NEW DELHI: India's municipalities are the weakest in terms of funds and resources, Urban Development Minister Venkaiah Naidu said today and promised to explore the possibility of sharing revenue from the proposed GST besides other initiatives to build their revenue-generating capacity.
He expressed concern over the huge urban fiscal gap and emphasised the need for ensuring guaranteed and predictable flow of funds to urban local bodies to enable them to take up reconstruction initiatives.
Addressing a "National Workshop on Governance, Administrative Reforms and Capacity Building" here, he said the country’s municipalities are the weakest in the world in terms of access to resources, financial autonomy and revenue raising capability.
Quoting from a report of the McKinsey Global Institute, he noted that annual per capita income of all municipalities was only Rs 1,430 as against the expenditure commitment of Rs 6,030.
The government is giving priority to enhance required capacities through spending a specific share of cost of each scheme on capacity building, sharing of knowledge and information about best practices, promoting regional hubs for supporting capacity building of urban bodies, Naidu said.
Stressing on the need for predictable and guaranteed resource flows to urban local bodies, Naidu said he will explore the possibility with Finance Minister Arun Jaitley of earmarking a share of revenues from the proposed Goods and Services Tax (GST).
For the success of new urban initiatives, a set of urban reforms will be promoted which include e-governance, creation of a professional municipal cadre, integrated long term urban planning through City Development Plans, devolution of funds and functionaries to urban local bodies, double entry accounting and revision of Building Bye-laws others.
Urban reforms also include improving revenue collections, credit rating of municipalities, energy and water audits and 100 per cent collection, transportation and scientific disposal of municipal waste, the Minister said.
He said smart cities to be developed will be based on India-specific context with focus on bridging infrastructure deficit to enable inclusive and more livable cities. The smart cities seek to ensure efficient utilisation of human and physical resources for cities to drive economic growth.
Naidu emphasised that Public-Private-Partnership model is a crucial vehicle for mobilising huge order of resources required for building smart cities and bridging the huge infrastructure deficit in other urban areas.