MANUAL For Capacity Building of Local Self-Government Institutions in Punjab Centre for Research in Rural and Industrial Development, 2-A Sector 19-A, Madhya Marg, Chandigarh (INDIA) Published by Centre for Research in Rural and Industrial Development 2-A, Madhya Marg, 19-A, Chandigarh - 160019 (India) ISBN No. 81-85835-50-0 ©CRRID July 2006 all Rights Reserved Printed by : Chandika Press Pvt. Ltd. 126, Industrial Area Phase - 1 Chandigarh Cover Design : SaiKriti CONTENT Page PROJECT TEAM PREFACE i ACKNOWLEDGEMENT ii LIST OF TABLES iv EXECUTIVE SUMMARY vi INTRODUCTION 1 CHAPTER 1 HISTORY, STRUCTURE, RESPONSIBILITIES AND 9 CAPACITY OF LOCAL SELF-GOVERNMENT INSTITUTIONS CHAPTER 2 DEMOCRATIC DECENTRALIZATION FOR EMPOWERMENT 57 OF LOCAL GOVERNMENT INSTITUTIONS CHAPTER 3 DECENTRALIZED PLANNING, PEOPLE'S PARTICIPATION 108 AND INNOVATIVE MANAGEMENT PRACTICES CHAPTER 4 DEVELOPMENT AND FINANCING OF INFRASTRUCTURE 148 AND SERVICES: ROLE OF LOCAL SELF-GOVERNMENT INSTITUTIONS CHAPTER 5 ACCOUNTING, BUDGETING AND AUDITING REFORMS 184 FOR IMPROVING FISCAL AND FINANCIAL MANAGEMENT CHAPTER 6 E-GOVERNANCE, MANAGEMENT INFORMATION SYSTEM 218 AND DATABASE PHOTOGRAPHS 254 ABBREVIATIONS 260 PROJECT TEAM Dr. Rashpal Malhotra Project Director Professor Laurent Van Depoele Associate Project Director Mr. JP Gupta Principal Coordinator Dr. BK Pattanaik Project Manager (Rural) Mr. Manoj Kumar Teotia Project Manager (Urban) Ms. Neetu Gaur Research Officer (Urban) Mr. Kulwinder Singh Research Officer (Rural) Mr. Meenal Barua Secretary-cum-Assistant Mr. Sandipan Sharma Accountant Mrs. Anita Gupta Computer Assistant ADMINISTRATIVE ASSISTANCE Ms. Priti Real Mr. Rajesh Sharma Mr. Rajeev Sharma DOCUMENTATION Ms. Suman Khosla LIBRARY Mrs. Meena Jatana COMPUTER ASSISTANCE Mr. Baljinder Singh Mr. Mukesh Kumar PREFACE It is difficult to conceive prefacing a study of a multi-disciplinary nature. The study has been successfully carried out by our centre. However, an attempt has been made to record some important impressions and events that have been formed as well as taken place during the span of one year, the period for which the project was sanctioned by the European Commission. The informal as well as formal interactions that took place between the experts of six member states of European Union and the project team headed by my distinguished colleague Mr. JP Gupta, during this period were both educative and rewarding in learning from experiences of each other and thereby developing strong possibilities of carrying out this programme for the benefit of the people and states of respective countries. The exposure of the project team and also the elected representatives of Local Self-Government and Grassroot Institutions to European countries and the visits of their counterparts to India which comprised eminent experts, parliamentarians and academicians have left a deep impression and the need to widening the sphere of this activity on long-term basis. Though, the project was titled as ‘Capacity Building of Local Self-Government Institutions in Punjab, the in-depth knowledge, experience and concern of distinguished participants and also the colleagues from the partner institutions of Europe have left a deep impression in the minds of all of us that European Union and India can make a significant contribution in widening the relationship in areas of social, cultural as well as economic and scientific co-operation for mutual benefit. This is also the mandate of European Commission to expand the process of co-operation between member states of European Union and India. Amongst notable events, it may be pertinent to record the interest taken by other senior members of the team and on top of it by distinguished members of the Governing Body of the Centre comprising well known scholars, diplomats, planners and administrators. They backed all activities of the project by providing their valuable input to make it a success story that should receive desired consideration by European Commission for its replication elsewhere. Dr. Rashpal Malhotra Project Director - EU India Project Director General - CRRID Chandigarh (India) i Acknowledgement The Centre for Research in Rural and Industrial Development (CRRID) acknowledges the support of several organizations and individuals for the successful implementation of the project and in bringing out this publication. On the first part our grateful thanks are due to European Commission for major funding of this project and in particular Mr. Sylvain MANISSIER, Programme Manager, Delegation of the European Commission to India for providing help and guidance throughout the currency of the project. Our thanks are due to Professor Laurent Van Depoele-Executive Director-Vice President, Study Group for European Policies (SEP) for the collaborative support in the finalization of this publication. The SEP's contributions do need a special mention in organizing study tour of Indian experts to selected member states of European Union. We wish to further place on record our sincere thanks to Mr. Jos Chabert, Vice President of the Brussels Parliament, Professor Frank Delmartino, Mr. Timo Linkola, Mr. Christiaan Van Der Kamp, Mr. Piara Singh Clair, Mr. Jorma Virtanen, Mr. Andew Thomas and Professor Yuri Kazepov for providing active support and contributions and also in making the study tour to European countries a success and presenting their papers in the two National Seminars and the National Conference at Chandigarh. We also acknowledge the policy guidelines and co-operation extended by Mr. Jagjit Singh, Honorable Minister of Local Self-Government and Mr. Surinder Singla, Honorable Minister of Finance, Punjab for sharing their thoughts and addressing the participants of National Seminars and National Conference. We are indeed indebted to Mr. BS Lalli, IAS, the then Secretary, Panchayati Raj, Government of India; Mr. BR Bajaj, IAS, Principal Secretary, Local Self- Government, Mr. JR Kundal, IAS, Principal Secretary, Rural Development and Panchayati Raj, Punjab for providing uninstinted support to this project. Our thanks also due to Mr. G Vajralingam, IAS, the then Director, Local Self-Government Mr. Saravjit Singh, IAS, Director, Rural Development and Panchayati Raj, Mr. Parkash Singh Lambe, Additional Director, Department of Rural Development and Panchayati Raj, Punjab for providing logistic help in organizing the study tours, national seminars and national conference. We further wish to express our gratitude to the Principal Secretaries of Urban Development and also Principal Secretaries of Rural Development and Panchayati Raj of the states of Madhya Pradesh, Maharastra, Gujarat, Karnataka and Kerala for arranging study tour to their respective states. The participants of the study tour to Gujarat are highly thankful to Mr. Narinder Modi, Chief Minister, Gujarat for sparing his time to meet and share his views on urban and rural development in the state of Gujarat. We are also thankful to City Managers Associations of Karnataka and Gujarat; Kerala Institute of Local Administration, Thrissur; All India Institute of Local Self- Government (AIILSG), Yashwantrao Chavan Academy of Development Administration (YASHADA) of Maharastra and Institute of Social and Economic Change, Bangalore for rendering help during the study tours to the respective states. ii We are earnestly thankful to Professor OP Mathur, Professor George Mathew, Professor MP Mathur, and Dr. Mahipal for their academic contributions presenting papers in the National Seminars and National Conference. Our sincere thanks are due to our own esteemed colleague Mr. M Satyapal, Senior Advisor, CRRID for his valuable contribution and assiduously editing the manuscript of the publication by spending long hours spread over several days. Finally, we must acknowledge highly supportive response and co-operation of members of our own faculty, computer, library and administrative staff, without which the successful and timely completion of the project would have been unconceivable. The inspiring intellectual leadership of Dr. Rashpal Malhotra, Director-General, CRRID motivated the project team to put in their best. The various aspects and issues were continuously discussed and debated with him culminating in successful implementation of the project and finalization of this publication. His advice and guidance has been invaluable indeed. Last but not the least, our thanks are due to all the members of the team of this project and to those who have provided help directly or indirectly to this project but preferred anonymity. J P Gupta, IAS (Rtd.) Former Chairman Punjab Finance Commission Principal Coordinator iii LIST OF TABLES Table 1 Growth of Urbanization in Punjab 12 Table 2 Growth Trends in Urbanization in Six States (per cent) 13 Table 3 Trends in Urbanization in Kerala, 1951-2001 14 Table 4 Population of Municipalities in Kerala 14 Table 5 Population of Five Municipal Corporations 14 Table 6 Urban Local Bodies in Karnataka 16 Table 7 Urbanization Trends in Gujarat 18 Table 8 Growth Trends of Urban Population in Class I Towns 18 Table 9 Number of ULBs according to the Size of the Population 19 Table 10 Local and Regional Authorities in Belgium 24 Table 11 Number of Municipalities according to Population Size 24 Table 12 Number of Provinces and Municipalities 25 Table 13 Number of Municipalities and Population Distribution 29 Table 14 Number of PRIs and its Elected Representatives in Progressive Indian States 42 and in Punjab as on 1.4.2004 Table 15 Structure of Population and at different