Northern state Rajasthan has become the fifth state in India to successfully complete the Urban Local Bodies reforms. This was specified by the Department of Expenditure (DoE), Ministry of Finance.

Points To Note

  • The state now become eligible for additional reform linked borrowing.
  • Thus, Rajasthan has been granted permission by the Department of Expenditure an additional financial resource of Rupees 2731 crore .
  • Rajasthan will get this amount through Open Market Borrowings.

Other States to complete the reforms

Other states that have completed the Urban Local Bodies (ULBs) Reforms include- Manipur, Andhra Pradesh, Madhya Pradesh and Telangana. In total, these 5 states have been granted a total additional borrowing permission of Rupees 10212 crore after completing the reforms.

Reforms in Urban Local Bodies

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

What are those reforms?

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

Backdrop

In the light of covid-19, the government of India had identified 4 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 (ONORCS), Ease of doing business reform, ULBs or utility reforms and Power Sector reforms. ten States have implemented the ONORCS, seven States have worked on the ease of doing business reforms while five States have implemented the local body reforms; so far.

Rajasthan to complete Urban Local Bodies Reforms