On issues faced by urban local bodies – Staff shortage, financial dependency plague local governance

Source: This post on issues faced by urban local bodies has been created based on the article “Staff shortage, financial dependency plague local governance” published in The Hindu on 1^st November 2023.

UPSC Syllabus Topic: GS Paper 2 Indian Polity – Evolution of powers and finances up to local levels and challenges therein.

News: This article discusses the various issues plaguing the efficient working of urban local self-government bodies.

A detailed article on Local Governments in India can be read here.

What is the constitutional basis of urban local bodies?

The Indian Constitution provides a clear mandate for Democratic Decentralisation through the 73rd and 74th Amendments which seek to create an institutional framework for grassroot democracy through self-governing local bodies in both urban and rural areas of the country.

The 74th Amendment Act pertaining to urban local government was passed in 1992. It came into force on 1st June, 1993.

This added Part IX -A and consists of provisions from Articles 243-P to 243-ZG.

It also added 12th Schedule to the Constitution. It contains 18 functional items of Municipalities and deals with Article 243 W.

What are the various issues with local governments?

1) Issues regarding Funds:
i. A majority of local governments are financially dependent on their State governments.
ii. Except 5 States, all others have to get approval from the State before borrowing money.

2) Issues regarding Functionaries:
i. They also have limited control over who to hire and how to distribute work. Due to this, they are not able to build a strong organisation and ensure accountability from the workers.
ii. Mayors and councils have limited power over staff appointments and promotions. No city has complete power over its staff.

3) Lack of transparency:
i. There is a lack of transparency in publishing cities’ civic information which citizens can access easily.
ii. Only 11 of the 35 States/Union Territories have enacted the Public Disclosure Law that mandates publishing of key civic data.

4) Lack of financial transparency:
i. Data shows that no city publishes a quarterly financial audited statement.
ii. Only 28% of the capital cities disseminate their annual audited financial statements.
iii. None of the major capital cities publish their internal audit information.

5) Vacancies:
i. Due to poor control over the appointment of staff, there is a high level of unfilled posts.
ii. Data shows that 35% of posts in India’s municipal corporations are vacant.

6) Irregular Elections:
i. Elections to the local bodies are often delayed. For a long period of time, there have been no functional local governments in various states.

7) State Finance Commissions not established:
i. SFCs are not established every 5 years as per Constitutional requirements.
ii. Not all recommendations are accepted by State governments.

8) Excessive State Control:
i. There is also strict control exercised by the state government over urban bodies.
ii. Instead of providing guidance and support through the control mechanism, the control turns out to be negative, restricting the functioning of these bodies.

9) Corruption:
i. Corruption, favouritism and nepotism are rampant.

10) Lack of coordination:
i. Poor coordination among centre, state, and various departments at local level leads to poor implementation of urban policies.
ii. Inability to coordinate leads to administrative inefficiency and thus poor urban governance.

Question for practice:

According to various estimates, India’s urban population is expected to grow to upto 60% in the coming decades. However, issues in urban governance are a major roadblock in achieving the desired outcomes. Highlight these issues and suggest ways to tackle them.