CHAPTER 3

THANE MUNICPAL CORPORATION AS A STAKEHOLDER

3.1 Introduction

3.2 Geo-physical features of Thane city

3.3 History of Thane's industrial development

3.4 Establishment of Thane Municipal Corporation

3.5 Financial Status of Thane Municipal Corporation

3.6 Challenges faced by Thane Municipal Corporation

3.7 Targets for the Thane Municipal Corporation' 3.8 Suggestions

58

3.1 Introduction

Though a city is defined as an assemblage of non-agricultural elite, the history ofThane city shows that the city has developecl by integration of 32 villages which comprises

even a forest village which have evoked into a continuous habitat.l As a result, the city triesto carry out urban as well as rural functions. Just as urban living poses problems to the peace

and serenity of rural life, rural life-style in an urban area affects efficiency of urban

functions. This is especially visible in terms of, civic amenities, infrastructure and

communications, water supply and sewage, housing and transport.

In order to analyze the socio-economic and political aspects of the urban development

of Thane city, it is very essential to understand the geo-physical and historic perspective ofthe Thane city.

The development of all the four major metropolitan cities in India has strong linkage

with the colonial rule. Whether it is Mumbai's local railway or the development of basic

infrastructure in Delhi or even the tram railway of Kalkatta; all these developments are

associated with the colonial rule. Today however these cities are already packed to capacity

in terms of population and scope for urban development. As a result the population and the

associated development are spilling over to neighboring areas.

Inspite of the expansion of the jurisdiction of the then Bombay Municipal

Corporation in 1956 into Brihan Mumbai Municipal Corporation (Greater Bombay) and

subsequent establishment of Navi Mumbai (New Bombay) across the Thane creek in 1974,

the trend population explosion around Mumbai continued. Northem neighborhood ofMumbai, i.e. Thane, Dombivali-Kalyan and Ulhasnagar are now separate Municipal

Corporations, and are almost contiguous with Mumbai in terms of population settlements. It

is interesting to see how Thane, bordering Mumbai on north-north-east, has developed into

an urban habitat and came to prominence.

3.2 Geo-physical features of Thane city

Thane city is located 30 km North East of Mumbai on the westem coast of India. The

altitude is Plains at sea level. Being on a costal part of the country, the weather is typical

sultry & humid. The humidity is highest in month of August (between 45o/o to B7%). The

average rainfall is between 250 to 300 mm. The monsoon lasts from the beginning of June

till the end of September. Average temperature is between 32 - 37 "C-

59

Thane city is one of the major conglomerations of the Mumbai Metropolitan Region

(MMR) and is well connected to all part of country by rail and road. The city's proximity to

commercial capital of India and the location at geographical center of MMR has given

tremendous impetus to the $owth of industries in and around Thane. Thus in the last two

decades the number of industries have come up in Thane Belapur Industrial Estate, Wagle

Industrial Estate, Kalwa Industrial Estate and Kolshet-Balkum Complex along Thane-

Ghodbunder Road.

Although being a district place, the city has always been shadowed by the existence

of the metropolis just on its outskirts .Spanned over an area of about 747 km2, the population

of the city was 1.55 million (in Year 2003). A total of 200 km of roads run through the city.

The city is sunounded by scenic hills, which add to its beauty. On the other hand is the

Parasik Hill. The city is divided by Thane Creek, a stream of water from the Arabian Sea.

Two road bridges & one Rail Bridge connect the two parts of the city. The creek not only

provides a natural protection to the place but has also facilitated transport of big and small

ships since ancient times. This has also acted as an impetus for the development of local and

international trade since the pre-historic times. Besides being the stamping ground of the

pre-historic tribes, Thane city has a rich cultural heritage, mythological background, followed

by a large number of events of historical importance, archeological collectives that have

contributed to the enrichment of the history of Thane city.

The geographical location of the Thane Ciy is indicated by the map 3.1,3.2 and 3.3

60

Map 3.1: Location of Maharashtra in India

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62

Map 3.3: Map of Thane district indicating the location of Thane city

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63

3.3 History of Thane's industrial development

Till early 1970s, Thane was treated as the 'shadow town' by the policy makers also. It

was looked after as the town to accommodate the spill over population of Mumbai'. Howeve.

since early 1970s, things started changing. Firstly Mumbai started getting over concentrated

by the industries. Because of excessive concentration of industries, the supply side bottle-

necks started occurring and infrastructural constrains were felt. On the other hand the land

rent and the cost of living was increasing rapidly due to the scarcity. All this lead to shift of

the industries towards the outskirts of the Mumbai (mainly to Thane, Navi-Mumbai and

Thane Belapur Industrial Belt). The policies for the decentralization of the industries and

relocating them on the outskirts of the Mumbai started in 1970s. It can be observed through

the establishment of Thane Belapur Industrial belt or beginning of the development of Navi-

Mumbai that it was clearly with the intension of avoiding supply side bottlenecks in Mumbai.

In the recent days, Mumbai Metropolitan Region, Government of Maharashtra,

Industries, Energy and Labour Department, vide Government Resolution No.

ILPll098l4789/IND-2 dated 7/Il/1998 had notified the modification of Industrial Location

Policy in Mumbai Metropolitan Region. Accordingly for the purpose of the revised industrial

location policy, the Mumbai Metropolitan Region has been divided into the following zones:

Zonel: - consisting of Greater Mumbaiand areas of 'l'hane Municipal Corporation and Mira-

Bhayander Municipal Council.

Zone ll: - consisting area of Kalyan and Navi Mumbai Municipal corporations; Ulhasnagar,

Ambernath, Kulgaon-Badlpaur Municispal councils; Bhivandi and Uran sub-regions as

described in Schedule III and Vasai-Virar sub-region as per Notification No. TPS

1287/2753/CR-228-81/UD-12, dated l4th May, 1990. (Schedule IV)

Zone lll: - consisting of the remaining areas of the Mumbai Metropolitan Region, excluding

the areas covered under Zones I and II above.

This clearly indicates that Thane Municipal Corporation as well as Mira-Bhynder

Municipal Corporation are treated as the substitutes to the Mumbai. Schedule I type ofindustries, capital intensive large industries as well as service sector related industries are

encouraged to establish in these areas. As per this GR, new unit, substitute unit for one that

has closed down or relocation of unit from elsewhere; expansion, modernization or

diversification of an existing unit and even expansion of approved industrial estates (having

64

final NoC)/division of gala of structure for Schedule I industries is freely allowed in the area

of Thane MuniciPal CorPoration.

However on observing the present trend of industrialization, the above stated policy

has not helped much in the establishment and relocation of the capital intensive large scale

industries3. This is because as far as the cost of resources (both labour as well as capital) is

concern, Thane is equally costly as that of the Mumbai. Secondly in the present days because

of the technological advancement and modern day tele-communication techniques' there is a

delinking of the production and administrative activities. Thus the actual production activites

where the raw material, other resources like electricity, water and cheap labour is required;

have been shifted to more integral parts of Thane and Raigad district where as the

, commercial establishments, offices and administrative units are confined to the micropolitan

areas like Thane.

It can be observed that except very few large companies like Raymonds, Cadbery,

paper Products or Nicholas Piramil; other small and medium scale companies (especially

those located in the industrial estates and MIDCs) are moving away from Thane main city.

These empty places are getting quickly replaced by the residential cum commercial

establishments, malls and the ITES hubs.

This has got long term implications on the overall urban development of the Thane

city. Its immediate impact is on the labour market. The labour market which was dominated

by the large number of skilled and unkilled labours and the strong unions is getting replaced

by the administrative and managerial work force who has higher economic and social status.

' Thus the economic drivers of the urban development are changing and the new forces are

demanding for the better quality services and the 'value for money'. Thirdly, the social and

cultural communities and the pressure groups are changing and the city has become a 'loose'

bundle of elite class cosmopolitan population.

Hence it is essential to synchronize the modern day out-look of the city with the

traditional set up while undertaking the urban planning for the micropolitan city like Thane.

If one quickly reviews the historical perspective of the urban development of Thane city, it

can be observed that the city has inbuilt genesis of well planned township right from the

ancient records.

The following section is a historical review of the Thane as an ancient township and a

well developed city even much before the establishment of Mumbai.

65

3.4 Urban development of micropolitan ci$' (Thane)

The name "Thane" is said to be derived from Sthan or Sthanaka, the capital of the

Shilahara kings of Konkan. The earlist evidence of Thane appears in the works of the Greek

geographer, Ptolemy, who, in his writings (135-150 AD) refers to a place called

Chersonesus, which, according to researches, is the area around Thane creek. Slabs and

copper plates dating back to the middle ages have also been discovered in Thane. Venetian

traveller Marco Polo also visited Thane in 1290 AD. He describes the city as a great

kingdom, which apparently had a well-developed port, for he mentions a continuous traffic

of ships, and merchants trading and exporting leather, buckram, cotton, and importing horses

and noted'it to be one of the best cities of the rjvorld.'Aparant' is the ancient name of the

' geographical area hosting Thane city. During the Indian expedition of the Greek Emperor

Alexander, a number of philosophers, historians and geographists visited India. Among them

a Greek historian 'Tolemi' has mentioned about the city of Thane in his writings. A place

called 'Ghodbunder' was famous for horse trading thus deriving its name from the word

ghoda i.e. horse and bunder meaning port. During this period a fabric called 'Tansi' was

exported from Thane. From 810 A.D. to 1260 A.D. the Shilahar Dynasty ruled over Thane.

The existence of Thane city appears in the global history since the 9th century A.D.

The city was then known as Shreesthanak. It was more popularly known as the Capital of

the Shilahar dynasty. The history of Thane city can be broadly categorized into 5 eras.

l. Vedic period to 1300 A.D.: Comprising of Hindu or ancient period,Aparant,

Shilahar and Bimba Dynasty. The L)mperors of Shilahar dynasty were disciples of' Lord Shiva and the Kopineshwar Temple has been built during their reign. During

this period, due to the secular attitude and tolerance of Shilahars towards different

religions, a large number of people from different communities like Parsis, Christians,

Muslims and Jews settled down in Thane, thus sowing seeds of a cosmopolitan city.

2. At this time the Shilahars also divided the citv into different sections and named them

as 'padas'. It is seen that these padas exist even today by names of Naupada,

Patlipada, Agripada etc.

In the earlier part of the l2th Century A.D. with a view to create a new

township, King Bimbadev, alongwith 66 segments of his community came over and

66

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settled in Thane. In 1480 A.D. 'sultan Mehmood' of Cujarat made Thane the Capital

of his'Subha' Province.

1300 -1700 A.D.: During this period, the Muslims, Portuguese, Marathas' & the

British dynasties ruled Thane. The Portuguese came to Thane about 1530 and ruled

for over 200 years till 1739. During the same period, St. John the Baptist Church was

constructed in Thane in 1663 A.D. Thane was then known as Cacabe de Tana- Work

on the Thane Fort began in 1730.

1700-1800 A.D.: Maratha and Portuguese Rule. ln 1737 A.D. Chimaji Appa the

Maratha Safdar planned the'Conquest of Vasai' and on 28ft March, 1738 the

Marathas conquered the Thane Killa. The fort is presently being used as 'Thane

Central Jail'. In 1778 the palatial residence of the Peshwas was converted into the

Court building. The Marathas, who conquered Bassein and Thane in 1737 and 1739,

held sway over the region till 1784. when the British captured the Fort and ruled

Thane, then also called Tana. They made it the headquarters of the district

administration with a district collector stationed in Thane.

1800-1947 A.D.: British Rule. The first District Court was established in the year

1803 A.D. The Thane Borough Municipality was established on 10th March 1863

when the city had a population of 9000.

The first ever railway train was started on l6th April, 1853 from Boribunder to

Thane, giving Thane the honour of hosting an event of historical importance in the

city. In the year 1880 the Thane Borough Municipality spent Rs. 12,960/- on

construction of the Pokharan Lake, to make use of the lake water for drinking

purpose. This prestigious project was inaugurated by the then Governor of Mumbai,

Sir Ferguson James. The first elections of the Municipality were conducted in the

year 1885.

The first newspaper in Thane was launched in the year 1866. Different

Marathi magazines like Arunodaya, Survodaya, Vakilancha Sathi, Nyaylahari,

Manohar, Dyanapradip, and Dyanadipika were seen to be in circulation thus showing

the importance of the print media during that period.

The first census took place in the year 1881 and the population of Thane at the

time was 14,456. The Jain temple of Thane was built in the year 1879. The first ever

English medium school was started in 1821 and was named as'Thane English

4.

67

School'. In the year 1893, the first Marathi Library was established. On lgth April,

1910 noted freedom fighters like Veer Anant Laxman Kanhere, Gopal Krishnaji

Karve & Vinayak Narayan Deshpande were hanged till death in the Central Jail for

killing the then Nasik District Collector Jackson. ln 1920 a road near Masunda lake

was named after Dr. F.A. Moose for the commemorative service during the epidemic

of plague. A reputed citizen of Thane Shri Vithal Sayanna's son Divan Bahadur

Narayan Sayanna reconstructed the Civil Hospital building in 1935.

After India's independence, Thane grew slowly and became an industrial town in the

'60s and '70s. There was also a corresponding growth in trade, transport and construction

activities, which picked up tremendously in the '80s. Once considered as the 'ugly twin' of

Mumbai, today Thane outshines Mumbai in its planning and neatness. (Summarization of the

historic review of Thane city in Appendix - 7)

3.5 Establishment of Thane Municipal Corporation

Once historically Significant the city of Thane forms an important urban

agglomeration of Maharashtra state with accelerated industrial development and buzzing

commercial activity. The origin and growth of local self govemment in Thane can be

reviewed as below:

I) Thane Nagarpalika was established on 1Oth March, 1863. Since then it has carried

out development works in various fields in the Pre-freedom & Post freedom era.

II) The Municipal Corporation of Thane came in to existence on lst October 1982.

This gave a new expanded and extended platform for development of the urban

infrastructure. The T.M.C. has an annual budget of Rs. 455 crores and major share

of the Budget goes for development of the city. The population of Thane is

approximately 13 Lakh and it is expected to increase to 50 lakhs in next 25 years.

lll) Since 1982 TMC has carried out multifarious & various development activities

but it's true, incessant & overall development leading to a total transformation

started 5 years back, with the Integrated Road Development Project (IRDP). The

IRDP in itself gave measure thrust to other development activities.

IV) Some of the Landmark Developments / Salient feature

City's health solid waste management department ensures cleanliness

on roads & gutters & at the public places etc. Sanitation & Public Hygiene is

best taken care of. More than 10,000 seats Public toilet of Sulabh type have

68

been constructed and are in use. TMC has proposed upgradation of old

scheme & new sewerage scheme for fast developing areas. Low cost

sanitation scheme for merged rural areas is also in progress. TMC has

independent Pollution Control Department to check air & water quality

through its monitoring stations. The pollution control department helps in

ensuring safe and potable water to almost 99o/o of the population in city. Wel

come gates, Auditorium, swimming pools, stadium, open grounds, gardens,

highmast lighting are some of the other areas where the T.M.c. has created

landmarks. The corporation is very active in beautification of junctions by

providing fountains, channelizers, green chowks, illuminations etc.

For all these infrastructural developments, Thane Municipal

corporation received "clean city" Award from HUDCO India for rggg-2000.

For the first time in India, the corporation used "Bio-remediation" process for

cleaning two main lakes transforming them from dumping pools to scenic &beautiful picnic spots. It has also undertaken the project for additional 100

MLD water supply to augment water supply for projected population upto

20LI & beyond.

citizen Facilitation clentre is recently started to promptly issue

Certificates and Licenses to the Citizens. A computer aided grievance

redressal mechanism is also being made functional. Single window clearance

system has proved to be very effective in grievance redressal.

The corporation runs 56 pre-primary, | 30 primary and 7 Secondary

schools, in addition to one special school for mentally retarded children. There

are 200 private and aided educational institutions of repute. There is 500

bedded chatrapati Shivaji Maharaj Hospital with Rajiv Gandhi Medical

college at Thane, 8 other Hospitals and 20llealth centres of r.M.c., besides a

number of private & charitable clinics and Hospitals. T.M.c. is adding l0more super speciality markets to its existing major markets.

For convenient & easy transport Thane Municipal Coqporation started

its own Transport service in the year 1989. The TMT has a fleet of 289 buses

plying on 38 main routes ferrying approximately 2.5lakhs commuters daily.

69

iel3i:iN" "f i|". r.'p$;. D"y -WA^liit

:

. lBus Depots i2 jBus Stands'l-tiF* r'"""tt";r p;D"y "- ,Vsfrlr- D;iit i.""- :-ffirs*r4rul:ir .?il

Running K.M.

BusNo of Employees

Source: Thane Guide: Thane at a glance

3.6 Financial Status of Thane Municipal Corporation

The financial status of Thane Municipal Corporation is studied by analyzing the total

income and revenue receipts as well as break up of the revenue receipts and revenue

expenditure. According to budget 2006-07, total income for TMC is Rs.567.26 Cr. while Rs.

488 Cr. as net income plus grants and loans worth Rs.78.43 Croress. Major expenses are on

account of underground drainage system, concreting roads, water supply and distribution etc.

The break-up of the total income is given in the table 3.2

Table 3.2: Break up of the total income

Sr. No. Details Provision for year 2006-07 Percentage

I Octroi 2760000000 46.58

2 Land and building tax 938 r 00000 15.83

aJ Water supply 598950000 10.1r

4 Grants / loans 83905 r 000 14.16

5 Property tax and service tax 733 l 36000 t2.37

6 Miscellaneous 56207400 0.95

Total 5925445400 100.00

Source: Thane Municipal Corporation, Outcome Budget 2006-2007

70

Graph 3.1: Break up of the total income

I drlI ld#rcFrfyta(tr lanE/gralbtr sewi@ta(r vtaFradddrqeta<r Mis@lla€ils

It is observed from the graph 3.1 that nearly half of the income is generated from the

octroi. This also indicates the indirect role played by Mumbai in the income generation forThane. Thane is a major linking way between Mumbai and the rest of the world by the road

ways. Hence the large octroi is collected on the account of heavy transportation to and fro

Mumbai as well as within Thane itself. Heavy dependence on the income from octroi is one

of the reasons as to why the octroi is not abolished irrespective of the continuous pressure

from the industrialist and other pressure groups.

The second major source of income is through land and property tax. This can be

once again attributed to the proximity to Mumbai. Since 1990s, the prices of real estate in

Thane have soured like anything. This is mainly because of industrial outsourcing from

Mumbai as well as value addition done during Mr. T Chandrashekhar's (Ex Municipal

Commissioner) tenure in terms of general living conditions of the city. Presently Thane is

one of the preferred locations for residential purpose (even preferred than Mumbai).

The other sizable contributions to the income come from three major sources, viz:

l. Loans / prants: Loans and grants mainly come from state and the central government.

However these grants are mainly project based and hence are irregular in nature.

Secondly these grants have lot to do with the political parties in power and other

pressure groups. The other problems associated with the grants and loans are

discussed in details in the next section.

2. Service tax: Large proportion of income generated from the service tax indicates the

flourishing commercial and service sector activities in the city. While on the one hand

manufacturing activities are slowly moving out from the city, on the other hand71

tertiary activities like retailing, entertainment, retail services are booming. Though it

is an indicator of the growth of the economy, it may not lead to the sustainable

economic development. In the long run it results in increased consumerism,

investment in the unproductive and speculative activities and economic inequality.

Growing city with the absence of secondary sector is going to be a major challenge

for Thane city.

3. Water and drainage tax: Water charges in Thane Municipal Corporation are one of

the highest charges as compared to any other municipal corporation. There are two

reasons behind such significant contribution from this head. One is that, these charges

are levied at the flat rate of per household. Secondly these water charges are included

in the property tax itself for the convenience of collection and for having greater

accountability. No doubt the, it has proved to be one of the major source for the

municipal corporation; however there are many areas in the municipal boundaries

which have the problem of shortage of water supply.

Graph 3.2: Break-up of revenue income

r Octroir property taxtr water chargestr MicellaneousI development tax

Analysis of the revenue income helps to understand the revenue raising capacity ofthe Urban Local Body (ULB). By analyzing the revenue income, one can easily make out

that here also the greater share is from octroi followed by property tax and development tax.

On the other hand, the break-up of the total expenses are indicated in the table 3.3

72

Table 3.3: Break up of the total expenses

Sr. No. Details Provision for year 2006-07 Percentage

Developmental proj ects 2327688000 39.28

2 Salaries and allowances 1600837000 27.02

3 Purchase of water 625000000 10.55

4 Loan repayment 353000000 5.96

) Machinery 282438000 4.77

6 Repairs and maintenance 26236s000 4.43

7 Miscellaneous 295558800 4.99

8 Electricity charges 95590000 L61

9 Administrative expenses 82968600 t.40

5925445400 100.00

Source: Thane Municipal Corporation, Outcome Budget 20064007

Graph 3.3: Break up of the total expenses

I Developnrentalexpences

I Salaries and allowances

tr Water purchase

E Loan repayrnent

I micellenious

I purchase of machinary

The analysis of expenses indicates the developmental and non-developmental

expenses. It also reflects the growth segments, which are getting greater attention from thepolicy makers. From the above diagram it can be concluded that the greater proportion is

spend on developmental expenses. Table 3.4 indicates the break-up of revenue expenditure

73

Table 3.4: Break up of the total revenue expenditure

Sr. No. Details Provision for year 2006-07 Percentage

I Developmental projects 2327688000 39.28

2 Salaries and allowances r600837000 27.02

3 Purchase of water 625000000 10.55

4 Loan repayment 353000000 5.96

5 Machinery 282438000 4.77

6 Repairs and maintenance 262365000 4.43

7 Miscellaneous 295558800 4.99

8 Electricity charges 95s90000 1.61

9 Administrative expenses 82968600 t.40

5925445400 100.00

Source: Thane Municipal Corporation, Outcom@Graph 3.4: Break up of the total revenue expenditure

I Salarieg allowances andpension

lWater purchase

D Education

tr Repair and maintainance

lMisellenious

Imachinary purchase

It is observed from table 3.4 that a part from the developmental expenses (39.28%),

the sizable income is spend salaries and allowances (27.02o/o) followed by the expenditure on

water purchase (1055%) inspite of the fact that Thane district is the major source of water

supply even to Mumbai as well as Thane city has the ample resources of natural water and

sweet lakes.

Loan repayment (5.96Yo) is also a major issue since there are many outstanding loans

which are due for repayment in another five years time.

74

Instead the greater expenses should have taken place on account of infrastructure,

transport and other expenses, which can be o1'direct benefit to the citizens.

In terms of the revenue expenditure the similar trend can be observed where the

greater expenses are on the account of salaries, allowances and pension followed by the

water purchase, education and maintenance expenditures.

3.7 Challenges faced by Thane Municipal Corporation

The major challenge before Thane Municipal Corporation is to match between the

limited revenue resources on the one hand and the growing needs of urbanization on the

other hand. In this context, the economic factors pertaining to Thane Municipal Corporation

can be analyzed in two sections viz the revenue side and the expenditure side.

1. Revenues side of any ULBs can be broadly classified as revenues from own sources and

those from external sources, such as grants from the State and loans. Again, own sources of

revenues can be categorized as tax revenues and non tax revenues. There are specifrc

provisions in the State Acts, regarding taxation powers of the ULBs.

Article 243X of the Constitution, inserted after the 74th Constitutional Amendment

Act (CAA) envisages, that States should devolve additional taxation powers to ULBs, so as

to make them financially competent for discharging the added functional responsibilities,

mandated by the succeeding Article 243W. However, in Maharashtra, there has been no such

devolution of taxation powers, which would have been expected since it would have been in

consonance with the process of decentralization.

Instead, taxation powers of small Ul-tls like that of Thane, regarding octroi have been

withdrawn by the State in March 1999. Hence, the taxation powers of the ULBs are limited

to its traditional sphere and have not gone beyond various existing provisions in the State

Acts. Section 139 of the BMC Act 1888, Section 127 of the BPMC Act1949 and Section

108 of the Councils Act 1965, provides taxation powers of the tILBs regarding following

items.

a) Octroi or Cess on lieu of octroi (Note: This is only for municipal corporations)

b) Property Tax

c) Vehicle tax, tax on boats or animals

d) Sanitary tax upon private latrines cleaned by municipal agency

e) Drainage tax

75

f) Water tax

g) Educational tax

Thus the above list delimits the tax powers of ULBs. However, even within this list

there are provisions in the State Acts that further reduce the flexibility of the ULBs. All other

Municipal Corporations (governed by BPMC Act) have autonomy regarding the rate of tax in

case of components related to water supply and sewerage only. However, there is no freedom

to any Municipal Corporation regarding inclusion of any new component or changing the tax

base to some other, say, area.

Like taxation. the non tax revenues of the ULBs are also limited to conventional

sources such as:

a. Parking fees

b. Permit fees

c. Service fees and user charges

d. Rent from buildings and commercial complexes

e. Development fees for granting permission to construct buildings on vacant plot

f. Other fees and charges etc.

Grants: Many gtants (octroi, profession tax, pilgrim, road etc.) are compensatory in

nature. Those grants are given subsequentto withdrawal of respective taxation powers of the

IJLBs, indicating the centralizing tendencies of the State. In fact, proper revenue-assignment

dictates that taxes, which are local in nature, should be levied by local authorities and not by

the State.

The nature of disbursements grants is purely ad hoc without any legitimate right of

the ULB. This affects the planning of expenditure strategies bythe ULBs. It is observed that

grants from the State do not really help the ULBs in major developinental works, but merely

support their day-to-day functioning.

But more generally, revenues of the ULBs have been throttled by such inherent

structural bottlenecks like, limited autonomy regarding taxation, small bandwidth for non tax

revenues, and unpredictable nature of funds flowing from the State etc. It is important to

remember these handicaps faced by ULBs while evaluating their revenue pattems.

2. Expenditure side - Some of the duties performed by ULBs arc obligatory in nature, while

others, being discretionar!, arte within the autonomy of the ULB. The following is a list of

select important obligatory functions that are traditionally performed by all ULBs.

76

l. Public hospitals and dispensaries, vaccination, epidemic control and prevention of

dangerous diseases, medical relief, family planning and welfare etc.

2. Removing dangerous buildings etc.

3. Solid Waste Management

4. Drainage and sewerage systems

5. Water supply

6. Roads, markets, slaughter houses, washing places, drinking fountains, tanks, wells, etc.

' T.FireBrigade

8. Street Lights

9. Disposal of dead bodies

10. Regulating and preventing offensive and dangerous trades or practices

11. Removing enchrochement on Govemment properties

12. Registering of biths and deaths

13. Primary Schools

14. Welfare measures for scheduled castes and tribes, etc.

15. Establishing and maintaining relief work in times of scarcity or for destitute persons

residing within Municipal limits

, Similarly, the list of a few important discretionary functions is as follows:

1. Public hospitals and homes for destitute and disabled persons

2. Grants and donations to privately run primary and secondary schools

3. Treatment of sewerage and waste

4. Town halls, shops, Dharmashalas, open air theaters, stadiumso rest houses

5. Transport

6. Electricity and LPG supply

7. Ceremonies, fairs, exhibitions etc.

8. Destroy harmful animals

9. Grazing ground, dry farm etc.

10. Welfare of municipal employees

,. 1 l. Sanitary dwellings for the poor

12. Educational institutions

13. Dairies

77

Afterthe 74thCAA, the following six entries from the Twelfth Schedule have been

added to the above described functional domain of the ULBs vide a State enactment in 1994.

which modified the provisions in the four above mentioned Acts.

l. Planning for economic and social development (obligatory)

2. Urban forestry, protection of the environment and promotion of the ecological aspects

(obligatory)

3. Slum improvement and upgradation (discretionary)

4. Urban poverty alleviation (discretionary)

5. Cattle pounds and prevention of cruelty to animals (discretionary)

6. Regulation of slaughter houses and tanneries (discretionary)

However, in spite of such functional devolution to the IJLBs, it has not been matched

by supporting financial devolution. This has lead to too many responsibilities chasing a

narrow resource base.

The major challenge which the Thane Municipal Corporation is facing in terms of

provision of infrastructure to the ever-increasing population.

It is incontrovertible that good infrastructure is central to all economic activity. It

facilitates efficiency in key economic services, improves the economy's competitiveness, and

generates high productivity and supports strong economic growth. Concomitantly, poor

infrastructure can significantly impede economic growth and be a substantial drain on the

economy's resources.

Given the very characteristics of the relevant projects, infrastructure services are often

monopolistic in nature. Investments in this sector are typically bulky, with high upfront costs

and long payback periods. Compared to other projects, the infrastructure sector generates

large positive and negative externalities. On account of this unique characteristic, each

infrastructure project has these additional costs and benefits, which are not easily translated

in the traditional levies that users pay for these services.

It's because of this nature of the infrastructural serviceso the kick-starting

infrastructure projects at the national and stale levels are the priority of policy makers today.

With state funding becoming increasingly difficult combined with. huge lags in crucial

investments in infrastructure attempts are being made to ocommercialese' this hitherto

heavily subsidized government dominated sector. The onset of rapid reforms since 1991, led

78

to considerable activity in terms of projects, policies, regulation and foreign collaborationparticularly in areas ofpower, ports, roads and telecom.

All this is putting tremendous burden on the ULBs who are constitutionally mandated

to provide many of the infrastructure services and amenities. The situation has been furtherworsened by the transfer of additional responsibilities to the third tier of government (ULBs)as a consequence of the 74th Constitutional Amendment Act (CAA). One of the majorconsequences of the economic regimen of the last decade has been the more than

commensurate reduction in resource handouts to sub-national governments especially the

local governments like Thane Municipal Corporation. Thus third tier of government,

comprising the (rural and urban) local bodies, has been hit the hardest.

3.8 Targets for the Thane Municipal Corporation

On the review of the outcome budget of 2006-07, the targets for the current financial year

can be summarized as:

1. Solid waste management: 500 metric tonnes of garbage is generated every day within

the boundary of TMC. Large machinery is involved in the logistics and clearing ofthe garbage. TMC is planning to purchase 46 new vehicles in order to clear the

garbage. It is also planning to start a new plant for garbage processing and recycling.

2. Underground sewerage plan: presently only I4%o of the total area is covered by

underground sewerage system benefitting around 20o/o of the total population.

Sewerage plant at present is processing only 30o/o of the total sewerage. A new plant

for sewerages water treatment plant if planned which should be completed by 200g.

The funding for the same is proposed from the following sources:

A. TMC's own funds:

B. Government grant:

C. Backward region fund:

D. Loan:

r 0.00%

2333%

5.50Yo

61.17%

3. Road construction and concreting: Five years extensive programme is planned forconcreting the road. The tenure for the programme is 2005-2009 whereby Rs.206.35

Cr. will be spend on the road construction and concreting. Rs. 12 Cr. is yearmarked

for the year 2006-2007 in the annual budeer.

79

6.

4.

5.

7.

8.

9.

Traffic reconstruction of Thane railway station area: The provision of Rs. Four Cr. is

done for the programme in the annual budget of 2006-07. This will avoid the traffic

congestion problem and would result into pollution control and conservation ofnatural resources like petroleum.

Backward village development programme: the programme is aiming at developing

the villages nearby the TMC border. These villages are: Waghbill to Owala (in the

North) and Phadakepada, Kardipada, Dieghar to Diva (in the East). Rs. four cr. are

yearmarked for the project. It aims at provided basic infrastructure and services like

water supply, public toilets, primary schools and roads.

Subways, bridges and fly-overs: Construction of subways is planned on the Eastern

Express high-way at Anand Nagar, Nitin company, Cadberry, Teen Hath Naka,

Minatai Thakary Chawk (at Kalwa) in order to reduce the accidents. Rs. 40 Lakhs are

yearmarked for the same.

Widening of the Kopari Bridge is planned to get over by 2006-07. Rs. One crore is

yearmarked for the same. This is going to benefit almost three lakh residents ofThane.

Road widening of Witawa Railway line Bridge is in the final phase and Rs. five

crores and thirty lakhs are yearmarked for the same.

Widening of Mumbra Railway station fly-over is also planned for which Rs. Two

crores are yearmarked.

Hiring of private buses: TMC public transport has 295 buses at present. Looking at

the population of Thane of l6 lakh residents, TMC should have 480 buses (as per the

standards of CIRT, Pune). In order to ridge this gap, TMC has decided to hire the

private buses to use them as the public transport.

Jawaharlal Nehru National Urban Renewal Mission: Central government has selected

60 cities for facilitating the basic urban infrastructure. These grants will be provided

to the projects like Railway station area improvement programme, transport facilities,

underground drainage system etc.

Ring railway: looking at the ever increasing population of the city, the TMC has

planned to have 'Ring Railway' under MRTS (Mass Rapid Transit System). Rs. one

crore are yearmarked for the same during2006-07.

BO

10. Water supply and distribution system: This programme inclucles setting up of new

pipe lines of 351 km. Under this project the city is divided into three parts and 'source

planning' is done.

TMC is also planning to go for water audit as well as energy audit in order to have

better utilization of the natural resources.

ll.Pollution control: in order to get the exact idea about the pollution levels, a

comprehensive survey about Environment Impact Assessment is undertaken between

2006-07.

Lack conservation programme is undertaken where TMC along with the central

government has undertaken renewal of the lakes including Kolbad, Bramhala and

Sidheshwar Lake. Some of the lakes like Railadevi are to be decorated by electrifying

it.

12. Promenade / Hanging garden:

13. Double accounting book keeping system: A committee of Chartered Accountants is

appointed in order to assist and guide the transformation from cash base accounting

system to double entry book keeping system. Focus software package is uploaded for

the same and the cut off date for opening balance is taken as 1.04.2004. Complete

valuation of all assets hold by TMC is done for inventory management.

14. The corporation launched a road development project to increase the number and

length of roads, street lighting, and other amenities.

15. Sanitation 2000 Project uses six private contractors with 482 sweepers to collect solid

waste city-wide.

16. The corporation floated tenders to install a microwave incinerator to properly dispose

of bio-medical waste.

3.9 Suggestions

1. Public Private Partnerships

ln line with global trends, Indian infrastructure scenario too, is witnessing the

changing role of government from its traditional role as a 'provider of services' to a

'Facilitator' of services by ensuring that infrastructure services are actually delivered in a

desirable manner. However there are yawning gaps in the demand/supply equation of each of

these services. For instance, the need for roads, flyovers, recreational social infrastructure

8l

like gardens, swimming pools is not getting fulfilled with the current pace of the local

government.

In such situation, most private sector participation is a variant of the build-own-

operate-transfer (BOOT) arrangement. Herein the private operators finance and build a

project, operate and generate project income and eventually transfer ownership to

government at the end of the concession period.

2. Attracting funding agencies and private capital:

The western Indian State of Maharashtra has offered 35 infrastructure projects worth

US $ 5 billion for private (including foreign) participation. At the Maharashtra Infrastructure

Summit held in Mumbai in 2003, the government of Maharashtra State made a concerted bid

to evoke interest amongst foreign investors. Some of projects which have direct implications

on the development of Thane are as below.

Number Agency Approximate

Cost (in US

$)

Description

173.7 million Mass rapid

transport

system for

Thane city

These ports are

to be developed

at six different

locations along

the state's

Thus more and more capital can be pooled through funding agencies like World Bank

and even from the private capital sources like banks and NBFIs.

3. Ways and Means of Raising Resources

Maritime

Board

Development ofports

Thane

Ratnagiri

Sindhu-

durg

734 million

MSRDC Mass rapid transit

system

82

Howevero improving overall finances of the ULBs in general would involve various steps

like:

The major sources of revenue for the Municipal Corporations are octroi, property tax,

water charges and many other conventional non-tax revenues. Water supply and sewerage

schemes are reflected in a separate budget and accounting system and the money can not be

utilised for other purposes in the 'general kitty'. Octroi is the largest component of income

followed by property tax. Both the sources need some revisions. The recovery percentage ofproperty tax, in its present structure is around 60 to 65 %o in case of Corporations. Hence

there is a scope for further improvement.

Land can be looked upon as a major resource available. It can attract good income

without any other financial support. Development of precious real estate can be a lucrative

source of income for a local body, as illustrated by the "Palika Bazaaf in New Delhi.

Commercial exploitation of lands through construction of offices, commercial complexes and

earning lease rent on them, is a non-conventional source of revenue.

The concept of "Floor Space Index (FSl) Bank" can be also developed and is

implemented in case of Thane Municipal Corporation. The regulations of the ULB could

stipulate a certain level of FSI normally available in a locality and the excess FSI could be

purchased at a premium from the FSI Bank created by the ULB. Evidently, there would have

to be a cap on such use of FSI bearing in mind the ability of the city to absorb additional

construction and provide for city infrastructure.

The concept of contributing amenity spaces in exchange for FSI, equal to the FSI

potential of the land surrendered, can also a method of alternative revenue generation. Thus,

in particular scheme of development, the owner of the land can give away certain percentage

83

of his land for public purposes and get compensated in terms of FSI of that land, and not in

terms of absolute money. The FSI can be utilised on his/her remaining land.

Finally, last dozen years or so have set the tone for paradigm shift in the matter ofrules of the game vis-i-vis policy design in the Indian economy. There is an inescapable

necessity to refashion the older institutions that parameterise the macro policy environment.

In doing so - especially for a developing country like India - the greatest bonus is on

all levels of governments. They need to integrate incentive compatible mechanisms in their

institutional make up. Also, the governance structure has to move towards a decentralised set

up from the heavily loaded centric form. The organs of the state rather than seeing

themselves as rulers of the polity must transform themselves into equal partners with other

stakeholders in the emerging civil society.

Having established the incontrovertible fact of dearth of infrastructure and hence the

need to raise resources to ftnance such infrastructure. one must now address the approaches

and instruments for doing so. As far as the approaches go, there are at least three. One, the

private sector players should be involved, in the frnancing and execution of the projects; two,

the financial products have to be created to raise such resources with the synergy generated

by the co operative efforts of ULBs and different financial institutions. The third approach

has to do with the altemative ways of raising resources intemally, by putting the house in

order. In particular this will involve the rationalization of user charges especially the property

tax.

84

Reference

l. Nair S. and Alvares J.; Thane Guide: a brief history Vol. l;1999

2. Mukhopadhyay Tapati , Shanghai and Mumbai, Samskriti Pub., 2001

3. Sita, K. (1995): Spatial Aspects of Indian Urbanization: The Role of Policy Decisions

- A case study of Maharashtra. IIPS

, 4. Mohan Rakesh , Understanding the developing metropolis, Oxford University press

,1994

5. Thane Municipal Corporation, Annual Budget Outcome, 2006-2007

6. K. Siddartha and Mukharjee S., Cities Urbanization and Urban System, Kisalaya Pub.

Pvt. Ltd., New Delhi, 2000

7. Bhagwati Jagdish and P. Desai, Indian Planning and Industdalization, Oxford

University Press, 1970.

8. Bhende Asha and Kanitkar, Tara(2(102): Principle of Population Studies, Himalaya

Publishing House.

9. Bose, Ashish (1978): India's urbanization 190l-2001, Tata McGraw - Hill

Publishing Company

85