Manipur has become the fourth State to complete urban local bodies reforms and consequently received the Union Finance Ministry’s approval for additional borrowing of ₹75 crore.
Andhra Pradesh, Madhya Pradesh and Telangana are the other three States which have undertaken ‘Urban Local Bodies (ULB)’ reforms stipulated by the Department of Expenditure, Ministry of Finance.
With the completion of the reform, Manipur has become eligible to mobilise additional financial resources of ₹75 crore through open market borrowings, and permission for the same was issued by the Department of Expenditure on January 11, 2021, the Finance Ministry said in a statement on January 12.
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Reforms in the urban local bodies and urban utilities are aimed at financial strengthening of ULBs and to enabling them to provide better public health and sanitation services. Also, economically-rejuvenated ULBs will be able to create a good civic infrastructure, the statement added.
The reforms include the notification of floor rates of property tax in ULBs — in consonance with the prevailing circle rates and floor rates of user charges in respect of the provision of water supply, drainage and sewerage that reflect current costs or past inflation.
In view of the challenges posed by the COVID-19 pandemic, the central government on May 17, 2020, as part of the Atmanirbhar Bharat package, enhanced the borrowing limit of States by 2% of their Gross State Domestic Product (GSDP).
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Half of this special dispensation was linked to undertaking citizen-centric reforms by the States, the statement said, adding that the States could raise additional funds equivalent to 0.25% of GSDP on completion of reforms in each sector.
The four citizen-centric reforms identified were the implementation of One Nation One Ration Card system, ease of doing business reform, ULB/utility reforms and power sector reforms, the Ministry said.
So far, 10 States have implemented the One Nation One Ration Card system, seven have implemented reforms in ease of doing business, and four have implemented local body reforms.
Total additional borrowing permission issued so far to the States that have implemented the reforms stands at ₹54,265 crore, as per the statement.