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The concept of the elected village administration is perhaps more than a millennium old in Tamil Nadu. But the Dravidian political parties, which have often raised the demand for more state autonomy from the union government, have for decades refuse to honor the principles of federalism when it comes to its urban local bodies (ULBs)

Tamil Nadu has the third-largest economy and it is also the most urbanized state. As much as 54% of its people live in urban areas today, compared to 34% in 1991. In 2002, the state had only 6 city corporations, 102 municipalities, and 611 town panchayats. Now, there are 21 city corporations—after 6 corporations were added in 2021—138 municipalities, and 489 town panchayats.

In the urban local body elections whose results are due today, 12,607 representatives would have been elected by 2.79 crore voters, after a gap of six years. But will this mean anything for local governancewill it empower your elected representatives to improve the facilities in your cities and town? Or is it just a process to get over with?

Unfortunately, even in the recent urban local body election campaigns, Dravidian parties have hardly raised civic issues, instead indulging in political slanging matches. They don’t talk about a master plan to address traffic, air, soil and water and pollution, solid waste management, sewage wastewater management, discharge of industrial effluents and so on.

PMK leader Anbumani Ramadoss has rightly blamed the Dravidian parties for not paying due attention to urban challenges.

In its campaigns, Dravidian parties have hardly raised civic issues, instead indulging in political slanging matches. They don’t talk about a master plan to address traffic, air, soil and water and pollution, solid waste management, sewage wastewater management, discharge of industrial effluents and so on.

To bring about a major change in the way cities and towns are administered, local representatives must be given funds and autonomy to carry out plans according to what their wards’ people want. But despite legislation passed three decades ago to give local bodies autonomy, successive state governments have kept a choke-hold on funds and decision-making powers.

The 73rd and 74th Constitutional Amendments were passed in 1992, which armed urban and rural local bodies with much-needed autonomy in administrative and financial matters. The amendments aimed at giving the power of decentralised governance to the people themselves to build institutions, to deliver services and to improve standards of living.

The state then enacted the Tamil Nadu Panchayats Act, 1994 to replace the earlier Act of 1958. It paved the way for the creation of a district planning committee and the state finance commission (SFC) to aid local bodies. Laws on urban local bodies date back to 1919 and several Acts covering 21 cities now exist. According to Article 243 (A) of the Constitution, the Gram Sabha (village panchayat) has authority equal to the State Legislative Assembly as far as the village administration is concerned. But in reality, state governments have been stifling local self-governance in Tamil Nadu. For example, village panchayat meetings are restricted to just three times a year.

As per Schedule 12 of Article 243 (W) of the Constitution, urban local bodies have 18 responsibilities. Of these, they now have a semblance of authority over only 8 issues. In the past, city corporation commissioners in Tamil Nadu had the power to sanction building plans but now that power has been given to the country- and town-planning authorities and the development authorities of cities.

A 2011 study by MIDS states: “Devolution of funds to ULBs continues to be a major challenge. Despite recommendations of all three State Finance Commissions and the Central Finance Commission, several grants and assigned revenues have not been transferred to the ULBs or have been inadequately transferred.”

Another report, Innovative Resource Mobilisation Practices: A Case of Urban Local Bodies in Tamil Nadu, 2004, states that while the constitutional amendments had mixed results at the national level, Tamil Nadu fared particularly poorly. Comparatively, neighboring Karnataka and Kerala have implemented far better devolution of administrative and financial powers to local bodies.

Since 1994, six State Finance Commissions (SFC) have been constituted by the state government. The 6th SFC formed in 2020 had its tenure extended up to December 2021 but its final report is yet to be made public. Tamil Nadu is supposed to provide 10% of State-owned tax revenue (SOTR) to local bodies, of which 56% is to go to village panchayats and 44% to urban local bodies such as corporations, municipalities, and town panchayats. Though successive state finance commissions in Tamil Nadu have recommended for a greater devolution of funds to local bodies, they have been ignored.

Tamil Nadu is supposed to provide 10% of State-owned tax revenue (SOTR) to local bodies, of which 56% is to go to village panchayats and 44% to urban local bodies such as corporations, municipalities, and town panchayats. States like Kerala devolve 24% of SOTR to local bodies and Karnataka provides 30%.

A 2009 RBI study found Tamil Nadu to be the one of the worst performers when it came to fiscal decentralization. The actual expenditures in local bodies on services and developmental activities continue to be abysmally low. While states like Kerala devolve 24% of SOTR to local bodies and Karnataka provides 30%, even states like Uttar Pradesh and Maharashtra are devolving more funds than Tamil Nadu.

A study on Functional and Financial Autonomy of Local Governments (2017) found that “the two fast reforming states, Andhra Pradesh and Tamil Nadu, are strengthening the state-level governments but the same does not seem to happen with decentralization downwards (to local governments).” There is no organic link between the three tiers of democracy in the country. Successive Union Finance Commissions have also recommended devolving more power to urban local bodies but Tamil Nadu has paid no heed.

The Report of the Fifteenth Finance Commission for 2021-26 states that “unlike rural local bodies, urban areas, especially the cities, typically have the economic power to be financially self-sufficient, with the right legal framework and supportive policies.”

However, the financial status of urban local bodies in Tamil Nadu is such that “several ULBs are unable to meet their own operating expenses.” One of the reasons is that for several years now, the property tax rates have not been revised despite the requests of urban local body representatives. At least from this election onwards, the state government should truly follow the spirit of grassroots democracy and empower urban local bodies and its elected representatives to fulfill the aspirations of the people living in the cities and towns.

(The author is an economist and public policy expert)


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