Goa sixth state to complete ULB reforms

Goa became the sixth state in the country to successfully undertake the Urban Local Bodies (ULB) reforms stipulated by the Department of Expenditure (DoE), Ministry of Finance.

Goa is now eligible to mobilise additional financial resources of Rs 223 crore through open market borrowings. The DoE has issued permission for the same.

The state joined five other states, namely, Andhra Pradesh, Madhya Pradesh, Manipur, Rajasthan and Telangana, which have completed the ULB reforms. On completion of this set of reforms, these five states have been granted total additional borrowing permission of Rs 10,435 crore. State-wise amount of the additional borrowing permitted is as under:

  

Reforms in ULBs and the urban utility reforms aim to financially strengthen ULBs in the states and enable them to provide better public health and sanitation services to citizens.

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The set of reforms stipulated by the DoE to achieve these objectives are:

1. The state will notify:

           -Floor rates of property tax in ULBs which are in consonance with the prevailing circle rates (ie guideline rates for property transactions).
           -Floor rates of user charges in respect of the water supply provision, drainage and sewerage which reflect current costs/past inflation.

      2.The state will place a system of periodic increase in floor rates of property tax and user charges in line with price increases.

Given the resources required to meet multiple challenges posed by the Covid-19 pandemic, the Government of India had in May 2020 enhanced the states' borrowing limit by 2% of its gross state domestic product (GSDP).Half of this special dispensation, ie, 1% of GSDP, has been linked to undertaking citizen-centric reforms by the states. The four citizen-centric areas for reforms identified by the DoE were:

1. Implementation of the "One Nation One Ration Card" system
   
2. Ease of doing business reform
   
3. Urban local body utility reforms
   
4. Power sector reforms

Image: The five states have been granted a total additional borrowing permission of Rs 10,435 crore. 

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