Key Challenges and Strategies for Municipal Governance

A municipality is a corporate and political organization established by the local populace to function within a certain geographic area with the aim of offering public services. The objective is to ensure that the citizens should have access to adequate infrastructure and services. It represents grassroots democracy and the concept of democratic decentralization at the local level.

How are Municipalities Governed?

A fundamental basis for the decentralization of rights and authorities to Municipal Organizations at various levels is provided by the ’74th Amendment Act of 1992′. Additionally, the act also added a new Twelfth Schedule to the Constitution. This schedule contains 18 functional items of municipalities. However, the State Legislature is given authority by the Federal Government to determine the composition, duties, and authorities to be given to the local governments to exercise its affairs. In other words, municipalities are the creatures of the state. A municipality may be designated as a city, village, or town.

Although the content and structure of various State Municipal Acts are more or less uniform, there are noticeable differences in the provisions for the devolution of powers, functions, and funds to local governments. This is because these provisions are based on the state and local governments’ respective conditions. Additionally, municipalities have the authority to create local bylaws with a variety of clauses to support municipal administration. This is due to the fact that each urban area has its own unique characteristics. The bylaws are sent to the state legislatures for approval.

Key Challenges for Municipal Governance:

• Despite the 74th Constitutional Amendment Act’s attempts to institutionalize civic agencies, state bureaucrats typically manage them, leading to the steady erosion of their functional scope. 
• The transfer of funds to the urban local bodies (ULBs) has helped these bodies to improve their finances, but there is a huge disconnect between what is needed and what is actually mobilized. As per the RBI survey of 221 municipal corporations (2020-2021), more than 70% of these corporations experienced a fall in revenues, while their expenditures increased by over 71.2%. 
• Octroi, a tax imposed on various items entering a town or city, was once a significant source of income for cities, but it was eventually replaced by grants to urban local authorities based on a demographic profile. Previously, octroi covered about 55% of the total revenue expenditure of urban centers, but today, the grant only covers 15% of spending.
• Despite having Constitutional authority, India’s Municipal administration lacks the mechanism to provide adequate housing, healthcare, sanitation, and means of subsistence. This is largely because of a shortage of funding.
• To put the ideals of good governance into reality, national and regional campaigns on urban governance are being run. However, evidence suggests that these initiatives’ impact and reach are constrained, and a significant number of Indian Municipalities are still not benefitted. 
• The majority of municipalities in India lack the technology and resources necessary to gather desegregated town-level statistics and maintain a database. Consequently, it is challenging to gather data on various municipal aspects and performance indicators.
• There is a paucity of support employees, including secretaries, junior engineers, computer operators, and data entry operators. This has an impact on how they operate and provide services.

Strategies for Municipal Governance: 

• Functional autonomy should be given to these municipal organizations so that they can work without much interference and this should happen with three F’s: the transfer of ‘functions, finances, and functionaries’ to the city governments. 
• An amendment to the 74th Constitutional Amendment Act would give local bodies a clear list of resources that would enable them to deliver services.
• Strengthening of Area Sabhas through financial support is necessary.
• The residents would benefit more from in-situ slum upgradation than from full-fledged housing, if they were given some professional assistance, access to microfinance, and guidance on how to improve their homes.
• To enable better municipal functioning, there is a need to bridge the gap between bureaucrats and Ministries.
• In order to reap the benefits of demographic dividend, the Indian Government should enable urban citizens’ voices by including them in political debates and processes that have an impact on their everyday lives.
• The city governance structures and the requirement for their financial empowerment must be given importance as highlighted in the ’15th Finance Commission report on local bodies’.

To improve local administration, the national government is currently reshaping its narratives. By taking a close look at the local government’s complete institutional, legal and budgetary framework, the fundamental need must be revised. As the ‘Father of the nation’, Mahatma Gandhiji rightly said, “Respect for Human Rights, equality, the rule of law, transparency in the public procedure, a sound democracy, and administrative strength are the fundamental components of ‘good governance'”.