Shimla, June 24
The 16th Finance Commission is currently on a visit to Himachal Pradesh, engaging with various stakeholders to understand the financial needs and constraints of the state’s urban local bodies (ULBs). On Monday, the members interacted with a consortium of former mayors, deputy mayors, and commissioners from municipal corporations across the state. This consortium, which also included presiding officers of civic bodies, submitted a joint memorandum to the chairman of the Finance Commission, highlighting the critical funding needs for various projects hindered by insufficient central funding.
The memorandum drew on the extensive experience of the former municipal leaders, stressing the urgent need for increased financial support from the central government. It pointed out that intergovernmental transfers (IGTs) to ULBs in India are significantly lower than those in other developing countries, accounting for only 0.5% of GDP compared to 2-5% in nations like South Africa, Mexico, and Brazil. This inadequate funding severely impacts the ability of ULBs to sustain and develop essential urban infrastructure.
Urban local bodies in Himachal Pradesh face unique challenges due to their geographical and economic conditions. The memorandum highlighted several constraints, including poor resource positions due to limited commercial activities, high non-plan expenditures, inadequate resource devolution from the state, and the high costs of asset management. Additionally, the recurrent natural disasters such as climate change-induced floods and landslides exacerbate these financial pressures, leading to significant annual asset losses.
Specific funding requests outlined in the memorandum included grants for the removal of legacy waste, establishment of recycling and compost plants, creation of environmental monitoring centers, and community counseling centers for disaster-affected populations. Furthermore, there was a call for special grants to support urban forestry, heritage conservation, and the development of sustainable urban mobility solutions.
The consortium emphasized the need for a substantial increase in the quantum of IGTs as a percentage of GDP and urged the Finance Commission to consider the specific needs of Himalayan towns. The memorandum proposed a more balanced composition of tied and non-tied funds, particularly for non-million-plus towns, to ensure equitable and predictable financial support for sustainable urban development .
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