Rajasthan- 5th state to complete Urban Local Bodies Reforms

Rajasthan has become the 5th state in the country to successfully complete the Urban Local Bodies (ULBs) reforms. This was specified by the Department of Expenditure, Ministry of Finance.

Benefits

  • Rajasthan now become eligible for additional reform linked borrowing.
  • Thus, the State has been granted permission by the Department of Expenditure an additional financial resource of 2,731 crore rupees.
  • The State will get this amount through Open Market Borrowings.

Other States to complete the reforms

Other states that have completed the Urban Local Bodies Reforms include- Manipur, Andhra Pradesh, Madhya Pradesh and Telangana. In total, these five states have been granted a total additional borrowing permission of 10,212 crore rupees after completing the reforms.

Reforms in ULBs

The Reforms in the Urban Local Bodies and urban utilities reforms were done with the aim of strengthening the finance of the ULBs in the States. It also seeks to enable the states to provide better public health and sanitation services. Once the ULBs are economically rejuvenated it will be able to create good civic infrastructure.

What are those reforms?

The reforms that have been put forward by the Department of Expenditure are:

  1. State is required to notify floor rates of property tax in ULBs as well as the floor rates of user charges with respect of the provision of water-supply, drainage and sewerage.
  2. State needs to place a system of periodic increase in floor rates of property tax or user charges with respect to the price increases.

Background

In the light of covid-10 pandemic, the government had identified Four citizen centric areas for reforms in order to meet the demand of resources. Those areas include- the Implementation of One Nation One Ration Card System, Ease of doing business reform, Urban Local body or utility reforms and Power Sector reforms. 10 States have implemented the One Nation One Ration Card System, 7 States have worked on the ease of doing business reforms while 5 States have implemented the local body reforms; so far.

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