Urban Local Bodies (ULBs) are institutions constituted for local self-government in urban areas through their elected representatives. Rapid speed of urbanisation in India poses the challenge of improving the lives of urban residents, which needs to be tackled by reforming urban governance and strengthening urban local bodies. Over the last few years, several measures have been taken by the Centre and the state governments in capacity building and overhauling of urban local bodies. These include the following:

Reforms undertaken by the Central Government:

• Enactment of the 74th Constitutional Amendment Act, 1992, to Constitutionally recognize urban local bodies.
• The Ministry of Housing and Urban Affairs has incorporated a Comprehensive Capacity Building Programme (CCBP) to support ULBs under the AMRUT scheme.
• The Municipal Performance Index (MPI) has been released to assess and analyze the performance of Indian municipalities on various parameters from provision of basic public services to more complex domains like urban planning.
• Preparation of a National Municipal Accounting Manual to enhance the capacities of ULBs in municipal accounting. This has led to increased transparency regarding utilization of public funds.

Reforms undertaken by the state governments:

• Rationalization of stamp duty to establish an efficient real estate market with limited barriers on transfer of property.
• Reform in rent control laws to balance the rights and obligations of landlords and tenants and to encourage construction and development of housing stocks.
• Encouraging urban local bodies to make use of municipal bonds to raise funds. Since 1998, local bodies in cities like Nasik, Nagpur, Ludhiana, and Madurai have accessed the capital markets through municipal bonds.
• Repeal of the Urban Land Ceilings Regulation Act, 1976, by states such as Maharashtra for increasing the supply of land in the market and establishing an effective land market.

More steps like implementation of e-governance for transparent administration and property tax collaboration with GIS have been taken. However, the urban local bodies are still fraught with structural and institutional challenges which impede their effective functioning, such as:

• Financial scarcity and corruption: The urban local bodies are facing acute scarcity of finance, as the extent of financial devolution is not commensurate with their responsibilities. Further, some urban local bodies do not collect enough taxes and do not realize the full potential of property tax. Apart from that corruption, favoritism and nepotism are making them inefficient.
• State’s control in urban planning: In most cases, urban planning is done at the state government level and ULBs have little role in it. Also, excessive control of the states over ULBs restricts the functioning of the latter.
• Multiplicity of agencies: Multiplicity of agencies like Jal boards, electricity boards, and other special purpose vehicles engaged in urban administration invariably leads to problems of coordination.
• Inadequately trained personnel: The government functionaries, especially in smaller ULBs, lack exposure to cross learning and to best practices in innovative technologies in areas such as urban planning, citizen participation, municipal service delivery etc.
• Irregular elections: Elections in some ULBs have been postponed for more than six months due to reorganization of ward boundaries, extension of limits, etc. Further, many states do not constitute the State Election Commission at the prescribed time interval.

To address the above challenges, steps like strengthening of Administrative Training Institutes (ATIs) to support the training needs of ULBs, increasing financial devolution and resource mobilization avenues for ULBs, proactive coordination among the Centre, state, and ULBs regarding urban planning, etc. are the need of the hour.