91-11-2656 9303, 2656 9780, 2656 9784, 2656 3305, 2656 9286 Fax: +91-11-2685 2548 Contents 1. Introduction 1 1.1 Introduction 1.2 Some Basic Indicators 1.3 The ULBs in Jharkhand: A Brief Description 1.4 Comparative Analysis: Jharkhand with Twelve Indian States 1.5 Structure of the Report 2. Functions and Finances in the ULBs of Jharkhand 16 2.1 Introduction 2.2 Functions and Taxation Powers in Urban Local Bodies of Jharkhand 2.3 Finances of Urban Local Bodies in Jharkhand 2.4 Gross City Products and Revenue Capacities: Some Preliminary Estimations 2.5 Conclusions 3. Institutional Arrangement in Service Delivery 50 3.1 Introduction 3.2 Levels of Services 3.3 Institutional Arrangement in Service Delivery 3.4 Organization Set-up and Staffing Requirements in Urban Local Bodies of Jharkhand 3.5 Conclusions 4. A Comparative Analysis 65 4.1 Introduction 4.2 Finances: A Comparative Analysis 4.3 Finances: Comparisons with ULBs in West Bengal 4.4 Institutional Arrangements in Service Delivery: Some ULBs in Other States 4.5 Conclusions 5. Summary of Recommendations 98 Appendices Appendix 1 13 Appendix 2 30 Appendix 3 63 Appendix 4 86 Appendix 5 106 i List of Tables Table 1.1 Comparative Basic Indicators of India and Jharkhand 2 Table 1.2 Some Basic Indicators: District-wise Percentages 3 Table 1.3 ULBs in Jharkhand: A Snapshot 5 Table 1.4 Some Indicators in the ULBs of Jharkhand: Socio-demographic, Standard 7 of Living, Municipal Services, Infrastructure, Employment Table 1.5 Status of SFC Report 11 Table 2.1 Major Functions Other than Five Basic Services in the ULBs of Jharkhand 18 Table 2.2 Taxes/Charges Actually levied by the ULBs of Jharkhand 20 Table 2.3 Performance of the ULBs in Jharkhand: Some Indicators (2004-05 Prices) 25 Table 2.4 Finances in the ULBs of Jharkhand: Some Estimations (2004-05 Prices) 28 Table 3.1 Physical Levels of Services (Median) in the ULBs of Jharkhand 51 Table 3.2 Norms for Basic Services 51 Table 3.3 Revenues: MADA 56 Table 3.4 Revenues Demand and Collection by PHED 58 Table 4.1 Socio- Demographic and Employment Indicators: TOR Cities 66 Table 4.2 Coverage of Municipal Services, Infrastructure and Standard of living 66 indicators: Terms of Reference cities Table 4.3 Finances (Rs, absolute) for the year 2004-05: Terms of Reference cities 67 Table 4.4 Finances ( Rs, per capita) for the year 2004-05 68 Table 4.5 Performance of ULBs in West Bengal: Some indicators 76 Table 4.6 Some indicators in West Bengal Socio-Demographic, Service Delivery, 80 Infrastructure, Demand , Employment Table 4.7 Sample of Eight Relatively Smaller cities in Other Indian States 83 Table A1.1 Coverage and Infrastructure indicators 13 Table A1.2 Demand, Cost and Employment indicators 14 Table A2.1 a Functions Transferred to the ULBs by way of Rules/Notifications/Orders 30 of the State Governments. in Major States: Core and Welfare functions Table A2.1 b Functions Transferred to the ULBs by way of Rules/Notifications/Orders 30 of the State Governments. in Major States: Urban Development Functions ii Table A 2.2 Taxation Powers assigned to the ULBs as per the State Municipal Acts 31 Table A2.3 Absolute finance components in the ULBs of Jharkhand for the year 34 2004-05 Table A2.4: Municipalities registering minimum and maximum values of absolute 35 finance components in the ULBs of Jharkhand for the year 2004-05 Table A 2.5: Per capita finance components in the ULBs of Jharkhand for the year 2004 36 05 Table A2.6 Municipalities registering minimum and maximum values of per capita 37 finance components in the ULBs of Jharkhand for the year 2004-05 Table A2.7 Municipalities registering minimum and maximum values of performance 38 indicators for the year 2004-05 Table A2.8 Municipalities registering maximum and minimum values of financial 39 estimators for the year 2004-05 Table A2.9 Five yearly and Yearly growth rates of Absolute Revenue components in 39 ULBs of Jharkhand Table A 2.10 Minimum and Maximum Five yearly and Yearly growth rates of Absolute 40 Revenue components in ULBs of Jharkhand Table A2. 11 Municipalities registering Minimum and Maximum growth rates of 41 Absolute Revenue components in ULBs of Jharkhand Table A2.12 Five yearly and Yearly growth rates of Per capita Revenue components in 42 ULBs of Jharkhand Table A2.13 Five yearly and yearly Minimum and Maximum growth rates of Per capita 43 Revenue components in ULBs of Jharkhand. Table A2.14 Municipalities registering Minimum and Maximum growth rates of Per 44 capita Revenue components Table A2.15 Five yearly and Yearly Growth rates of Revenue Expenditure in ULBs of 44 Jharkhand Table A2.16 Five yearly and yearly Minimum and Maximum growth rates of Revenue 45 Expenditure in ULBs of Jharkhand Table A2.17 Municipalities registering Minimum and Maximum growth rates of 45 iii Revenue Expenditure Table A2.18 Financial Requirement of ULBs in Jharkhand according to size classes 46 using 2004-05 prices. Table A2.19 Minimum and Maximum financial requirements of ULBs across size 47 classes Table A2.20 Municipalities registering Minimum and Maximum Values of financial 48 requirements Table A 2.21 Financial Requirements (2004-05 Prices) According to Norms for ULBs of 49 Jharkhand Table A 2.22 Financial Norms for Indian Cities (2004-05 Prices) 49 Table A3.1 ULB and Non-ULB coverage of MADA 63 Table A3.2 Pattern of Functional Responsibilities of MADA 63 Table A3.3 Details of ULBs covered under PHED for Water Supply 64 Table A3.4 Details of Major Project taken by PHED in last five years 64 Table A 4.1 Matrix of Institutional Set-up and Service Delivery Mechanism in Nine 86 Cities As per TOR Table A 4.2 Matrix of Institutional Set-up and Mechanism of Service Delivery in 92 Relatively Smaller ULBs List of Figures Figure 2.1: Finance (Absolutes) in ULBs of Jharkhand across different size classes 22 (2004-05) Figure 2.2: Finance (Per Capita) in ULBs of Jharkhand across different size classes 22 (2004-05) Figure 2.3: Growth of Finances (Absolutes) in ULBs of Jharkhand 23 Figure 2.4: Growth of Finances (Per Capita) in ULBs of Jharkhand 23 Figure 3.1: Organizational Chart 61 Figure 4.1: District map of West Bengal 69 Figure 4.2: Annual growth Rates of Local finances (Absolutes): Jharkhand and West 71 Bengal (selected districts) iv Figure 4.3: Annual growth Rates of Local finances (Per Capita): Jharkhand and West 71 Bengal (selected districts) Figure 4.4: Per Capita Revenue and per capita Expenditure for ULBs of Jharkhand 74 and West Bengal (selected districts) for the year 2004-05 Figure 4.5: Per Capita Revenue for ULBs of Jharkhand and West Bengal (selected 75 districts) for the year 2004-05 List of Boxes Box 3.1 Status of Present and Proposed Role of Private Sector in Service Delivery 57 in Dhanbad Area Box 5.1 Rates and Area Covered under Land Use in MADA Area 105 v 1 Contents Section 1 Finances of Urban Local Bodies in Jharkhand 1 Section 2 Organization Charts and Institutional set up for Service Delivery in 34 Urban Local Bodies in Jharkhand Section 3 Some Best practices as initiated by Urban Local Bodies in India 69 List of Tables Table1.1A Taxes/ Charges actually levied by the ULBs 1 Table1.2A Year wise Absolute Total Revenues of ULBs (Rs Lakhs, Current Prices) 3 Table1.3A Year wise Absolute Own Revenues of ULBs (Rs Lakhs, Current Prices) 4 Table1.4A Year wise Absolute Total Expenditures of ULBs (Rs Lakhs, Current Prices) 5 Table1.5A Year wise Absolute Revenue Expenditures of ULBs (Rs Lakhs, Current 6 Prices) Table1.6A Year wise Per Capita Property Tax Revenue of ULBs (Rs, 2004-05 prices) 7 Table1.7A Year wise Per Capita Tax Revenue of ULBs (Rs, 2004-05 prices) 8 Table1.8A Year wise Per capita Non Tax Revenue of ULBs (Rs, 2004-05 prices) 9 Table1.9A Year wise Per capita Own Revenue of ULBs (Rs, 2004-05 prices ) 10 Table1.10A Year wise Per capita Transfers of ULBs (Rs, 2004-05 prices) 11 Table1.11A Year wise Per capita Total revenue of ULBs (Rs,2004-05 prices) 12 Table1.12A Year-wise Per capita Revenue Expenditure of ULBs (Rs,2004-05 prices) 13 Table1.13A Year wise Per capita Capital Expenditure of ULBs (Rs, 2004-05 prices) 14 Table1.14A Year wise Per capita Total Expenditure of ULBs (Rs, 2004-05 prices) 15 Table1.15A Year wise Absolute Property Tax Revenue of ULBs (Rs lakhs, 2004-05 Prices) 16 Table1.16A Year wise Absolute Tax Revenue of ULBs (Rs lakhs, 2004-05 prices) 17 Table1.17A Year wise Absolute Non Tax Revenue of ULBs (Rs lakhs,2004-05 Prices) 18 Table1.18A Year wise Absolute Own Revenue of ULBs (Rs lakhs, 2004-05 prices) 19 Table1.19A Year wise Absolute Transfers of ULBs (Rs lakhs, 2004-05 prices) 20 Table 1.20A Year wise Total Revenue of ULBs (Rs lakhs, 2004-05 prices) 21 Table 1.21A Year wise Absolute Total Revenue Expenditure of ULBs(Rs lakhs,2004-05 22 Prices) Table 1.22A Year wise Absolute Total Capital Expenditure of ULBs (Rs lakhs,2004-05 23 prices) Table 1.23A: Year wise Absolute Total Expenditure of ULBs (Rs lakhs,2004-05 prices) 24 Table 1.24A: Decomposition of Grants (Absolute, Rs lakhs) Received by ULBs of 25 Jharkhand in 2004-05 prices Table 1.25A: Decomposition of Grants (Per Capita, Rs) Received by ULBs in Jharkhand 28 in 2004-05 prices Table 1.26A: O&M Financial Requirements of ULB wise for the years 2004- 31 05 and 2009-10 (Rs lakhs, 2004-05 prices) Table 1.27A Capital Investment Requirements ULB wise fro the year 2004- 32 05 and 2009-10 (Rs lakhs, 2004-05 prices) Table1.28A Ratio of expenditure to financial requirements for the year 2004-05 33 Table 2.1A Matrix of Institutional Set-up and Mechanism of Service Delivery in ULBs 59 Of Jharkhand List of Organisation Charts Chart 2.1A.