URBAN DEVELOPMENT IN PUNJAB

Challenges and Strategies

S.L. Sharma R. S. Sandhu

Manoj K. Teotia

2012

INSTITUTE FOR DEVELOPMENT AND COMMUNICATION (IDC)

© Institute for Development and Communication, 2012 Published by Institute for Development and Communication, 2012 Sector 38A, Chandigarh - 160 014, India. Tel : 0172-2625941 Fax : 0172-2625942 e-mail : idcindia@idcindia.org web : www.idcindia.org

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ABOUT THE AUTHOR

Ranvinder Singh Sandhu retired as Professor of Sociology from

Guru Nanak Dev University Amritsar. He has been Dean,

Faculty of Arts and Social Sciences, Coordinator of SAP, U.G.C.

Visiting Fellow to the Netherlands (1998), Overseas Fellow of

Human Science Research Council of South Africa (1995),

Visiting Professor in Winona State University, Winona,

Minnesota, U.S.A.( 1991 – 1992), British Council Visiting Fellow

(1990), Head of the Department of Sociology (1989-1991). He has

ten books to his credit which include; Urbanization in India

(2003) Sage Publications, Housing the Urban Poor:Policy and

Practice in Developing Countries (1995), Published

simultaneously by Sage Publications, New Delhi and Zed Books

Ltd., London. He has been Editor of Guru Nanak Journal of

Sociology (1989-1991) and Guest Editor (1998) and member of

Editorial Board of the Habitat International, published by

Pergamon Press, London. He has organized and chaired many

sessions in various International conferences/ World Congresses

held in Vancouver, (2007), Durban (2006), Singapore (2004),

Milan (2003), Brisbane (2002), Montreal (1998), Bielefeld (1994),

Montreal (1992), Madrid (1990),Amsterdam (1988) and New

Delhi (1986). His main areas of interest are Urban Studies,

Housing and Built Environment, Urban Planning and Sociology of

Development.

CONTENTS

Preface

1 Urban Development: Vision and Index 1-12

2 Urbanization in Punjab: Trends and Patterns 13-29

3 Urban Infrastructure and Services 30-59

4 Urban Housing, Slums and Poverty 60-89

5 Urban Governance 90-124

6 Municipal Finances 125-164

7 Towards Reforms 165-189

References 190-196

PREFACE

Urbanization is a prevailing trend of our times. A favoured project of globalization, it holds the key of economic development and social transformation, provided it is managed with a vision.

Punjab has emerged as one of the fast urbanizing states in India. However, much of its urbanization is a case of haphazard urban growth rather than planned urban development. As a result, it is faced with critical problems of urban sprawls, regional disparities, ever increasing slums, inadequacy of infrastructure and basic services, acute shortage of housing and environmental pollution and degradation. While all of these are well known challenges posed by rapid urbanization, we do not have accurate information about their magnitude and severity. In the absence of such information, scientific urban planning is not possible. Hence the need for systematic studies of urbanization in Punjab, its contours and patterns, its deficiencies and problems, and its challenges for urban governance, planning and development.

Studies of urbanization may be designed broadly from two perspectives: Town planning and sociological. Town planning perspective is known for its preoccupation with the physical dimensions of urban planning and for its structural – mechanical approach. Unlike that, sociological perspective focuses on social ecologies of urban areas, local cultures, people’s felt – needs and problems and the dense and deeper aspects of social life. It is concerned as much with the quality of social life as that of physical. It favours socially informed vision of urban planning and development.

This monograph is based on a sociologically designed study of urbanization, urban growth and urban development in Punjab. Drawing upon the data derived from both primary and secondary sources, it presents emerging trends and patterns of urbanization in Punjab; the state of urban infrastructure and services: urban housing, slums and poverty; and, urban

governance and municipal finances. Overall, it seeks to identify the critical problems and challenges of urbanization in the state and offers a roadmap of urban development for the future with suggestions for strategic reforms.

This monograph is an expanded and revised version of the study that we did for the Punjab Governance Reforms Commission (PGRC). In the planning and execution of the study we have immensely benefitted from the insightful comments and overall support provided by Dr. Pramod Kumar, Chairman, PGRC and Director, IDC for which we put on record our deep appreciation. We are also greateful to the elected representatives of urban local bodies (ULBs) as well as officials of various ranks who gave us the benefit of their views at our consultation meets. Last but not the least, we would like to take this opportunity to express our gratitude to the staff of PGRC, as also IDC, for their secretarial assistance, to Dr. M.S. Hundal for his help in tabulation and to Mr. Jasmer Singh for typing of the manuscript.

S.L. Sharma

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I

URBAN DEVELOPMENT: VISION AND INDEX

Several reports of the Planning Commission

(1983,1986,2002), National Commission on Urbanization (1988), India Infrastructure Report (NCAER, 1996) and report of the Task Force on Urban Governance and Financing (TFUGF, 2001) have highlighted that India is urbanizing rapidly with concentration of population in larger towns. In the same manner, the National Institute of Urban Affairs observes “Urbanization is a relatively recent but by far the most dominant social transformation of our times. The most impressive feature of India‟s urbanization is its massive size” (NIUA, 1988).

Urbanization is the future of India and so it is of Punjab.

This is evident from the increasing number and proportion of urban population as well as of the cities and towns, both in India and in Punjab. In India, the urban population has grown from one-tenth of the total population in 1901 to more than one-fourth (27.78 percent) in 2001 and to near one-third in 2011 (31.6%). In terms of proportion this increase appears to be insignificant, but seen in terms of absolute numbers, it reflects a rise of eleven times, up from 25 million in 1901 to 285 million in 2001 and to 377 million in 2011, the rise of more than 15 times. Notably, much of this rise has taken place in the last two decades (1991-2011, as 161 million persons have been added to India‟s urban population during this period. As for the number of cities and towns, India has 7935 of them according to 2011 census (provisional). Both the population and number of urban units are expected to rise at a rapid pace. According to the available estimates, India‟s urban population is expected to touch 40 percent by 2021 and cross 50 percent by 2030. Thus, India is experiencing a seismic shift in its make-up with a sizeable segment of people living in urban areas.

Punjab has a higher level of urbanization than the national

level. Its level of urbanization which was 33.95 percent as against

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the national level of 27.78 percent in 2001 has risen to 37.49 percent in 2011 and is likely to reach 45% in 2021. It figures among the top five most urbanized states of India in 2011, as in 2001. It had 157 towns and cities in 2001 which have increased to 217 in 2011 (circular no. 2 of census Punjab). This upward trend of urbanization, both in India and in Punjab, appears to be irreversible; if anything, it is only likely to gain in pace and volume. According to an authentic report “urban expansion in India will happen at a speed quite unlike anything the country or the world has seen before. It took nearly 40 years (between 1971-2008) for India‟s urban population to rise by nearly 230 million. It will take only half the time to add the next 250 million” (MGI: 2008). As with the nation, so with Punjab: “it is likely to be more than 50 percent urbanized by 2030. In 2008 it is guesstimated at 36 percent which will grow to 52 percent in 2030”. (Ibid). Another reason why urbanization is the future of India, including that of Punjab, is that the contribution of urban centres to GDP is continuously on the rise. This is evident from Table-1.

Table–1

Level of urbanization and contribution of urban India to GDP

Year Level of urbanization Urban contribution to GDP

1950-51 17.29% 29%

1970-71 19.91% 37%

1990-91 25.72% 50%

2000-01 27.78% 60%

Source: Computed from J.K. Gupta‟s Status Paper on Urbanization in Punjab, 2001.

MGI report also observes that cities in India are generating

50% of GDP at present which is estimated to rise to 60% by 2021. Besides, cities are also generating 70% of jobs and are home to bourgeoning new middle class in India with higher educational attainments and higher income levels and nuclear households. As for Punjab, cities and towns are generating 70% of GDP already. If these statistics are anything to go by, urbanization seems to be a vital factor in shaping India‟s economy, including that of Punjab.

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A third reason for urbanization holding the key to the future of India, as also of Punjab, is the rapid pace of globalization here. Needless to add that globalization favours urbanization because the latter provides markets which is what it seeks. Given the thrust of globalization on universalisation of culture of consumption, it is only likely to give further fillip to urbanization.

The gathering trend of urbanization notwithstanding,

generally the cities and towns in India as well as in Punjab present a grim picture of haphazard and untidy growth, overcrowding and congestion, slum and squallor and traffic chaos and pollution. It is marked by inadequate urban infrastructure, deficient civic services and acute shortage of housing, having shortage, especially for the poor and the deprived. The following observation of National Commission on Urbanization (1988) seems to be as valid today as in 1988: our urban development is characterized by “irrational land use disposition, inefficient land development and utilization, large-scale physical deterioration, acute housing shortage, both quantitative and qualitative, and above all environmental degradation to varying degrees. While the smaller urban centres remain impoverished and unable to provide even minimum level of infrastructure and services, the larger ones suffer from acute inadequacy of services and distribution, creating zones of extreme deprivation. A new form of urban dichotomy has emerged in which an affluent urban minority flourishes at the cost of a deprived urban majority”. Thus, what we have is a reality of urban growth rather than urban development. The two are not co-terminus, as we will see later. What Punjab needs is urban development which is imperative as much for harnessing the productive potential of cities and towns as for developing them as centres providing for a decent quality of life. The task of urban development today has thus acquired an importance and urgency as never before. In view of this, it signifies a progressive orientation on the part of the Punjab State to constitute this task group on urban development for expediting the same.

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Aims and Methods

The purpose of this work is three-fold:

I to take stock of the existing state of urban growth and development in the state in the context of urban infrastructure, services, housing, slums and poverty;

II to situate the role of governance and assess its performance in this regard; and,

III to advance a vision for future along with required reform inputs in the domain of both urban development and system of governance.

To achieve the above objectives we have largely depended on data drawn from available official records, including Census Reports and Reports of the Central Finance Commission and the Punjab Finance Commissions, among others. Another source which we have banked upon is the IDC report on “Urban Governance” (2007). In addition, we have generated some primary data by holding two consultation meets, one with the municipal councillors and the other with the municipal officials, including state level functionaries, apart from some field surveys conducted by our team mates in some parts of Punjab. Further, we have also devised two methodological tools: an urban development index (UDI) and a quality governance index (QGI) for purposes of the work. More information about the sources and methods of our primary data will be provided at relevant places. Conceptual Framework

To begin with, it is necessary to specify the meanings of the four terms: urban, urbanization, urban growth and urban development. There are two broad conceptions of urban: official and social scientific. Officially speaking, urban is what is defined as urban by the powers that be. In the Indian case, for example, two official conceptions are in use: one that of Census and the other that of municipal act. The Indian Census defines urban as a habitat with a population of 5000 or more, having a density

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exceeding 400 persons per square kilometer, and a predominantly non-agricultural economy with 75 percent of its males engaged in it. The municipal conception projects urban as a place with population density, its rate of revenue generation as specified, and a municipal council or a cantonment board. Their differences of emphasis apart, the two operate hand-in-hand in India. The social scientific conception of urban, on the other hand, envisages it as a complex social configuration representing an „urban way of life‟ which is marked by preponderance of non-agricultural occupations, civic services, secondary/formal relationships, and modernistic value orientations. Unlike the official conception, with its stress on demographic and physical features of urban areas, the thrust of social scientific conception is on the social and civic attributes of urban life. For purposes of this report, the term urban is used in a wider sense that encompasses both its official and social connotations. We cannot but accept the official conception, for all the official data is based on it. However, for developmental purposes the social scientific conception is more relevant, as it provides a normative criterion for defining the quality of urban life, and other things. We, therefore, propose to use the term urban not only as a denominator of the spatial and physical dimensions of urban life but also as a signifier of its social and civic dimensions.

Like the term urban, urbanization is also open to varying

interpretations which may analytically be subsumed under two sets: notional and operational. Notionally, urbanization is viewed in two ways: a) as a process of expansion of the urban; and b) as a process of de-ruralization. The former is too broad and catch-all kind of formulation and lacks a precise criterion. The latter begs the question about meaning of de-ruralization? Does it mean disappearance of rural sites? Or, demolition of villages to raise a town? Or, transformation of rural into an urban site? Or, decline of rural way of life? The trouble with this connotation is that it is premised upon a dichotomy of rural and urban. Such a dichotomy is fallacious. For, the two are just different and the difference is not that of kind but of the scale. They stand in a relationship of dynamic continuum. For the same reason, there is noticeable an upsurge of research interest in rural-urban

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continuum in contemporary social sciences. In operational terms, urbanization refers to expansion of urban sites by way of rise of urban settlements, transformation of villages into towns, enlargement of the existing cities and towns driven by in-migration and organic reproduction, contiguous expansion or urban areas and, above all, percentile growth of urban population. In the present report, the term urbanization is used in its operative sense. Urbanization leads to urban growth which reflects all of the above and more. It relates to size, class, functional type and shape of the towns. It is also about the growth patterns which may be haphazard or planned, zigzag or tidy, linear or lateral, and concentrated or dispersed.

Unlike urban growth, urban development, in the main,

refers to improvement in the quality of urban life, although it carries other connotations too. For a proper understanding of the concept of urban development, it is imperative to project it in relation to the concept of development. The career of the term development has evolved through four conceptual phases: economic growth, sustainable development, human development and inclusive development. Development was first conceptualized as economic growth as measured by increase in GDP or income per capita. And that remains the most common kind of its usage to-date, despite its several authentic critiques. It came under heavy assault from two quarters – ecological and socialist. From ecological perspective, it was criticized for its paradox of “pursuit of infinite growth within finite environment” resulting in ecological degradation and environmental pollution. That paved the way to the emergence of the concept of sustainable development, as propounded in the Bruntland Commission report entitled “Our Common Future”. Almost simultaneously, the economic growth conception was as well indicted for its inherently fallacious assumption that economic prosperity automatically leads to human well being. Consequent upon it, there appeared a revised conception of development as human development. Advanced by Mehbub-ul-Haque as well as Amartya Sen, the human development conception envisages development as improvement in peoples‟ quality of life as a result of enabling opportunities, freedoms, choices, entitlements and

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rights. It represents a paradigm shift insofar as it shifts the focus of development from economy as its unit of analysis to peoples‟ quality of life in all domains, including physical, social and civic. An advance over the previous conceptions by all means, human development conception as well came to be viewed as inadequate when the reality of widening and deepening disparities caught the attention of development analysts. As a result, more recently the term development has taken on yet another connotation, i.e., inclusive development. Inclusive development is about including within the ambit of development the hitherto neglected, deprived, marginalized and the „left behinds‟. It is about bringing them into the mainstream of development by formulating special schemes of improvement in their quality of life. In short, it is about incorporating equity in development by augmenting the access of the urban poor to basic services.

In line with the above conceptions of development, the

term urban development has taken on four corresponding interpretations, i.e., as improvement in the: i) productive potential of urban centres; ii) quality of urban life; iii) lot of urban poor, including that of slum dwellers; and, iv) urban environment. Taken together, urban development is about improvement in urban infrastructure, basic services and urban environment for better quality of urban life, with special concern for the poor and the deprived, as well as for enhancing urban productivity. Urban development, thus, goes beyond urbanization and urban growth. While urbanization refers to expansion of urban sphere and urban growth to percentile increase in urban population, urban development is about improvement in the quality of urban life. Urbanization generally evolves by itself while urban development is essentially a consequence of planned intervention. Both urbanization and urban growth are about physical and quantitative increase in urban area and population, urban development is about socio-economic and qualitative improvement in urban life. We may have rapid and large-scale urbanization and urban growth without having much urban development. In fact, for most part, this characterizes the state of urban affairs in India as much as in Punjab. Hence, the relevance

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of this little elaboration of the distinction between urban growth and urban development.

Urban Development Index

The United Nations Centre for Human Settlements (UNCHS) has devised a City Development Index (CDI) in its document “The State of the World‟s Cities Report 2001”. It consists of indices of city product, infrastructure, waste, health and education. However, it accords pre-eminence to raising the productive potential of the city and the other items follow only as human or physical capital for it. It is too economistic. In fact, that is true of other major works also including the Report of the McKinsey Global Institute, “India‟s Urban Awakening” (2010). The works done at the National Institute of Urban Affairs (NIUA) which have focussed on the norms and standards of basic services (NIUA 2005, Mathur, et al 2007) have as well set their spotlight on the physical and financial aspects of urban development. Intensely aware of the value of such attempts, we would like to foreground the importance of the social and civic dimensions along with the economic and physical in formulating the index of urban development. Thus viewed, urban development index comprises of four parameters, i.e., productivity, quality (of life), equity and sustainability. Productivity is about increase in the city‟s rate of economic growth or productive potential; quality of life is a function the urban citizens‟ level of satisfaction with the infrastructure and civic services; equity is about equal access to services and empowerment of the vulnerable groups; and sustainability is concerned with the state of environment and green cover. We need to devise indicators of the four parameters. Some significant work has already appeared on the indicators of city‟s productive potential. We will, therefore, not devote much attention to that. Here we would focus on quality, equity and sustainability instead. Quality of urban life is influenced by the standard of infrastructure and services. Urban infrastructure has two dimensions: physical and social. The major components of physical infrastructure include water pipelines, sewerage

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network, sewage treatment plant, storm water drainage network, solid waste recovery and treatment, roads, and street lights. The components of social infrastructure are: housing stock, health centres, schools, parks and open spaces, community centres and public conveniences for senior citizens. The services comprise water supply, sanitation, sewerage treatment, solid waste management, road maintenance, street lighting, public transport, health care, education and affordable housing. The separate listing of infrastructure facilities and civic services notwithstanding, the two are so inter-dependent that they may be put together. Table-2 lists the components of infrastructure services and their basic standards/benchmarks.

Table–2

Infrastructure services and their basic standards/benchmarks.

Infrastructure services

Components/indicators Basic

standard/ benchmark

Water supply

Coverage of water supply 100%

Per capita supply of water per day 150 litres

Continuity of water supply 24 hours

Quality of water supplied 100% safe

Sewerage and waste water management

Coverage of sewerage services 100%

Coverage of toilets 100%

Coverage of waste water network services

100%

Collection efficiency of waste water

100%

Waste water treatment capacity 100%

Quality of waste water treatment 100%

Extent of reuse and recycling of waste water

20%

Solid waste management

Household level coverage 100%

Extent of municipal solid waste recovered

100%

Efficiency of collection of municipal solid waste

100%

Segregation of municipal solid waste

100%

Extent of scientific disposal of municipal solid waste

100%

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Infrastructure services

Components/indicators Basic

standard/ benchmark

Storm water drainage

Coverage of storm water drainage 100%

Incidence of water logging (flooding)

Zero

Streetlights Street lights and their maintenance 100%

Road maintenance

Maintenance of municipal roads/streets

100%

Coverage of pucca roads/streets 100%

Menace of stray dogs and cattle on the road

Zero

Local public transport

Extent of availability 50% total trips

Area connectivity 100%

Bus shelters and their maintenance 100%

Public Health

No. of hospital beds per 1000 5

Standard of sanitation and hygiene in public toilets

100%

Education Student-teacher ratio in primary schools

30

Housing

Affordable housing 100%

Housing with basic structural facilities like toilets and baths

100%

Floor area per person 18 sq. mtr.

Housing connected with civic services like water, electricity, etc.

100%

Source: i) “India‟s Urban Awakening”, McKinsey global Institute, 2010; ii) “Handbook on Standardized Service Level Benchmarks”

Coming to the inclusive dimension of urban development, its indicators may comprise provision of equity in civic services to urban poor and slum dwellers, extent of their access to such services, provision of affordable housing to them, land and funds earmarked for the schemes of housing for the poor, and schemes of slum development, etc. Moving on to the environmental domain, its indicators and basic standards are given in Table-3.

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Table–3 Indicators and benchmarks of city environment

Indicators Basic Standard

Green cover for the city/town 30%

Vehicular pollution control 112 peak vehicles per lane kilometer

Burning of dry leaves, etc. Zero

Cleanliness of roads/streets 100%

Tree felling Zero

Public parks 9 sq. mtr. Per capita

Finally, there is the domain of city productivity. Its indicators may include the extent of capital investment in city‟s productive infrastructure, extent of investment in city-specific economic activity, incentives to attract industry, investment in employment generation, and heritage development, etc.

Perspectives and Approaches

There have appeared two major perspectives on urban development: neo-liberal and political economy. The former envisages urban development in terms of developing the productive potential of cities and towns, i.e., transforming them into engines of economic growth. It hails market-led city and accordingly favours the idea of building world-class cities. It holds a brief for urban renewal providing for world-class infrastructure for the rise of corporate economy and consumerist culture. In short, it patronizes elitist urban development with vibrant malls and multiplexes and gated urban enclaves. Building upon a scathing critique of the neo-liberal perspective, political economy perspective advances an advocacy for inclusive urban development. David Harvey (2008), a protagonist of political economy perspective, has posed an all-important question in his seminal essay “The Right to the City”: who has the right to the city? Only elites and middle classes or the masses and the commoners? Given the special segregation and ongoing displacement of the poor, the deprived, the migrants and the slum dwellers, and given their deplorable conditions of living, the question of their right to the city assumes a critical importance. The urban renewal and reconstruction under the capitalist mode patronized by neo-liberal perspective often results in displacement and dispossession of the millions of poor people and

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slum dwellers and denial of access to municipal services to them, argue the protagonists of political economy perspective (Castelles 1998; Sessan 2000; Harvey 2008). This kind of urban development also provides a safe haven for proliferation of corruption, thanks to a loose nexus between colonizers, officials and politicians who thrive on profiteering from land shortage and construction boom. The losers are people at large. In view of this, political economy perspective upholds the cause of the poor and the deprived and pleads for a move away from “enclaved urbanism” to “inclusive urbanism”.

Next, there need to be distinguished two planning approaches to urban development: advance planning and renewal planning. Advance planning is about raising new towns. These have to be planned in accordance with the advanced principles of town planning which may take into consideration the socio-cultural dimensions of city life as much as the techno-economic and managerial dimensions. It is one thing to view city as an abstract space and plan for its physical development in terms of techno-managerial considerations. It is quite another to envisage city as a social configuration and plan for inclusive development with a focus on equity of access to quality life for all, including the poor and the underprivileged. The best approach is a balanced mix of the two.

Planning for urban renewal is concerned with the redevelopment of the existing towns. Most of them represent a case of organic evolution and have had unplanned growth. Urban renewal therefore poses a huge challenge and is an urgent need for the same reason. While a few metropolitan cities may require mega transformation in order to grow into a world-class city, most of the moufossil towns need incremental improvement. The latter provide both a challenge and an opportunity for the town planners and the urban administrators to devise innovative ways of urban renewal and its management. Preparing master plans for urban development has been a common strategy, but it has not always provided effective solutions to problems of urban redevelopment. The goal of urban renewal may be achieved better if the master plan instrumentality is complemented with socio-economic planning as an integral part of it. More about it later.

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II

URBANIZATION IN PUNJAB: TRENDS AND PATTERNS

It is important to identify the trends and patterns of urbanization in Punjab as these may have significant implications for designing and managing urban development here. The trends have been gleaned from the reports of Census of India, including the provisional totals of rural-urban population in Punjab released by Census of India 2011. The trends are presented here in terms of decadal increase in urban population in the state, decadal growth rate of urban population here in comparison with the national rate, the decadal increase in the number of urban centres, and the inter-state rank of Punjab on urbanization. Similarly, the patterns are discerned in terms of spatial distribution of urban population, including its district-wise, class-wise and region-wise concentrations. Finally, an attempt is made to highlight some of the distinctive features of urbanization in Punjab which have implications for urban planning and development in the state. Trends

Punjab is in the midst of rapid urbanization. This is evident from the significant increase in its urban population, in the number of towns and expansion of urban centres in the last two decades. Table-1 is instructive in this regard.

Table–1 Urbanization in Punjab during 1951-2011

Year Total

population Urban

population

Percentage of urban

population

Decadal growth of

urban population

(%)/ absolute

Total number of UAs/ towns

Annual compound growth rate (ACGR(%)

Total Urban

1951 9,160,500 1,989,267 21.72 20.02/ 331,853

110 - -

1961 11,135,069 2,567,306 23.06 29.06/ 578,039

106 1.96 2.78

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Year Total

population Urban

population

Percentage of urban

population

Decadal growth of

urban population

(%)/ absolute

Total number of UAs/ towns

Annual compound growth rate (ACGR(%)

Total Urban

1971 13,551,060 3,216,179 23.73 25.27/ 648,873

106 1.98 2.27

1981 16,788,915 4,647,757 27.68 44.51/

1,431,578 134 2.16 3.75

1991 20,281,969 5,993,225 29.55 28.95/

1,345,468 120 1.90 2.57

2001 24,289,296 8,245,566 33.95 37.58/

2,252,341 157 1.82 3.24

2011 27,704,236 10,387,436 37.49 25.98/

2,141,870 217 1.32 2.34

Source: Census of India

The urban population in Punjab has grown from 19.89 lakhs in 1951 to 103.87 lakhs in 2011 while it constituted 21.72 percent of the total population in 1951 it has risen to 37.49 percent in 2011. Not so striking in terms of percentile growth, it is huge in terms of absolute numbers. Further, the table depicts a trend of continual decadal gain of roughly 2 percentile points upto 1991 with the solitary exception of the decade of 1971-81. In the two decades following 1991, however, the decadal percentile gain has doubled to 4 percentile points with each decade. This indicates accelerated pace of urbanization in Punjab during the last two decades. Little wonder that in terms of absolute numbers urban areas gained by 22.5 lakh persons in the decade of 1991-2001 and 21.42 lakh persons in 2001-2011 against 13.5 lakh persons in 1981-91. Like the growth of urban population, the number of urban areas/towns has also registered an upward trend. From 110 towns in 1951 the number of towns has more than almost doubled in 2011, making a tally of 217, to be exact. Most of this growth has taken place during the last two decades with addition of 37 towns during 1991-2001 and 60 towns during 2001-2011. Out of 217 towns, 143 have statutory status and 74 are non-statutory, i.e., census towns. Incidentally, the number of census towns has grown nearly four times during the decade from 19 in 2001 to 74 in 2011.

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Moving to rural-urban distribution of Punjab population and the decadal growth rates of rural and urban Table-2 is revealing.

Table-2

The decadal growth rates of rural-urban population in Punjab

Particulars Population distribution Decadal growth rate

1991 2001 2011 (1991-2001) (2001-2011)

Total 20,281,969 24,358,999 27,704,236 20.10

(4077030) 13.73

(3345237)

Punjab urban

5,993,225 8,262,511 10,387,436 37.86

(2269286) 25.72

(2124925)

Punjab rural

14,288,744 16,096,488 17,316,800 12.65

(1807744) 7.58

(1220312)

Source: compiled from Census of India data Note: figures in parenthesis show net population increased in the decade

Punjab‟s total population in 2011 stands at 27,704,236 persons of whom 17,316,800 reside in rural areas and 10,387,436 in urban areas. Accordingly, rural population accounts for 62.51 percent of the state‟s population whereas urban population constitutes 37.49 percent. The figures further show a trend of decline in the growth rate of total population as well as of both rural and urban. Yet the decadal growth rate of urban population is quite high. Migration is an important factor affecting the growth of urban population. In the context of Punjab, it takes three forms: out – migration, in – migration and internal migration from rural to urban areas. Out – Migration has always been a special feature of Punjab. The craze of Punjabi people for foreign shores shows no signs of abetment. The recent decades are, however, marked by a significant dynamics of in-migration. These have witnessed a huge influx of migrants from other states of India, including Uttar Pradesh and Bihar, among others, thanks to green revolution and development of hosiery and other industries here. The decade of 1991-2001 is reported to have received around 45 lakh migrants. However, their number has drastically fallen to less than 25lac in the decade of 2001-2011, due to rapid pace of socio economic development in Bihar initiated by the visionary leadership of Nitish Kumar. A more relevant factor accounting for the higher

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rate of growth of urban population vis-a-vis the rural is the migration from rural to urban areas. This is indicated by the higher rate of growth of urban population in the current decade which is reported to be 25.72 percent, nearly double that of overall growth rate (13.73%) and triple that of the rural (7.58%) growth rate. Contrary to this, further analysis of Table-2 reveals that urban growth rate in 2001-2011 has declined by 12.14 percent as compared 1991-2001 whereas rural growth rate of Punjab has declined by 5.07 percent only. On the other hand, national urban growth rate has improved in the present decade. For the first time in the history of India, total increase of urban population is more than the increase in rural population in the present decade. But in case of Punjab, due to low urban growth rate in the state, absolute increase in urban population is lesser than the previous decade. In 1991-2001, migration was considered as one of the major factor of urbanization, but in the present decade the role of migration seems to have declined 60 villages have graduated as census towns in 2011 and this may be one of the major factors of increase in urban population, besides natural increase, change of municipal boundaries and migration. As earlier, Punjab‟s level of urbanization continues to be higher than the national average, as can be seen from Table-3 and figure 1.

Table-3

Urbanization in Punjab and India during 1951-2011

Year Percentage of urban population

Punjab India

1951 21.0 17.29

1961 22.9 17.97

1971 23.7 19.41

1981 26.1 23.34

1991 29.7 25.72

2001 33.95 27.78

2011 37.49 31.16

Source: i) Census of India 2001, Series-4, Punjab, provisional totals, paper-2 of 2001, Rural-urban distribution of population. Govt. of India, New Delhi, p.27.

ii) Census of India 2011, Provisional Population Totals.

-- 17 --

Figure – 1 Urbanization in Punjab and India during 1951-2001

Right since 1951 Punjab has always maintained its lead over the nation in its level of urbanization. Like in 2001, in 2011 again Punjab‟s percentage of urban population continues to be 6 percent higher than the national average.

Punjab also figures among the highly urbanised states in

India. Table-4 is indicative of it.

Table-4 State-wise percentage of urban population in India

State Percentage of urban population

2001 2011

Jammu and Kashmir 24.85 27.21

Himachal Pradesh 9.79 10.04

Punjab 33.95 37.49

Chandigarh 89.78 97.25

Uttaranchal 25.59 30.55

Haryana 29.00 34.79

Delhi 93.01 97.50

Rajasthan 23.38 24.89

Uttar Pradesh 20.78 22.28

Bihar 10.47 11.30

-- 18 --

State Percentage of urban population

2001 2011

Sikkim 11.10 24.97

Arunachal Pradesh 20.41 22.67

Nagaland 17.74 28.97

Manipur 23.88 30.21

Mizoram 49.50 51.51

Tripura 17.02 26.18

Meghalaya 19.63 20.08

Assam 12.72 14.08

West Bengal 28.03 31.89

Jharkhand 22.25 24.05

Orissa 14.97 16.68

Chhatisgarh 20.08 23.24

Madhya Pradesh 26.67 27.63

Gujarat 37.35 42.58

Daman & Diu 36.26 75.16

Dadra & Nagar Haveli 22.89 46.62

Maharashtra 42.40 45.23

Andhra Pradesh 27.08 33.49

Karnataka 33.98 38.57

Goa 49.47 62.17

Lakshadweep 44.47 78.08

Kerala 25.97 47.72

Tamil Nadu 43.86 48.45

Pondicherry 66.57 68.31

Andaman & Nicobar Islands 32.67 35.67

INDIA 27.78 31.16

Punjab has kept its momentum and continues to stay in the

league of the most urbanized states after Mizoram (51.51%), Tamil Nadu (48.45%), Kerala (47.72%), Maharashtra (45.23%), Gujarat (42.58%) and Karnataka (38.57%).

It is further notable that Punjab is the most urbanized state

in the northwest region of India, as is clear from Table-5.

-- 19 --

Table-5 Highest level of urbanization in Punjab in Northwest India

State

Urban population (%) Decadal variation of urban

population (%)

1971 1981 1991 2001 2011+ 1971-81 1981-91 1991 -2001

2001 -2011

Himachal Pradesh

6.99 7.61 8.69 9.79 10.04 +34.76 +37.80 +32.43 15.80

Jammu & Kashmir

18.59 21.05 23.83 24.88 27.21 +45.86 +45.94 N.A.* NA

Haryana 17.67 21.88 24.63 29.00 34.79 +59.47 +43.41 +50.79 44.27

Punjab 23.73 27.68 29.55 33.95 37.49 +44.51 +28.95 +37.59 25.98

India 19.91 23.31 25.71# 27.78# 31.16 +46.39 +36.24 +31.13 32.28

Source: Census of India, 2001 and 2011 (Punjab, Haryana, Himachal Pradesh, Chandigarh and India) Note: i * decadal variation of J&K for 1991-2001 is not available as census of 1991 was

not conducted in J&K due to disturbed law and order situation. ii # includes projected population of J&K iii + provisional population total Census 2011.

With 37.49 percent of urban population Punjab tops the list

of other states in the northwest region followed by Haryana with 34.79 percent urban population.

Patterns

The pattern of geographical distribution of the urban population in the state depicts a marked disparity in the level of urbanization among the various districts. This can be observed in Table-6.

Table-6 District-wise proportion of urban population to total population in

Punjab

Districts Proportion of urban population

to total population in district Decadal growth of urban

population (%)

1991 2001 2011 1991-2001 2001-2011

Ludhiana 51.81

(20.74) 55.80

(20.51) 59.14

(19.85) 36.05 21.79

Jalandhar 40.63

(11.19) 47.45

(11.24) 53.18

(11.17) 38.28 24.50

Amritsar 34.08

(14.25) 40.00

(14.91) 53.64

(12.86) 44.01 9.22

Patiala 30.49 (7.78)

34.98 (7.80)

40.27 (7.33)

38.02 18.19

-- 20 --

Districts Proportion of urban population

to total population in district Decadal growth of urban

population (%)

1991 2001 2011 1991-2001 2001-2011

Faridkot 32.95 (2.50)

33.89 (2.27)

35.20 (2.09)

24.91 12.37

Kapurthala 25.76 (2.78)

32.59 (2.97)

34.90 (2.74)

47.14 15.76

Rup Nagar 25.82 (3.88)

32.46 (4.37)

26.02 (1.71)

55.11 -50.93

Bathinda 26.98 (4.43)

29.78 (4.27)

35.99 (4.81)

32.36 42.12

Sangrur 24.80 (6.97)

29.26 (7.09)

31.24 (4.97)

39.91 -11.64

Fatehgarh Sahib

22.17 (1.68)

28.08 (1.84)

30.87 (1.78)

50.26 22.55

Firozepur 25.70 (6.21)

25.81 (5.46)

27.25 (5.32)

20.94 22.52

Muktsar 23.40 (2.55)

25.81 (2.40)

27.99 (2.43)

29.44 27.26

Gurdaspur 21.99 (6.45)

25.46 (6.48)

28.50 (6.30)

38.15 22.41

Mansa 14.85 (1.42)

20.68 (1.73)

21.26 (1.57)

66.84 14.76

Moga 19.13 (2.48)

20.04 (2.16)

22.55 (2.15)

19.38 25.27

Hoshiarpur 17.10 (3.71)

19.66 (3.52)

21.15 (3.22)

30.84 14.64

SBS Nagar 11.00 (0.98)

13.80 (0.98)

20.43 (1.20)

38.49 54.82

Taran Taran NA 11.98 12.63 (1.36)

NA NA

SAS Nagar NA 38.33 55.77 (5.23)

NA NA

Barnala NA 30.47 31.97 (1.83)

NA NA

Punjab (urban) 25.72

Source: Census of India 1991, 2001 and 2011 (provisional totals) Note: Figures in parenthesis indicate percentage of urban population of the district to total urban population of the state

The figures in Table-6 reveal some very remarkable

developments. First, that Ludhiana (59.14%), Sahibzada Ajit Singh Nagar (55.17%), Amritsar (53.64%) and Jalandhar (53.18%) emerge as the top four urbanized districts of the state in 2011. Secondly, the newly created district of Sahibzada Ajit Singh Nagar (55.17%) emerges as the second most urbanized district in Punjab. In the previous decades it used to be Jalandhar. Thirdly, Amritsar which is displaced from no. 2 position overtakes Jalandhar and

-- 21 --

takes 3rd position by pushing Jalandhar down to no. 4. Fourthly, these four most urbanized districts among themselves claim one-half (49.12%) of the urban population of Punjab. Fifthly, taken together, Ludhiana and Amritsar districts account for one-third (32.72%) of the total urban population of Punjab. Sixthly, Taran Taran, another new district, is at the lowest level of urbanization in Punjab. All of this is also reflected in Map-1.

-- 22 --

Map – 1

-- 23 --

Finally, it is interesting to note that some of the districts with a low level of urbanization have started exhibiting higher growth rate, which is even higher than of the more urbanized districts. But this does not mean that the growth rates of more urbanized districts have declined. The top four urbanized districts continue to keep up their higher urbanization pace and base. This is creating imbalances in demography, resources, services and skills etc. Three districts i.e., Taran Taran, SAS Nagar (Mohali), and Barnala were created in 2006. The negative growth rates of two districts i.e. Rupnagar (SAS Nagar was created out of it) and Sangrur (Barnala was created out of it) and substantial slowing down growth rate of Patiala (some areas went to SAS Nagar) and Amritsar (Taran Taran was created out of it) is largely due to bifurcation of these districts.

Table-7

Distribution of urban population with percentage in different classes of towns from 1951-2001

Years Class I Class II Class III Class IV Class V Class VI All classes

1951 3

[33.11] (658,725)

2 [7.73]

(153,719)

17 [26.17]

(520,558)

20 [14.44]

(287,223)

36 [13.18]

(262,197)

2 [5.37]

(106,845)

110 [100.00]

(1,989,267)

1961 4

[38.25] (981,890)

5 [10.15]

(260,707)

23 [28.11]

(721,684)

20 [10.44]

(267,913)

35 [10.38]

(266,439)

19 [2.67]

(68,673)

106 [100.00]

(2,567,306)

1971 4 [40.52] (1,303,128)

8 [15.84] (509,389)

22 [22.20]

(714,176)

31 [13.32] (428,413)

29 [6.84] (219,911)

12 [1.28] (41,162)

106 [100.00]

(3,216,179)

1981 7 [46.38] (2,155,714)

10 [14.39]

(668,780)

27 [20.24] (940,482)

36 [11.28] (524,505)

40 [6.50] (301,905)

14 [1.21] (56,371)

134 [100.00]

(4,647,757)

1991 10

[54.16] (3,246,224)

18 [19.91]

(1,193,171)

25 [12.92]

(774,453)

46 [10.82]

(748,230)

14 [1.72]

(102,945)

7 [0.47]

(28,202)

120 [100.00]

(5,993,225)

2001 14

[58.38] (4,814,405)

19 [16.45]

(1,356,386)

35 [12.50]

(1,030,623)

54 [9.82]

(809,366)

28 [2.52]

(207,891)

7 [0.33]

(26,896)

157 [100.00]

(8,245,566)

2011 NA NA NA NA NA NA 217 (100.00) 10,387,436

Source: Census of India. Note: - 1) Number of towns in each category (without bracket), 2) Percentage population in each class [], 3) Total population in each class () 4) Size of population: . Class I town – 100,000 and above Class II town – 50,000-99,999 Class III town – 20,000-49,999 Class IV town – 10,000-19,999 Class V town – 5,000-9,999 Class VI town – below 5,000

-- 24 --

It will be pertinent here to look at the distribution of urban population in different classes of towns. Table-7 and figure 2 show it all.

Figure – 2 Percentage of urban population in different categories of towns in

Punjab: 1951 – 2001

Source: Computed from Census 2001. Table-7 shows that in 1951, there were 110 towns in the state. There were 3 class I cities, namely, Amritsar, Jalandhar and Ludhiana accommodating one-third (33.11 percent) of the total urban population, another one-third (33.99 percent) was accommodated in 19 class II and III cities, and remaining one-third (32.99 percent) in 76 class IV, V and VI cities. This is indicative of the even distribution of population in cities of different classes, which is usually found in agricultural surplus states. During the decade 1951-61 the cities of first three classes (class I, II and III) gained in number as well as in the proportion of the urban population accommodated in these towns. On the other hand class IV and V and VI towns of the state mainly lost in terms of proportion of the total urban population, declining from 32.99 percent in 1951 to 23.49 percent in 1961. Situation did not change much in the next decade (1961-71).

The number of towns/urban agglomerations increased from 106 to 134 during 1971-81 due to the creation of 29 new towns in 1981. Subsequently in 1991, 21 of these towns were declassified and 7 new towns were created. As such there was a

-- 25 --

net loss of 14 towns i.e. the number decreased from 134 in 1981 to 120 in 1991. Table-7 also shows that in 1991, class I cities increased in number from 4 to 10 and that these cities also increased their share of urban population from 46.38 percent in 1981 to 54.16 percent in 1991. The number of class II towns also increased from 10 to 18 and these towns also gained in terms of their share of urban population. In 1991, 28 class I and II cities and towns of the state together accounted for three-fourths (74.07%) of the total urban population. On the other hand, remaining four classes of towns (class III to VI), which accounted for 43.64 percent of the total urban population in 1971, had only 25.93 percent of it in 1991.

Map – 2 Growth rate of class I towns and spatial pattern of

urbanization in Punjab

-- 26 --

Punjab‟s urban pattern presents a sharp contrast to that of mono-centric urbanization in the states of Maharashtra and West Bengal, where a single metropolis dominates the scene of the state (Dasgupta, 2000). Here, it is relatively spatially dispersed and the biggest city of the state accounts for only one-sixth of the urban population of the state. However, the situation has begun to change in the last few decades which indicate a trend towards concentration of population in the class I cities. At present class I cities accommodate three-fifths of urban population whereas in 1951 they were accommodating only one-third of it. This tendency towards concentration of urban population in a few big cities could be attributed to increasing inequalities in the villages, resulting from the accumulation and transfer of capital by rich farmers in the cities. The major cities and the developed region of the state are economically more vibrant and consequently attract more migrants both from within the state and out of the state which is evident from higher sex ratio in Ludhiana city. It had 189612 total migrants in 1991 out of which about 50 percent were from within the state and remaining were from other states and other countries (Singh, 2001). Now, industrialization is also an additional factor in promoting uneven pattern of urbanization. The spatial pattern of urbanization in Punjab, as shown in Table-7 and Map-3, is revealing in several ways. First, it shows a trend of concentration in class I and class II towns, especially in class I cities. Two of class I cities, i.e. Ludhiana and Amritsar, are already metropolitan cities. The provisional totals further confirm this trend of concentration of urban population in some more towns including Sahibzada Ajit Singh Nagar, among others. This is a disconcerting trend for a number of reasons but chiefly in that it may distort the hitherto existing dispersed pattern of urbanization in Punjab. Nevertheless, the fact remains that large towns have growth faster than the smaller towns and therefore have acquired larger size with all its adverse fallouts of overcrowding, crumbling infrastructure, housing deficit, slum proliferation and above all widening inequalities of resources and benefits.

-- 27 --

Map – 3

-- 28 --

Secondly, the data as well as Map-3 reveal that the towns situated on the Grand Trunk Road and major rail track have emerged as the most urbanized/populated. These include Ludhiana, Amritsar, Jalandhar and Patiala, besides the newly emerging ones like Sahibzada Ajit Singh Nagar and Bathinda. Also, a number of towns/urban agglomerations have come up in the last two decades along the national highway leading to decreasing distances between towns, apart from expansion of the old centres. In short, both minor and major urban centres, especially the latter, are growing along the major transport corridors which also constitute economic backbone of the state. Thirdly and finally, the data in Table-7 and Map-3 reveal a trend of concentration of urbanization in the central Punjab. It is well known that the four most urbanized cities, i.e., Ludhiana, Amritsar, Jalandhar and Patiala, together with a few others form a contiguous belt that constitutes central Punjab. This belt actually divides the state in three broad regions, namely North-Eastern Punjab, Central Punjab and South-Western Punjab, accommodating 15 percent, 60 percent and about 25 percent of urban population, respectively. Clearly, central Punjab emerges as the most urbanized region of the state.

Distinctive Features

According to the provisional totals released by Census of India 2011, 37.49 percent of the population in Punjab is urban by residence. Like the previous decades, Punjab‟s level of urbanization at 37.49 percent in 2011 is higher than the national level of urbanization at 31.16 percent.

There are 217 towns here out of which 143 have statutory status and 74 are census towns. Notable, census towns have grown roughly four times during the decade 2001-2011.

It is the seventh most urbanized state in India.

Almost one-half (49.12%) of the urban population of Punjab is concentrated in the four most urbanized districts, namely, Ludhiana (59.41%), Sahibzada Ajit Singh Nagar (55.17%), Amritsar (53.64%) and Jalandhar (53.64%).

-- 29 --

The urban population of Punjab has increased by 25.72 percent during 2001-2011. The growth rate of urban population is close to twice that of the overall growth rate (13.73%) and three times that of the rural growth rate. (7.58%) This indicates that more of urbanization is taking place by graduation of 60 villages as census towns in 2011 and this may be one of the major factors of increase in urban population, besides natural increase, change of municipal boundaries and migration.

It has 2 metropolitan centres, i.e., Ludhiana and Amritsar and one more may join the league in foreseeable future.

In terms of spatial pattern, urbanization in Punjab is having a linear direction, a ribbon type growth concentrated along the Grand Trunk Road as more than 20 of its urban centres, including both the metropolitan towns and two other populous class I cities, that are located on it.

In terms of regional dimension, the Central Punjab is the most urbanized with 60 percent urban population, South-Western less urbanized with 25 percent and North-Western least urbanized with barely 15 percent.

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III

URBAN INFRASTRUCTURE AND SERVICES

Quality of urban infrastructure and services is an important measure of both urban development and urban governance. For the same reason, if it is necessary to take a look at the existing state of urban infrastructure and services. This will help prioritise the problems and challenges of urban development in the state. For this purpose, we have gathered information from four sources: official documents, survey reports, municipal councillors and officials, including state functionaries, urban authorities, including municipal officials. On the basis of documentary information we have prepared a fact file about infrastructure and services while the survey reports focus on citizens‟ perceptions and their level of satisfaction with the same. For ascertaining the views of councillors and executives we held a one-day consultation meet with each of the two groups separately. The councillors meet was attended by as many as 39 representatives drawn from all types of urban local bodies covering almost all parts of the state. Similarly, the executives meet was attended by 32 officers drawn from both municipal bodies and parastatal organisations. Information was gathered from the two groups by means of a questionnaire individually filled by all the participants and group discussions organized following a workshop modality. These consultation meets yielded rich information and perceptive insights about the perspectives of the councillors and the executives, the partners in urban development. Altogether, we have tried to look at the existing state of infrastructure and services from four lenses, i.e., the factual, the peoples‟ perception, the councillors‟ position and the administrators‟ viewpoint.

Fact File

It will be in order to find out the status of Punjab on the key indicators of infrastructure and services. The official data for

-- 31 --

Punjab is not readily available on some of the indicators. We have, therefore, computed the estimated values on such indicators from whatever scanty information we could get. The following table presents the existing picture.

Table-1

Performance of India and Punjab on key indicators

Indicators Basic

standard India Punjab

Water supply coverage (% population) 100 74 86

Water supply quantity (litres per capita per day)

150 105 150

Sewerage network (% population covered)

100 63 60

Sewage treatment plant (% of sewerage generated)

100 30 40

Storm water drainage (% road coverage) 100 20 5-15

Solid waste management (% of total waste generated)

100 72 15

Share of public transportation (% total trips)

50 30 20

Vehicular congestion (vehicles per lane kilometre)

112 170 170

Parks and open space (square meters per capita)

9 2.7 1.2

Slum population (% total population in cities)

Zero

(Slum Free

Cities)

23.1 23.6

Health care (hospital beds per 1000) 5 2 1.7

Education (student to teacher ratio in primary schools)

30 48 42

Source: 1. Report of the DLG submitted to the Fourth Punjab Finance Commission.

2. Census India, 2001

Two points are worth noting in the above table. One, that on all indicators Punjab‟s scores are generally below the mark. More particularly, this is so in respect of sewerage, storm water drainage, parks and open spaces. About the storm water

-- 32 --

drainage, it may be added that there is no separate network for it except in Mohali. In other parts of Punjab, it is generally connected with the sewerage network. Similarly, parks and open spaces are few and far between in most of the towns. Two, on most of the other indicators, Punjab‟s performance is either comparable with or better than that of India. It is a different matter though that in spite of it Punjab is rated as number one state in availability of infrastructure (Aiyer 2010). There is of course a wide variation in the availability of infrastructure and services between cities and within cities across wards and localities, as we will see later. Water Supply Around three – fourths of the urban Punjab is covered with water supply, as is clear from Table-2.

Table-2

Coverage of population with water supply

Type of towns Number of towns

Coverage of population in percentage

Municipal Corporations 4 70

Municipal Councils Class I 26 74

Municipal Councils Class II 42 77

Municipal Councils Class III 30 79

Nagar Panchayats 32 46

Total 134 71

Source: Report of the Second Punjab Finance Commission (2002).

While the municipal corporations and councils have wider coverage, the nagar panchayats have a poor coverage of 46% of their population. Further, all households in Punjab have access to potable water. However only two-thirds households have access to tap water while the remaining one-third depend on hand pump and other sources, as is reported in Table-3.

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Table-3

Percentage distribution of households by source of drinking water

Source of Water Percentage

Tap 66.81

Hand pump 29.44

Others 3.74 Source: Census 2001

Figure -1 Percentage distribution of households by source of drinking water

Overwhelming majority of them have this service within their houses but there are some households who have to go out to fetch water for themselves as is shown in Table-4.

Table-4

Percentage distribution of households according to location of source of drinking water

Location of Water Source Tap Hand pump Others

Within premises 94.94 87.53 75.68

Near premises 4.16 10.61 15.73

Far away from premises 0.88 0.54 8.57

Source: Census 2001 99.98 98.68 99.88

Source: Census 2001

This situation varies from town to town as also within the same town. Table-5 shows that in case of class I towns 71.40

-- 34 --

percent households have access to water tap facility, in case of class II towns it is 66.07 percent and in class V towns it is minimum i.e. 38.74 percent only. From this it can be concluded that situation of water supply deteriorates as one moves from higher class to lower class of towns with the exception of class VI towns. Usually availability and sources of water depend on the size of population of town. In case of class I towns situation is better, but in small towns it is problematic. Even in bigger towns there are certain areas which lack piped water supply. In Ludhiana city, for instance, 85 per cent population gets piped water supply while 2.5 lakhs population (about 15 %) remains uncovered for water supply by Municipal Corporation Ludhiana. This area is known as undeclared area by the corporation and is inhabited by the slum dwellers.

Table-5

Distribution of households in towns (class-wise) of Punjab according to availability of source of water

TOWN / NO

HH_T Tap %

Age Tap

Hand pump

% Age_ Hand

Pumps

Tube well and

Others

% Tube Wells and

Others

Class I

14 876193 625571 71.40 227687 25.99 29871 3.41

Class II

19 231333 152845 66.07 67742 29.28 10746 4.65

Class III

39 201290 128161 63.67 61450 30.53 11679 5.80

Class IV

54 146657 76683 52.29 62214 42.42 7760 5.29

Class V

29 38481 14909 38.74 20625 53.60 2947 7.66

Class VI

8 309905 224254 72.36 77796 25.10 7855 2.53

Source: Computed from Census 2001.

-- 35 --

Figure – 2 Percentage distribution of households with water taps and class of towns.

In Amritsar city 76 per cent of present population have

access to piped water supply which is not for 24 hours. Low water pressure is common and it is a widespread problem. Many people use booster to get water which is illegal. The Japan Bank of International Cooperation (2006) study revealed that 61 per cent of water is lost in leakages and unaccounted water is 63 per cent in Amritsar Municipal Corporation. This is almost double of the national average of unaccounted water in urban India which is 32 per cent only. Quality of water varies and in many areas of the city contamination of water is common which results in spread of diseases. This situation is more common in old areas and slums of the city.

The fact of inter-city variations in respect of coverage of piped water supply can further be illustrated in the light of the findings of the IDC Field Survey (Gupta et.al 2007). Table-6 provides information about the households without water connections in the six towns of Punjab.

Table-6 Households without water connections

Municipalities Households not connected

Hoshiarpur 24.95

Moga NA

Nakodar 52.1

Nawanshahar 20

Jalandhar NA

Amritsar NA

Source: Gupta and Kapoor, Study of Urban Governance in Punjab, 2007: p. 63. - Average of 3 years - Connections include un-metered and metered both - Figures in percentage

-- 36 --

It is clear from Table-6 that Nakodar has more than one-half of the households without water connections while Hoshiarpur has about one-fourth and Nawanshahar one-fifth. This speaks volumes of the inter-city variations in the availability of water connections.

There exists not only inter-city but also intra-city

variations. For the latter, the above report observes: “…there is substantial intra-city disparities in the ULBs for which data is available. In one case 15 percent of the population is reported to be getting less than 75 LPCD whereas 30 percent is getting more than 150 LPCD. In another ULB 20 percent of the population is getting less than 60 LPCD whereas 30 percent gets more than 100 LPCD” (Ibid 71). It is as well indicative of a great deal of inter-city variations.

Sewerage

The coverage of population with sewerage is 52 percent and it varies with the class of towns, as can be noted from Table-7.

Table- 7 Coverage of population with sewerage

Type of towns Number of

towns

Coverage of population in

percentage

Municipal Corporations 4 57

Municipal Councils Class I 26 63

Municipal Councils Class II 42 41

Municipal Councils Class III 30 14

Nagar Panchayats 32 5

Total 134 52 Source: Report of the Second Punjab Finance Commission (2002)

Once again, lower class towns show lesser percentage of

sewerage coverage. According to the data of Census of 2001 only 47 percent of

households in Punjab are connected with sewerage system, two-

-- 37 --

fifths of them are using pit latrine or other type of latrine and 13 percent households are without any latrine.

Table-8

Percentage distribution of households with sanitation facilities by class of towns

Class I No. of

HH

Type of latrine

% Bath room

% Pit Latrine_

HH

% WC_HH

% Other Latrine_

HH

% No

Latrine_ HH

% CD % OD % ND

14 876193 84.77 19.26 52.01 19.91 8.82 54.42 35.43 10.15

Class II

19 243939 82.08 4.80 14.28 5.25 3.52 46.17 43.82 10.01

Class III

39 213563 81.13 5.90 8.25 5.59 4.63 25.83 63.35 10.8

Class IV

54 136572 83.07 4.05 5.41 2.54 4.73 25.98 69.88 10.51

Class V

29 38481 74.95 1.44 0.97 0.44 1.53 13.7 75.14 14.89

Class VI

8 309905 84.86 5.49 18.35 7.86 3.67 61.39 31.18 8.42

Source: Computed from Census 2001

Table-8 reveals that larger population is served with

sewerage system in Class I towns and this proportion declines in lower classes of towns. In case of Class I towns, 52.01 percent households have water closet connected with the sewerage system. In other classes of towns, except class VI towns, this connectivity declines with the class of town. In case of Class V town less than one-fourth of the households are connected with the sewerage system. The table further reveals that a substantial percentage of household is without any type of latrine like the sewerage connectivity, and the toilet facility also declines with the lower classes of towns. In case of class V towns, for example, more than one-third of the households are without any type of latrine. The same is true of close drainage system: it is better in class I towns than the other classes of towns.

-- 38 --

Table-9 City-wise percentage distribution of households by availability of

bathroom and type of latrines

Name of City

Total number of households

Family Size

Bathroom in house

Pit Latrine

Water Closet

Ludhiana 257370 5.4 83.27 27.02 48.79

Amritsar 175639 5.8 81.54 16.42 45.48

Jalandhar 130499 5.4 89.60 14.26 61.03

Patiala 58298 5.5 92.52 13.79 61.97

Bathinda 41645 5.2 86.60 28.71 38.42

Pathankot 25435 6.6 83.11 14.55 52.55

Hoshiarpur 30231 4.9 85.23 10.75 66.93

Batala 26282 5.6 75.27 13.82 41.64

Moga 24699 5.4 80.82 22.20 48.96

Abohar 22244 5.6 77.36 17.89 52.53

SAS Nagar Mohali

27609 4.5 96.03 0.41 84.44

Malerkotla 17670 6.0 87.03 14.35 58.73

Khanna 18776 5.5 83.90 34.63 35.06

Phagwara 19796 5.2 84.98 12.78 50.15

Source: Computed from Census 2001

Table-9 shows that even in class I towns water closet

facility varies from 35.06 per cent to 84.44 per cent. S.A.S Nagar (Mohali) is the only exception in the state where more than 84.44 per cent have access to sewerage system. In Ludhiana city, only 51 per cent of the local population has the facility of sewerage system (Ludhiana Master Plan). A sizeable segment comprising 4.3 lakhs population does not have any access to the system with the result that they continue to suffer on account of polluted ground water and poor environment around their habitat.

-- 39 --

Figure – 3 Percentage distribution of households with water closet and without

latrine by class of towns

Source: Computed from Census 2001.

According to JBIC Special Assistance for Project formation (SAPROF) report, 62 per cent population of Amritsar city was served by sewerage system in the city. The coverage of population tells us only half the truth. How effectively and efficiently the service is being provided by the local bodies is another question. About one-half of the respondents were dissatisfied with the service, as shown in the section on citizens‟ satisfaction.

Storm Water Drainage

Except SAS Nagar (Mohali) all cities and towns of Punjab lack storm water drainage network. This is a grave lacuna in Punjab urban infrastructure, one that warrants urgent remedial action.

Sewage Treatment

There are no sewage treatment plants in Punjab cities which fully treat the sewage before disposal. A report of Punjab Pollution Control Board reveals that Ropar Thermal Plant was releasing 1,836 million litres a day (MLD) quantity of effluents into the Sutlej whereas the count for the Ludhiana and Jalandhar

-- 40 --

municipal corporations was 500 MLD and 250 MLD, respectively. “The MCs of Makhu, Dharamkot, Zira, Talwandi Bhai and Moga are discharging their sewage through different drains in between Harike and Hussainiwala water headworks, therefore, the water quality has deteriorated from „B‟ to „D‟ there” (Sood 2011).

In Ludhiana the untreated sewage is disposed off into

Buddha Nallah. This disposal degrades the quality of water in Buddha Nallah besides polluting the sub soil water and environment of the city. In Amritsar city, there is no sewage treatment plant and untreated sewage is disposed off in two main Nallahs: the Gandha Nallah to the south of the city and Tung Dhab to the north. This results in polluting the sub soil water and degrade the overall environment of the city, especially in the areas which are located around Gandha Nallah and Tung Dhab.

According to the Fourth Punjab Finance Commission

Report sewerage treatment plants (STPs) of 490 million litres per day (MLD) are operative in 10 towns, of 209.5 MLD are under construction in 5 towns and of 550 MLD are approved for 8 towns, as per the details given in Table-10.

Table-10

Status of STPs in the towns of Punjab

Status of STPs Towns MLDs

a. Functional Ludhiana 311

Jalandhar 100

Kapurthala 25

Phagwara 20

Khanna 10

Nangal 8

Fazilka 8

Malout 3

Sultanpur Lodhi 2.6

Phillaur 2.5

Total 490.1

b. Under construction Ludhiana 155

Jalandhar 25

Ropar 14.5

Samana 10

-- 41 --

Status of STPs Towns MLDs

Nangal 5

Total 209.5

c. Approved Amritsar 190

Bathinda 52

Patiala 46

Ferozpur 30

Pathankot 27

Jalandhar 25

Zirakpur 17

Other towns 163

Total 550

It is clear from Table-10 that only some of the towns in Punjab have got sewerage treatment plants and many are doing without them. Thus, hardly 40 percent of sewerage generated by urban areas is actually treated in the entire state. Solid Waste

According to the World Health Organization (WHO) , waste is defined as any substance or object arising from human or animal activities that has to be discarded as „unwanted‟. Solid waste consists of the discarded portion of household material, dead animal remains, trade, commercial, agriculture & industrial waste and other large wastes like debris from construction site, furniture, etc.

Solid wastes are generally categorized as municipal solid waste, hazardous solid waste, and biomedical solid waste. The total amount of collected solid waste from the districts includes 1108012.25 MT of municipal waste and 6695.57MT of bio-medical waste (PPCB as cited in Statistical Abstract of Punjab, 2007). This is far less than the total waste generated. The volume and composition of solid waste generated in Punjab cities vary from city to city. Domestic sector contributes the most, followed by malba of construction activity, green belt, hospitals and slaughter houses, in that order.

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Disposal is done through land fill sites only. Nothing is done to segregate the waste, nor are road rollers employed to press waste. Consequently, the remains stay uncovered, resulting in environmental pollution of surrounding areas. In certain cases dumping is done in nullahs which are choked during rainy season, thus adding to the woes of those living nearby. Thus, in majority of cases Municipal Corporations do not comply with safety standards. Overall, it is observed that municipal waste is generally left untreated. No proper mechanism exists for its safe disposal. Unmanaged dumping grounds are common sight around cities of the state. Common facility has been developed to cater to the cities of Ludhiana, Jalandhar, Patiala and Amritsar. The common facilities at Ludhiana in Punjab are comprehensive as stipulated in the Act, but at other places common facilities are mainly having incinerators as treatment facility. Segregation is the most neglected aspect.

Biomedical waste is treated but not on a satisfactory scale.

In certain major districts like Ferozepur and Bathinda only 50% is being treated. Similarly, the fastest growing districts like Bathinda and Patiala lack proper disposal of biomedical waste. Similar facts emerge with regard to hazardous waste which is left untreated in industrial hubs of Ludhiana, Jalandhar and Kapurthala. In fact, the Punjab Pollution Control Board (PPCB) has initiated legal proceedings against 10 government and 15 private hospitals operating in Punjab for allegedly disposing off their untreated waste in an irresponsible manner. These hospitals may face criminal charges and could be prosecuted as per law, as the PPCB is determined to press the charges under the Environmental (Protection) Act 1986. (www.cpcb.nic.in/oldwebsite/highlights).

Expenditure on Basic Services

There has always been a huge gap between the

expenditure proposed by the State Finance Commissions and the actual expenditure. Table-11 shows proposed expenditure on water supply, sewerage system, STP, storm water and solid waste management by 3rd Finance Commission and actual expenditure incurred during the years 2006-07 to 2010-11.

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Table-11

Proposed expenditure on infrastructure and services by 3rd Finance Commission and actual expenditure incurred during 2006-07 – 2010-11

(Rs. in crores) Sr. no

Item/ Years 2006-07 2007-08 2008-09 2009-10 2010-11 Total

(2006-07 to 2010-11)

1

Proposed exp. on water supply and sewerage system

380.00 259.00 144.00 150.00 158.00 1091.00

Actual exp. Incurred

106.00 106.68 127.00 271.16 391.56 (projec

ted) 1002.40

2 Proposed exp. on STP

- 105.00 110.00 116.00 122.00 453.00

Actual exp. Incurred

- - 1.02 33.89

27.37 (up to 11/201

0)

62.28

3 Proposed exp. on storm water drainage

- 74.00 77.00 81.00 85.00 317.00

Actual exp. Incurred

1.58 0.20 3.38 3.67 1.57 10.40

4 Proposed exp. on solid waste management

- 105.00 110.00 81.00 85.00 381.00

Actual exp. Incurred

4.50 7.17 7.64 8.39 10.51

(projected)

38.21

5 Total proposed exp. on above schemes

380.00 543.00 441.00 428.00 450.00 2242.00

6 Total exp. Actually incurred

110.50 113.85 135.66 313.44 429.44 1102.89

7 Difference (5-6) 269.50 429.15 305.34 114.56 20.56 1139.11

8 % of actual exp. to proposed exp.

29.08 20.97 30.76 73.23 95.43 49.19

Source: Office of the DLG and The Report of the Fourth Punjab Finance Commission

Table-11 reveals several crucial facts. The most notable of

them all is the recent trend of higher expenditure than the

-- 44 --

proposed on water supply and sewerage. On all other services, however, it is the other way round,. The same is true of all the services taken together. The total expenditure on all the services comes to just about 50 percent of the required. In view of it, the existing scenario of inadequate infrastructure and the resultant poor quality of services is hardly surprising.

Roads and Vehicles

Table-12

Status of roads by size and class of towns 2001

Size and class of urban

centres

No. of urban

Centres

Total Population

Total area (in sq. Kms.)

Total Road

length (in

Kms.)

Road length per 10000

population (in Kms.)

I 14 4819089 763.12 4.91 7.77

II 18 1314224 390.84 2.73 8.12

III 34 1039150 378.35 2.50 9.11

IV 51 768586 354.90 1.73 8.01

V 21 155875 89.13 1.54 8.80

VI 01 4245 5.71 3.15 42.40

Total 139 8101169 1982.05 3.29 8.06

Sources: Computed by Singh (2010) from Census of India, Punjab-2001.

The average road length per sq. km. of urban areas in the state is 3.29. The road length is positively linked with the size of urban centres, except the lowest size category towns: the bigger the size of town the more the road length. It is also positively related with the size of population, with the exception of lowest population category towns. It makes sense in view of the fact that the bigger and more populous towns by their very nature are likely to have bigger road network. Incidentally, the seemingly inverse relationship between the class of towns and road length is due to the categorisation of bigger and more populous towns as higher class, i.e., class I, II, III and smaller ones as lower class, i.e., class IV, V, VI.

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Vehicular Pollution

The number of vehicles is increasing rapidly leading to the rise of vehicular and noise pollution as a serious problem of urban areas. Vehicular exhaust, a by-product of fuel combustion contains chemical compounds such as carbon monoxide (CO2), oxides of nitrogen, oxides of Sulphur and unburnt hydrocarbons which result in environmental pollution and ecological degradation.

In Punjab, the total number of vehicle has increased by

approximately 11.66 times from 3.6 Lakhs in 1980-81 to more than 42 Lakhs in 2006-07 as shown in the figure 4.

Figure 4

Growth of vehicles in Punjab

Source: Statistical Abstract of Punjab, 2007

A comparison of number of vehicles in Punjab with that in other states indicates that Punjab stands among the top ten in India as shown in figure 5.

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Figure – 5 Vehicles in various states of India Figures

Source: Statistical Abstract of Punjab, 2007

There has been a tremendous increase in the number of

small vehicles like two and three wheelers during the last decades in the state. From the year 1980 to 2006, the number of two wheelers has increased 15.73 times while the number of three wheelers has increased 13.69 times. This has generated not only environmental pollution but also increase in accidents. The cities of Punjab lack public transport system which becomes the main cause of traffic and transportation problems in cities. Moreover, vehicles are increasing at a rate higher than that of the road length in the state.

-- 47 --

Health Facilities

Turning to social infrastructure, public health comes first. Punjab has taken bold steps in the improvement of health infrastructure and services. As per 2001 census the state has 2,852 Sub-Centres, 1,465 Subsidiary Health Centres (each having a Medical Officer and a Pharmacist), 484 PHCs, 117 Community Health Centres, and three medical and two dental colleges along with attached hospitals. There are 230 Allopathic hospitals in the state. They range from 50-beds hospitals in smaller towns to larger number of bed-hospitals in higher class cities, attached to the five medical colleges, one each at Patiala, Faridkot and Amritsar and two at Ludhiana. These hospitals are equipped with facilities for dealing with complicated cases and they also serve as referral hospitals and teaching centres (Gupta and Teotia 2002).

The availability of health institutions in the state increased

two times in urban areas between 1966 and 2001. In absolute terms, the total number of institutions rose from 496 in 1966 to 2,229 in 2001, the rural health institutions from 275 to 1,777 and the urban health institutions from 221 to 452. There was considerable increase in the number of rural health institutions during 1973-83, the period during which Sub-Centres and SHCs were set-up by the Government of Punjab on the recommendation of the Government of India. There has been hardly any increase in the number of health institutions since 1985.It has been observed that the percentage share of rural health institutions which was 55.4 per cent among total health institutions in 1966, increased to 64.9 per cent in 1973, 79.1 per cent in 1980, and 81.6 per cent by the year 1990. During the 1990s, there was some additional emphasis on urban infrastructure. As a result, the share of urban health institutions increased slightly from 18.4 per cent to 20.3 per cent. The percentage share in the number of health institutions by ownership among the state government, local self-governments and voluntary organizations is 96.6 per cent, 1.1 per cent, and 2.3 per cent, respectively in 2001.

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Table-13 Health services by size and class of towns 2001

Size –class of towns

Number of doctors

(10000 persons)

Number of nurses

(10000 persons)

Number of para-medical staff ( 10000

persons)

Other personnel

(10000 persons)

Total number of

medical personnel per 10000 persons

Total number of beds

Number of beds

per 10000 persons

I 2.40 3.40 3.96 5.86 15.61 8395 17.42

II 3.00 5.11 8.61 9.70 26.40 2572 19.57

III 2.73 3.50 6.39 4.50 17.12 1345 12.94

IV 2.85 3.71 6.37 5.50 18.42 1253 16.30

V 4.43 7.00 13.34 8.15 32.91 346 22.20

VI 2.36 2.36 4.71 4.71 14.13 4 9.42

Total 2.62 3.78 5.43 6.32 18.15 13915 17.18 Source: Computed by Singh (2010) from: 1. Municipal Statistics, Punjab, 2000-2001, pp.94-104. 2. Census of India, Punjab, 2001.

According to Census 2001, total number of medical personnel and beds in Punjab hospitals were 14706 and 13915 respectively which means one medical personnel and one bed in hospital for 551 and 582 urban residents, respectively. World Health Organization norms of one bed for 200 persons (or 5 beds for 1000 persons). The situation has not changed much in 2010. Table-13 reveals that there are 18.15 medical personnel and 17.18 beds in hospitals after every 10000 persons living in Punjab in 2010. People residing in lower classes of towns have more medical personnel to serve them than their counter-parts residing in higher class of towns. The position of class-I towns is still more depressing because these have to serve larger number of people residing in their service zone. The hospitals in these towns provide multi-speciality services and better facilities that attract people from far-flung areas. These facilities are generally concentrated in private medical institutions while the Governmental health institutions are not in such a good shape. The spatial distribution of health facilities within towns, especially bigger towns, further reveals that the low income areas/slums lack even primary health facilities. In Ludhiana city, for example, 47 per cent slums do not have even lowest level of health care units. As such, the slum dwellers depend on the service of unqualified medical practitioners.

-- 49 --

Table-13 further reveals that on an average there are 2.62 doctors for 10,000 persons in urban Punjab. This is also true in case of number of nurses and para-medical staff and other personnel. Similarly, number of beds are also more in case of class II, and IV towns than class one towns in the state. Higher level of medical facilities are nevertheless available in big cities only.

Educational Facilities

The literacy rate of Punjab State which was 58.51 per cent in 1991 has increased to 76.7 percent in 2011, an increase of 18.19 per cent points during the last 20 years. The literacy rate for males in urban areas has increased from 83.05 percent in 2001 to 87.28 percent in 2011. It has also gone up for urban females from 74.47 percent in 2001 to 79.62 percent in 2011. The state has universal access at the primary level with a significantly high ratio of primary sections. Except some remote areas/new habitations with small populations, there is a government primary school in almost every village. However, in 2001 there were 61 percent villages without a middle section. In fact, 16 per cent habitations did not have an elementary school even within the norm of 3 km. Similarly, there were many slums in cities which did not have primary schools. The state of facilities and infrastructure available in the primary schools was pitiable. More than 1,000 schools had no building of their own. Even such basic necessities as drinking water and toilets were conspicuous by their absence in a large number of schools. The state government managed 90.8 per cent of the recognized educational institutions. Only about nine per cent were non-government which included aided and/or recognized institutions and a negligible number of the centrally controlled institutions (Gupta and Teotia 2002). The situation in 2011 is not likely to be drastically different.

In terms of educational institutions up to senior secondary

level per 10000 persons, the state on the whole had 0.72 senior secondary schools, 1.19 secondary schools, 1.40 middle schools and 2.33 primary schools. As for college level, the state had 0.02 medical and engineering colleges, 0.03 polytechnic colleges and 0.26 arts/science/commerce/law colleges.

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Table-14 Educational facilities by size and class of towns in 2001

Size and class

of towns

No. of medical and Engineering Colleges Per

10000 Persons

No. of Poly-

technic (Per

10000 persons)

No. If Arts Sciences,

Commerce, Law

Colleges per 10000 persons

No. of Senior

Secondary Schools

Per 10000 persons

No. of Secondary

Schools per 10000 Persons

No. of Middle Schools

per 10000

Persons

No. of Primary Schools

per 10000

Persons

I 0.02 0.03 0.19 0.56 0.96 1.11 1.91

II 0.04 0.03 0.27 0.62 1.14 1.44 2.31

III 0.02 0.04 0.40 0.96 1.46 1.71 3.10

IV 0.01 0.01 0.46 1.28 2.03 2.42 3.42

V 0.00 0.00 0.32 1.92 2.63 3.14 4.75

VI 0.00 0.00 0.00 4.71 4.71 4.71 9.42

Total 0.02 0.03 0.26 0.72 1.19 1.40 2.33

Sources: Computed by Singh (2010) from Census of India,Punjab-2001.

Three notable points emerge from Table-14. First, all types

of professional colleges, i.e., medical, engineering and polytechnic were concentrated in bigger urban centres of class-I, class -II and class-III. It is understandable in view of more demand for professional education and availability of necessary facilities for it in bigger urban centres. Secondly, the number of schools of various levels per 10000 of persons was more in the higher class towns compared to the lower class ones. It implies that population pressure on school level educational services in bigger urban centres was relatively more. Thirdly, numbers apart, quality-wise it is well known that reputed colleges and schools tend to be largely located in bigger cities.

From the above it follows that the municipalities have been

unable to provide adequate infrastructure and quality services to the citizens presumably due to their poor fiscal capability, among other things. Most of the towns do not have adequate coverage of sewerage system and solid waste management is below the mark. These twin factors expose water to severe pollution hazards. The situation becomes acute in rainy months. While the situation is deteriorating in the larger towns it is grossly unsatisfactory in the small towns. According to the Report of the Committee on India Vision 2020 (Planning Commission, Government of India, 2002) „greater inequality may be expected in the level of basic services

-- 51 --

across urban centres of different sizes by the year 2020, unless a concerned initiative is taken to reverse the trend‟.

Citizens’ Perceptions

For ascertaining citizens‟ perceptions and their level of satisfaction about basic services we have banked heavily on an IDC study (Gupta and Kapoor, 2007), apart from field surveys undertaken by our task group. The IDC study is based on a sample of 1000 citizens, 62 complainants, 57 officials and 38 municipal councillors drawn from 6 towns, i.e., Hoshiarpur, Moga, Nakodar, Nawanshahr, Amritsar and Jalandhar.

First about peoples‟ level of satisfaction regarding infrastructure and civic services. Table-15 presents percentage distribution of respondents by their level of satisfaction.

Table-15

Percentage distribution of respondents by satisfaction level with infrastructure and services

Civic services Satisfaction level

Fully satisfied

Substantially satisfied

Somewhat satisfied

Not satisfied

Water supply 23.0 33.7 24.8 18.5

Solid waste management/ garbage collection

5.8 26.8 34.6 32.8

Construction and maintenance of roads

12.9 30.3 23.4 33.4

Street lighting 14.2 34.6 24.2 27.0

Sewerage 23.5 24.9 27.7 23.7

Storm water drainage

11.8 24.2 16.3 47.7

Park and green spaces

4.0 11.2 19.6 65.2

Source: Field Survey, IDC 2007, (Adapted)

More than two-thirds of the respondents were dissatisfied with parks and green spaces and nearly one-half with storm water

-- 52 --

drainage. Roughly one-third each were not satisfied with construction and maintenance of roads and solid waste management. In case of street lighting and sewerage around 50% respondents were either not satisfied or only partially satisfied. Water supply was the only service with which majority of the respondents were satisfied. On closer look at these services in relation to the size of the towns, the study further reveals that in respect of most of the services, including, water supply, the proportions of dissatisfied and partially satisfied respondents went up with the size of the town. While the level of satisfaction with various services reportedly varied from town-to-town, the two major services with notably higher level of dissatisfaction were park and green spaces and storm water drainage. Yet another notable observation of the study is that “a substantially large number of respondents were dissatisfied with the common facilities such as water, sewerage, sanitation, etc.” On the basis of income-wise satisfaction level, it adds “35.6 percent of the respondents had very low satisfaction level and 20.9 percent were dissatisfied with the common facilities among the lowest income group (< Rs. 5000/-).

Focussing on the situation of drinking water, the reports that 74.5 percent of the respondents had piped water/domestic tap, 18.6 percent had hand pumps, while 2.9 percent depended on street/public tap. Regarding the supply of water as per schedule, majority of the respondents reported that it was mostly as per schedule. The same was the response of the majority of the respondents in respect of adequacy of drinking water. About the safety of drinking water, however, overall 43.7 percent of the respondents reported it to be safe for most of the time. However, many respondents from bigger towns like Jalandhar (26.3%) and Amritsar (15.5%) said that the water supply was unsafe for drinking purposes. As for the quality of drinking water, most of the respondents voiced their dissatisfaction with the treatment of the water supplied to them. In respect of the adequacy of water pressure: 19.8 percent reported it to be often inadequate and 45.5% sometimes inadequate. From this deeper probe it comes out that not all is well with the water supply services either.

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Little wonder that when the respondents were asked to prioritise the civic services in terms of their importance, they accorded top priority to water supply followed by maintenance of roads and streets, sewerage, solid waste management and street lighting, in that order. While the priorities generally differ from town-to-town, the broad ranking order across towns is as given above. Surprisingly, parks and green spaces and storm water drainage found no place among the priority services. This shows some lack of correspondence between the services perceived as priority services and level of satisfaction with the given services. A tentative explanation for this could be that other basic services like water, power and roads are more vital than parks and green spaces. As for the omission of storm water drainage, it could be due to the seasonal requirement of it while the other services have regular value. We conducted a sample study in Amritsar city to know their level of satisfaction with the sewerage facility in the city. The sample comprised of 540 respondents. The results are reported in Table-16.

Table-16

Level of satisfaction with sewerage management in Amritsar

Level of satisfaction Number Percentage

Highly satisfied 60 11.11

Quite satisfied 59 10.93

Satisfactory 169 31.30

Not satisfied 138 25.56

Highly dissatisfied 114 21.11

Total 540 Source: Sandhu and Singh (2010)

Nearly one-half of the users (46.67%) reported their lack of satisfaction or high dissatisfaction with the service. The results are more or less the same as of IDC survey. Citizens‟ dissatisfaction with the basic urban services is further mirrored by the recurrent news reports in the media. Take, for example, the recent ones about Amritsar and Mohali. A recent report from Amritsar reads “More and more people are

-- 54 --

falling prey to water borne diseases due to contaminated water even as the Amritsar Municipal Corporation (AMC) continues to make lofty claims about providing clean drinking water in residential colonies. Recently, 132 out of 314 water samples collected from various parts of the city were found to be unfit for human consumption”. (TOI 7/7/11: 4). According to a medical practitioner, most cases were “from low lying and slum areas” (Ibid). Councillor Narinder Singh Tung was reported to lament the lack of sewerage system and water supply in his ward 14 (Ibid). Not confined to unplanned towns, the story of citizens‟ discontent is common even in Mohali, a planned city where residents keep “crying for water and power supply during peak summer”, according to another report (TOI 16/12/10:2)

Councillors’ Perspective

We sought the views of 43 municipal councillors who attended the consultation meet. While all of them participated in group discussions, 39 of them completed the questionnaire given to them to elicit their views about the adequacy of infrastructure services in their areas and other aspects of urban development. Table-17 presents their responses.

Table-17 Councillors’ perception about adequacy of infrastructure services

Adequacy of infrastructure/ services

Councillors’ response about adequacy of infrastructure/

Services

Yes (%) No(%) Partial(%)

Water supply 13(33.3) 7(17.9) 19(48.7)

Duration of water supply 17(43.6) 10(25.6) 12(30.8)

Sewerage network 3(7.7) 15(38.5) 21(53.8)

Storm water drainage 4(10.3) 22(56.4) 13(33.3)

Solid waste collection 9(23.1) 27(69.2) 3(7.7)

Solid waste treatment 7(17.9) 31(79.5) 1(2.6)

Liquid waste treatment 7(17.9) 29(74.3) 3(7.7)

Streets/roads maintenance 13(33.3) 8(20.5) 18(46.1)

Street lighting 19(48.7) 8(20.5) 12(30.8)

Parking 6(15.4) 24(61.5) 9(23.1)

Parks 14(35.9) 11(28.2) 14(35.9)

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Most of the respondents reported inadequacy of basic services such as sewerage system, storm water drainage (especially underground drainage), solid waste collection and treatment, and liquid waste treatment. Barely 10 to 20 percent of the respondents found these services to be adequate. Secondly, more than 50 percent of the respondents found all kinds of infrastructure services to be either quite or partially inadequate. Thirdly, only one-third of the respondents found even such basic services as water supply and road maintenance to be adequate. Finally, as few as 15.4 percent found parking space to be adequate, implying thereby that most of the respondents were dissatisfied about it.

Further, an attempt was made to know about the level of satisfaction of the councillors regarding the state of environment in their areas. Table-18 presents the data pertaining to it.

Table-18

Councillors’ satisfaction with environmental conditions

Environmental condition

Satisfactory Not satisfactory

State of environment 16(41.0) 23(59.0)

State of plantation 16(41.0) 23(59.0)

State of playgrounds 17(43.6) 22(56.4)

The councillors were not satisfied with the state of environment in their municipal areas. A majority of them expressed their dissatisfaction with the environmental conditions (59.0%), plantation (59.0%) and playgrounds (56.4%). This is also borne out by the occasional media reports about deteriorating environmental conditions in various parts of Punjab. According to a recent report, Ludhiana is left with just 1% green cover as against the standard 20%. The above reported perceptions of the councillors were further confirmed by their responses to an open-ended question asking them to report five crucial problems of their areas that need urgent attention. Table-19 is instructive in this regard.

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Table-19 Councillors’ perceptions about the crucial problems of their areas

Crucial problems No. of

respondents (out of 39)

Percentage (%)

Inadequate water supply 26 60.6

Inadequate sewerage system 22 50.6

Inadequacy of roads and their maintenance

21 50.4

Lack of solid waste management 20 50.1

Inadequate parking space 19 48.7

Inadequacy of green cover 14 35.9

50% or more of the respondents cited inadequacy of water supply, sewerage network, roads and their maintenance, and solid waste management, in that order, as the crucial problems of their areas. These were followed by inadequacy of parking space (48.7%) and green cover (35.9%). Similar views were echoed by the councillors in their group discussions. An analysis of the reports of all the four groups of councillors revealed that they shared in common their concerns for inadequacy of storm water drainage, sewage treatment, solid and liquid waste management, roads, streetlights and water and electricity in slums, in particular.

Officials’ Views

The views of officials were gathered from 32 municipal officials, including four state level officers, who attended the consultation meet. Like those of the councillors, the officials‟ views were also ascertained by means of a questionnaire followed by group discussions. Table-20 presents their perceptions about the adequacy of infrastructure services.

Table-20

Perceptions of officials about adequacy of infrastructure services

No. Adequacy of Infrastructure/Service

Officials

Yes(%) No(%) Partial(%)

1 Water supply 11(34.4) 2(6.3) 19(59.4)

2 Duration of water supply 18(56.2) 3(9.4) 11(34.4)

3 Sewerage system 7(21.9) 2(6.3) 23(71.9)

4 Underground drainage 11(34.4) 18(56.2) 3(9.4)

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No. Adequacy of Infrastructure/Service

Officials

Yes(%) No(%) Partial(%)

6 Solid waste collection 6(18.7) 9(28.1) 17(53.1)

9 Solid waste treatment 4(12.5) 25(78.1) 3(9.4)

10 Liquid waste treatment 4(12.5) 8(25.0) 30(93.7)

11 Streets/roads 16(50.0) 3(9.4) 13(40.6)

12 Street lights 21(65.6) 1(3.1) 10(31.2)

13 Parking spaces 5(15.6) 13(40.6) 14(43.7)

14 Parks 5(15.6) 3(9.4) 24(75.0)

One thing that stands out from Table-20 is that a large percentage of officials found the following services quite inadequate: solid waste treatment (78.1%), underground drainage (56.2%) and parking spaces (40.6%), in that order. Further, a vast majority of them found the following services only partially adequate: liquid waste treatment (93.7%), parks (75%), sewerage network (71.9%), water supply (59.37%) and solid waste collection (53.1%). Street lights, duration of water supply and road maintenance were the only services that were found adequate by around 50% officials. These perceptions of the officials largely tally with those of the councillors reported earlier.

We also sought the views of the officials about the state of environment in their respective areas. Table-21 presents their responses.

Table-21

Perception of officials about environmental conditions

No. Environmental conditions Satisfactory Not

satisfactory

1 State of environment in town/city

20(62.5) 12(37.6)

2 State of plantation 15(46.9) 17(53.1)

3 State of parks/playgrounds 15(46.9) 17(59.9)

About two-thirds of the officials found the state of environment in their areas satisfactory, yet a majority of them (53.1%) expressed their dissatisfaction with the state of plantation and green cover. Similarly, 59.4 percent of the respondents were unhappy with the state of parks and playgrounds. What is more,

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almost all the officials stressed the need for more plantation (100%) and more parks/playgrounds (90%). Compared to those of councillors, the perceptions of the officials regarding the state of environment seem to be somewhat at variance. While majority of the councillors (59%) viewed the state of environment as unsatisfactory, majority of the officials (62.5%) found it satisfactory. However, in respect of plantation and parks, their views were almost similar. The same holds for their views about the need for more plantations and parks and playgrounds. As many as 92% of the councillors highlighted the need for augmenting the green cover.

An analysis of the officials‟ responses to an open-ended question seeking their views about the five crucial problems of their areas reveals the following five, in that order: traffic congestion (21/32), inadequate parking space (19/30), lack of storm water drainage (17/32), lack of solid waste management (16/32) and inadequate sewerage system (8/32). In their group meetings, these very problems were highlighted by them.

Salient Deficits On almost all the key indicators of infrastructure and services,

except the quantity of water supplied, the situation in the state falls short of the basic standards. In respect of water, too, inadequacies of coverage, periodicity and quality are noted.

The infrastructure deficits are particularly depressing on the front of sewerage network and treatment plants, storm water drainage, especially underground drainage and inadequacy of parks and playgrounds.

On the front of civic services, deficits are more pronounced in respect of public sanitary amenities like solid waste collection and treatment and liquid waste management.

Rapid deterioration of environmental conditions, including the vanishing green cover, open spaces, aggravating traffic congestion and vehicular pollution are assuming alarming proportions.

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The state of infrastructure and services is at its worst in Nakodar among other towns and in slums and squatter settlements in class I and class II towns.

A major reason of inadequacy of infrastructure and civic amenities seems to be the poor fiscal capability of the municipalities caused by lack of their financial autonomy.

There is a stunning commonality in the perception of all the parties concerned, i.e., citizens, municipal councillors and officials about the above referred deficiencies. More importantly, their views as well tally with the realities reflected in the fact file, thus lending a touch of validity to the above account.

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IV

URBAN HOUSING, SLUMS AND POVERTY

Acute shortage of housing, proliferation of slums and aggravation of poverty constitute a significant area of concern in respect of urban planning and development in the developing nations. India is no exception to it. It may be revealing to ascertain the magnitude of these problems in Punjab.

Housing

With the rapid growth of urban population due to migration and natural growth the housing shortage is mounting. As per census 2001, there were 1455461 census houses in Punjab. These were much less than the required units. There are many ways to calculate the housing shortage. According to conventional method housing shortage is viewed as the differential between number of census housing units and number of households. Thus viewed, housing shortage in Punjab in 2001 was 34233 units as shown in Table-1. However, the housing shortage may rises when it is viewed in terms of inadequate housing which is represented by number of households without any room and number of overcrowded houses (one room tenement accommodating a married couple and their children).

Housing Shortage

Further, when the existing houses are seen in terms of ideal nuclear housing need the deficit in 2001 was 231322 units which is (number of married couples) estimated to rise to 389500 in 2011. Combining all types of shortages, the total shortage in

2001 and 2011 was 626854 and 914150 respectively. Sahota (1997) also estimated housing shortage around 6.5 lakh units in 2000. His study revealed that housing provided by public agencies contributed only 10 per cent to the new housing stock and PUDA allocated no more 6.8 % of its resources to shelter the critically poor. More than three quarters of its resources go to the housing for the non-poor. He also pointed out that none of the public

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corporations and institutions assisting housing in Punjab satisfies any efficient criteria in terms of project, administrative expenses, subsidization, and rate of recovery of loans etc.

On the one hand, there is an acute shortage of housing in the state and, on the other hand, about 9 per cent of houses are lying vacant. People do not rent out their houses because of Rent Control Act which is not in favour of landlords. They prefer to keep their houses vacant rather than renting it. The housing shortage is the problem of the poor because they cannot afford to build a house with their existing income. A report of technical group of Planning Commission on estimation of housing shortage also admitted that about 99 per cent households facing housing shortage are from economically weaker sections (EWS) and low income groups (LIG).

Table-1 Estimated housing stock and housing shortage in urban Punjab:

2001 & 2011

Sr. No

Punjab (2001)

Urban Punjab (2001)

Urban Punjab (2011)

1. Population 24,289,296 8245,566 10500000

2. Total Household 4265156 1489694 2019000

3. Nuclear Families 5120010 1687766 2281500

4. Census houses(Residence+ Residence Cum other purpose)

4185393 1455461 1892000*

5. Minimum Housing Shortage by Conventional Method(2- 4)

79763 34233 127000

6. Qualitative Housing Need

A. Inadequate Housing

(i) No. of household without any room

25003 11792 15950

(ii) Overcrowded housing 808403 280882 337000**

(iii) Serviceable/non-serviceable 209953 34392 44700***

(B) Upgrading demand

7. Ideal Nuclear Housing Need****

934617 231322 389500

8. Housing Shortage (5+6) Housing Shortage (5+6+7)

361299 626854

524650 914150

Source: Computed from Census 2001. *It is assumed that the housing stock has increased at the rate of 30% per decade. ** It is assumed that the overcrowding in housing has increased at the rate of 20% per decade. *** It is assumed that the Serviceable/non-serviceable has increased at the rate of 30% per decade. **** Demand for nuclear housing unit is estimated as the difference between the nuclear families and housing stock

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Dilapidated Conditions

Condition of the houses is an important indicator of quality of housing. The Indian census has categorized houses into three types, i.e., good, liveable and dilapidated. This classification is based on the perception of the respondents. On the basis of this classification, little less than two-thirds of urban dwellers in class I cities are living in good houses while one-third in liveable or dilapidated houses, as shown in Table-2.

Table-2

Distribution of census houses used in class I cities as residence and residence-cum-other use by their condition

S. No.

Name of Towns Housing Condition

Total HH

% age good

% age liveable

% age dilapidated

Urban Punjab 1455461 63.99 32.19 3.82

1 Ludhiana 2,51,247 59 38 4

2 Amritsar 1,69,672 61 35 4

3 Jalandhar 1,26,826 66 31 3

4 Patiala 56,773 77 21 2

5 Bathinda 41,014 73 23 4

6 Pathankot 24,798 70 26 4

7 Hoshiarpur 28,959 74 23 3

8 Batala 25,585 58 38 4

9 Moga 24,158 61 33 6

10 Abohar 21,860 59 37 4

11 SAS Nagar Mohali 26,909 90 6 4

12 Malerkotla 17,446 54 43 3

13 Khanna 18,532 65 30 5

14 Phagwara 19,363 68 29 4

TOTAL 853142 Source: Computed from Census 2001.

Table-2 reveals that SAS Nagar Mohali with 90 percent good houses tops the list of cities of Punjab as far as good housing condition is concerned. This is attributable to the fact that it is planned and newly developed city. On the other hand, towns like Ludhiana, Abohar and Malerkotla have less than 60 per cent of households living in good conditions. About one-third of the households living just in liveable, not good, houses is a common story of many towns.

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Poor quality of structure

Quality of housing depends upon the type of structure. The structures of census houses have been classified into permanent, semi-permanent or temporary, depending upon the type of material used in construction of walls and roof. Temporary structures are further classified into serviceable and non serviceable. In case of permanent houses the walls and roof are made of permanent material. In semi-permanent houses either wall or the roof is made of permanent material. Serviceable temporary houses are those in which wall is made of mud, unburnt bricks or wood. Serviceable temporary houses are one in which wall is made of grass, thatch, bamboo etc.

Table-3

Percentage distribution of census houses used as residence and residence- cum-other use by their type of structure

Permanent Semi

Permanent Total Serviceable and

Non serviceable

Total 86.11 8.86 5.02

Rural 83.36 10.21 6.43

Urban 91.29 6.34 2.36

Source: Computed from Census 2001.

Table-3 shows that 8.70 percent households live in semi permanent structure and serviceable and non serviceable houses. Semi permanent/temporary housing is by all means low quality housing. The proportion of permanent houses increases with the class of the town/city. Incidentally, the situation in Punjab is somewhat better than that in case of India, as about one-fifth of urbanites in India live in semi-permanent and temporary structures.

Size of House and Overcrowding

A person‟s status is determined by the size of house in which he lives and the size of the house is determined by the number of rooms in it. The distribution of households by the number of rooms occupied by them reveals the quality of housing and overcrowding or inadequate housing situation.

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Table-4 Percentage distribution of households by number of rooms occupied

in urban India and urban Punjab: 2001

No. of Rooms Per cent ages of households

Urban India Urban Punjab

No exclusive room 2.3 0.79

One Room 35.1 26.11

Two 29.1 29.63

Three 17.1 20.88

Four 8.7 12.81

Five 3.3 5.06

Six 4.0 4.72 Source: Computed from Census 2001.

Table-4 reveals that 2.3 per cent households in urban India do not have exclusive room and 35.5 per cent of urban India lives in one tenement. Two-thirds of urban India live in one/two room houses. In case of urban Punjab only 0.79 per cent households are without any room and one-fourth (26.11) households live in one room houses. Overall, Punjab‟s urban situation is somewhat better than that of urban India. Yet, a large majority of urban Punjab is living in one/two room tenements. The situation further worsens as these tenements do not have kitchen, bath, toilet and proper ventilation. Usually dwellers of such houses are poor people and proper water supply and sewerage facility is also lacking within such houses.

One can well imagine the overcrowding in one and two

room tenements when these are seen in relation to the size of households. The average household size in India and in Punjab is around 5.5 persons which means room-men ratio in one room houses is 1:5.5. This reveals that more than one fourth of urban Punjab is living in overcrowded houses. Usually the size of household among the poor is larger than among the non poor. Due to the large size of a household the poor face more overcrowding than other income groups.

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Ownership and Inadequate Accommodation

Ownership of the house and number of rooms is another measure of one‟s status. Table-5 and figures 1 and 2 throw light on the state of ownership and number of rooms in Punjab.

Table-5 Percentage Distribution of households according to ownership and

number of rooms Ownership Perc-

entage No

Room One room

Two room

Three room

Four rooms

Five room

Six Rooms

Owned 77.16 54.7 54.52 78.2 87.17 93.08 94.54 93.45

Rented 18.77 20.47 38.58 17.53 10.26 5.67 4.37 5.31

Any Other 4.06 24.82 6.88 4.24 2.56 1.24 1.08 1.23 Source: Computed from Census 2001.

Figure 1 Percentage distribution of household ownership

Figure 2

Percentage distribution of households according to ownership and number of rooms

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It is clear from Table-5 and Figures 1 and 2 that a little over three-fourths of the households own their houses while 18.77 percent live in rented houses with 4.06 percent living in non-owned and non-rented accommodation. In case of households living in one room houses, ownership is 54.5 per cent but in case of three rooms, four rooms and five rooms houses, it is 87.17 per cent, 93.08 per cent and 94.54 per cent respectively. It shows that with the ownership of house the number of rooms increases as well. Rented houses are negatively associated with number of rooms in houses.

Poor Ratio of per Person Floor Area

Floor area per person is defined as the median useable living space per person. Room-men ratio depicts crowding situation but floor area per person is a more refined measure of level of the same. The mean reported floor area per persons is 18 sq.mts. with a range of 4 to 60 sq.mts. in the world. All India average floor area per person is 6.89 sq.mts. A study in Amritsar, however, reveals that at least one-third of population has 5 sq. mts. or less. It also shows that floor area per person in posh area of the city was 64 sq.mts. while in one of its notified slums it was 5 sq.mts. per person (Sandhu and Singh 2007). On the basis of discussion on the problem of housing in Punjab it can be concluded that housing shortage is acute and it is assuming alarming proportions. With the rapidly escalating prices of plots and flats, affordable housing is slipping out of the reach of even middle class urbanites.

Slums and Squatter Settlements

Slums are areas which either lack or have inadequate basic services and are usually inhabited by the poor people who cannot afford to live in other parts of the city. In the backdrop of rapid urbanization, the number of slums has grown to an alarming count. According to a recent report of the Natiional Sample Survey Organisation (NSSO 2010) there were nearly 49000 slums in India during 2008-09 – a staggering figure indeed. 24% of the these slums were located along nallahs and drains and around 12% along railway tracks; 57% upon public land and the rest of private land. Further, as is only to be expected, the state of basic amenities and services like toilet facility, drainage facility, water

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supply, roads was more deplorable in non – notified slums than in notified ones.

Like the number of slums, the number of slum dwellers has as well increased manifold because of high rate of natural increase, swift migration and occasional extension of municipal limits. In 1981 there were 27.9 million slum dwellers in India and in 2001 their number increased to 42.57 million in 640 towns spread across 26 states and union territories (Census 2001). They constituted 23.1% of the total urban population. If slum population in other town is also considered, the number will further increase.

Punjab is not exception to the national slum scenario. There are a large number of slums in Punjab. In Ludhiana alone, there were as many as 209 slums, (CDP 2006). Add to them 600 unauthorised colonies and 20 thousand jhuggies which lack basic infrastructure and facilities. In all, about 25 to 40 percent of city‟s population reside in slums or squatter settlements. In Amritsar, similarly, there were 64 slums and 200 unauthorised colonies in 1997 (Bhanwar 1997). In Bathinda, (PUDA) Punjab Urban Planning and Development Authority identified 26 unauthorised colonies (The Tribune 2010) and in Zirakpur 71 unauthorised colonies have come up within the last few years. The Chief Administrator of (PUDA) Punjab Urban Planning and Development Authority admitted that there were as many as 3075 unauthorised colonies in Punjab in 2007. Little wonder that Punjab had 11.52 lakh slum dwellers in 2001 living in its 28 class I and class II cities. Table-6 presents data on slum population in Punjab in 2001.

Table-6 Slum population in Punjab, 2001

Particulars 2001

Population living in slum pocket/areas in the state (in lakh) 11.52

Total population of the 28 towns in which slums have been identified (in lakh)

58.88

Percentage of slum population of 28 towns to the total population of these towns

19.56

Percentage of slum population to total urban population of the state

13.97

Percentage of slum population to total population of the state 4.74

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It is clear from Table-6 that slum population constituted almost one-fifth of the total population of 28 class I and class II towns only. Its size is likely to be larger for the total number of urban centres in Punjab. Further, the percentage of slum population is only expected to vary from town to town and with classes of towns. Table-7 shows the percentage of slum population in class I towns in Punjab.

Table-7

Distribution of slum population in class I towns of Punjab City Total

population Slum

Population Percentage Slum

Population

Ludhiana 13,98,467 3,14,904 22.51

Amritsar 966862 229603 23.74

Jalandhar 706043 134840 19.09

Patiala 303151 67411 22.23

Bathinda 217256 40602 18.68

Pathankot 157925 15663 9.91

Hoshiarpur 149668 8370 5.59

Batala 125677 33604 26.73

Moga 125573 33242 26.47

Abohar 124339 43863 35.27

Malerkotla 107009 20401 19.06

Khanna 103099 16299 15.8

Source: Census of India 2001.

The slum population of Class - I towns varies from 5.6 to 35.27 percent. But all the bigger cities like Ludhiana, Amritsar, Jalandhar and Patiala have about 20 per cent or more of slum

population. Ludhiana is the most populated city of Punjab and it has

large number of slums. Out of 70 municipal wards, 31 reported presence of slums (Census of India 2001). The rapid and immense industrialization of Ludhiana city has resulted in the emergence of numerous slum colonies in and around the city. There is no formal housing for industrial workers, due to which there are many slums that have come up near the industrial areas. Table-8 shows the slum population in Punjab and also in Ludhiana.

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Table-8 Slum population distribution in Punjab and Ludhiana City, 2001

Particulars Punjab Ludhiana city

Population living in slum pocket/areas (in lakh)

11.52 3.15

Total population of the 28 towns in which slums have been identified/Ludhiana city (in lakh)

58.88 13.95

Percentage of slum population of 28 towns to the total population of these towns/Ludhiana

19.56 22.5

Source: Census of India, 2001

Population of slum dwellers in Ludhiana is much higher (22.5 percent) than the state average of 19.56 percent. Ludhiana alone accounts for 27.5 percent of slum population of the state. Based on past trends, it appears that slum population in Ludhiana will grow in times to come.

In Class - II towns their percentage varies between 0.63 per

cent to 35.61 per cent (Table-9). This does not mean that other towns do not have slums. Slums are there but they have not been identified and notified by the local body. The fact is that the majority of towns including those not included in census survey i.e. Class – III, IV etc. of the state have substantial proportion of population living in slums or slum like conditions. It is a different matter though that these are not included in the data because these have not been notified by municipal committees. The urban local bodies do not notify them on the plea that these are illegal settlements. Moreover, if they notify such illegal settlements they would be obliged to provide basic services to these areas.

This is all because of lack of a rational and uniform policy

of slum identification and slum clearance in Punjab. Even where the municipal bodies have list of notified slums they do not have upto date and reliable basic information about these areas. This is so because of the casual attitudes of the administrators and planners. The sufferers are the slum dwellers who comprise a sizeable segment of urban population.

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Table-9 Distribution of slum population in Class II towns of Punjab

Town Total Pop Slum

Population SCS in Town

SCS in

Slums

% Share-Slum

Population

Barnala 96,624 7,206 21805 2847 7.45

Phagwara 95788 1676 22545 978 1.74

Ferozpur 95775 25012 18823 9870 26.11

Kapurthala 85686 18187 16451 6305 21.22

Muktsar 83655 530 22128 484 0.63

Rajpura 82956 13354 7280 2563 16.09

Kotkapura 80785 25606 23435 13310 31.69

Faridkot 78265 25059 21035 15158 32.01

Sangrur 77989 14246 15877 8607 18.26

Mansa 72627 4584 16974 2371 6.31

Malout 70765 23438 19416 10722 33.12

Gurdaspur 67479 9523 13422 2394 14.11

Fazilka 67427 24014 14632 8064 35.61

Nabha 62000 7161 8973 2863 11.55

Ferozpur Cantt.

57678 1163 8065 747 2.01

Total 11,75,499 200759 250861 87283 257.91 Source: Census of India 2001.

The slum problem aggravates with the size of city. In Punjab there are two metropolises, i.e., Ludhiana and Amritsar. Ludhiana is the largest city of the state. It is also known as the Manchester of India. Many people from Punjab and other states migrate to the city for employment in industries here. There is no formal housing for these migrants due to which many slums have come up near the industrial areas. Majority of them (87.1) are located in residential areas, mostly on private land and the rest of them in industrial and commercial areas.

Table-10

Growth of slums in Ludhiana Sr.No Year of Establishment Number of Slums % age

1 Before 1970 14 6.6

2 1971-1980 30 14.5

3 1981-1990 74 35.4

4 1991-2000 75 35.8

5 2000 + 5 2.4

6 Not Aware 11 5.3

Total 209 100 Source: Municipal Corporation Ludhiana, 2007

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A look at Table-10 shows that roughly 80 per cent of the slums in Ludhiana have sprung up during last two and half decades. More than one-third of them have semi-pucca and kutcha houses which easily depicts their degraded quality of life (CDP). Out of 209 slum pockets identified in the city, only 57 have been provided with basic amenities including water supply through taps, sewerage, individual toilets, roads and street lights. There are 68 partially upgraded slum pockets in the city where only water supply, roads and street lights have been provided. Rest of the 84 slums pockets are yet to be considered for the provision of services. These slums have been existing in the city for many years and they have also been notified by the corporation, but the local body is still considering whether services should be provided to them or not. One can well imagine the apathetic attitude of administrators where 40 per cent notified slums of the city are waiting for their decision and suffering because of their inaction. Like Ludhiana, Amritsar also has large number of slums which constitute 23.74 per cent population of the city. Majority of them are suffering from absence or inadequacy of basic services (below given photographs depict the situation). The situation in other towns of the state is no better; if anything, it seems to be worse.

A scene from Inderpuri an Amritsar slum

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Growing Inequality

Equity is one of the important indicators of urban development because lack of it indicates that part of the community is not benefiting from development. Increase in inequality is often associated with social unrest and increase in crime. Gini coefficient is one of the measures of inequality. In urban Punjab during the period from 1993-94 to 2004-05, the value of Gini coefficient has increased from 28.1 to 40.3 (Table-11). In urban India, on the other hand, the increase in the value of gini coefficient during the same period is not as large, as shown in Table-11. This indicates that urbanization in Punjab has generated greater disparity between the privileged and the underprivileged sections.

Table-11 Gini Coefficient in India and Punjab

India Year

1983 1987-88 1993-94 2004-05

Urban 33.9 35.0 34.4 37.6

Rural 30.4 29.9 28.6 30.5

Punjab

Urban 33.9 28.8 28.1 40.3

Rural 29.2 29.7 28.1 29.5 Source: Computed by Sandhu and Singh(2007)

The increase in socio-economic disparity between different segments of urban society in Punjab is further observed by Sandhu in his study of Amritsar (2010). On the basis of his study, Sandhu states: “Scheduled Castes are being segregated due to overall backwardness and their marginalisation in the overall developmental process occurring due to urbanisation. In fact, the urbanization has not been able to desegregate Scheduled Caste in Amritsar; rather it has perpetuated the segregation”. This is not a new development. D‟Souza (1978) also observed the same phenomenon in his study of Punjab way back in 1978. The trend, however, has gained in salience over the years. At any rate, such a trend has also been noticed in recent research at global level. Sassen (2000), for example, reports sharp increase in socio-economic and spatial disparities within the major cities of the developed world. But that is no reason for us not to revert the trend.

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A slum In Ludhiana

Housing in a posh area

-- 74 --

This is all occurring due to elite oriented and anti poor urban development in Punjab in which majority of them are compelled to live in areas where basic services are missing or are inadequate. In every city in the state one can find such areas in abundance which can be differentiated from other developed areas of city in respect of residents‟ socio-economic status, physical infrastructure and housing, as is visible in photographs given above.

Urban poverty

Urban poverty in Punjab is much more crucial due to higher per capita income in the state. It is strange that the poverty line of Punjab, with high per capita income, has been fixed quite close to that of the states like Bihar and Jharkhand, having low per capita income. This has distorted the real picture of urban poverty here. For, urban poverty is not just an economic phenomenon. It comprises a complex of interrelated problems of lack of housing, basic amenities and sources of livelihood. Any measurement of poverty based on income alone fails to capture the real magnitude of poverty of vulnerable sections that do not have access to housing, wage employment, basic amenities and civic services in Punjab. With a slight upward revision of the urban poverty line and inclusion of non-economic parameters such as housing, basic amenities and livelihood, etc., the number of poor would go up considerably (See Gupta and Teotia 2002; Teotia 2007, 2009). State specific poverty line (2004-05) based on income is given in Table-12.

Table-12

State specific poverty lines (2004-05)

(Rs. per capita per month)

State Rural Urban

Andhra Pradesh 292.95 542.89

Assam 387.64 378.84

Bihar 354.36 435.00

Chattisgarh 322.41 560.00

Delhi 410.38 612.91

Goa 362.25 665.90

Gujarat 353.93 541.16

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State Rural Urban

Haryana 414.76 504.49

Himachal Pradesh 394.28 504.49

Jammu & Kashmir 391.26 553.77

Jharkhand 366.56 451.24

Karnataka 324.17 599.66

Kerala 430.12 559.39

Madhya Pradesh 327.78 570.15

Maharashtra 362.25 665.90

Orissa 325.79 528.49

Punjab 410.38 466.16

Rajasthan 374.57 559.63

Tamil Nadu 351.86 547.42

Uttar Pradesh 365.84 483.26

Uttarakhand 478.02 637.67

West Bengal 382.82 449.32

Dadra & N. Haveli 362.25 665.90

All India 356.30 538.60 Source: Planning Commission (2007)

Poverty trends based on income alone show that urban poverty has declined sharply at national level, as also in Punjab in 1980s and 1990s. A number of scholars contest this claim and argue that on the contrary there is a trend of wide spread impoverishment (See Deaton & Dreze 2002). Table-13 shows poverty trends in Punjab.

Table-13

Poverty trend in Punjab (in lakh)

NSS Rounds Year People below poverty line

Rural Urban Total

28 1973-74 30.47

(28.21)

10.02

(27.96)

40.49

(28.15)

32 1977-78 18.87

(16.37)

11.36

(27.36)

30.23

(19.27)

38 1983 16.79

(13.20)

11.85

(23.79)

28.64

(16.18)

43 1987-88 17.09 8.08 25.17

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NSS Rounds Year People below poverty line

Rural Urban Total

(12.60) (14.67) (13.20)

50 1993-94 17.76

(11.95)

7.35

(11.35)

25.11

(11.77)

55

1999-2000

(30 day recall basis)

10.20

(6.35)

4.29

(5.75)

14.49

(6.16)

61

2004-05

(Uniform Recall Period)

15.12

(9.1)

6.50

(7.1)

21.63

(8.4)

61 (Mixed Recall

Period)

9.78

(5.9)

3.52

(3.8)

13.30

(5.2) Source: Planning Commission (2002) Note: (i) Figures in parentheses are percentages of people below poverty line

(ii) The results of the latest NSSO data on household consumer expenditure (NSS 61st Round), covering the period July 2004 to June 2005, gives two different consumption distributions for the year 2004-05. The first one from the consumption data collected using 30-day recall period for all the items. The other distribution is obtained from the consumer expenditure data collected using 365-day recall period for five non-food items and 30-day recall period for the remaining items. These two consumption distributions have been termed as Uniform Recall Period (URP) consumption distribution and Mixed Recall Period (MRP) consumption distribution respectively.

The data indicates sharp decline in ratio and number of urban poor in Punjab over a period of time. The state experienced very sharp decline in the number and percentage of urban poor during the period 1993-94 to 1999-2000.

It is believed that in India there is a higher incidence of

poverty in rural areas and urban poverty is largely a spill over of the rural poverty. In Punjab spill over thesis does not hold good. It has been observed that incidence of urban poverty has been higher than that of rural poverty, except during 28, 55 and 61st NSSO rounds. Further the rural and urban poverty has been declining at a faster rate. In mid sixties the proportion of urban population below poverty line (48.07%) was less than double the proportion of rural poverty but in early nineties the same was more than three times the proportion of rural poverty (Shergill and Singh, 1998).

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According to Planning Commission, during the year 2004-05 there were 3.52 lakh persons in urban area living below poverty line in Punjab (Economic Survey 2008-09). In Punjab ratio of urban poverty has declined but number of urban poor remains large.

According to the Annual Special Component Plan for SCs

2002-2003 (Government of Punjab 2002), the incidence of urban poverty is alarming in some of the populous districts of the state including Ludhiana, Jalandhar, Patiala and Amritsar. The plan document has referred the data of SUDA about below poverty-line (BPL) families to show the concentration of BPL families in Ludhiana (Table-14).

Table-14

Distribution of urban poor in different districts in Punjab, 2002

Districts Number of families below poverty line

Percentage

Ludhiana 62431 28.27

Jalandhar 50039 22.66

Patiala 22684 10.27

Amritsar 20292 9.19

Firozepur 10854 4.92

Sangrur 9365 4.25

Gurdaspur 7467 3.38

Bathinda 6411 2.90

Mansa 5702 2.59

Kapurthala 4537 2.05

Faridkot 4224 1.91

Nawanshahr 3802 1.72

Roopnagar 3732 1.69

Muktsar 3251 1.47

Hoshiarpur 2499 1.13

Moga 1794 0.81

Fatehgarh Sahib 1753 0.79

Total 220837 100.00 Source: Tenth Five-Year Special Component Plan 2002-2007 and Annual Special

Component Plan 2002-03 for Scheduled Caste, Government of Punjab (June, 2002).

Table-14 shows that the largest proportion of poor

families, i.e., 28.27 per cent live in Ludhiana district and more than 50 per cent of the total BPL families in the state live in only two districts, i.e., Ludhiana and Jalandhar. Most of the urban poor in

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the Ludhiana district, however, live in Municipal area of Ludhiana as shown in Table-15.

Table-15

Trends in urban poverty in Ludhiana city Year Total Population

(Lakhs) Number of the Poor (Lakhs)

Percentage to Total Population

1991 10.42 1.35 12.95

2001 13.95 1.5 10.75

2006 16.65 1.62 9.7 Source: City Development Plan, Ludhiana (2006)

The City Development Plan indicates that the numbers of persons living below poverty line in Ludhiana are 1.62 lakhs and the poverty line has been defined on the basis of annual family income (less than Rs.20,000/- per annum). There is no reliable database on urban poverty at city level as state government and Ludhiana Municipal Corporation do not carry regular surveys for identifying BPL population. But on the basis of size of slum population living in Ludhiana, it could easily be argued that city has large number of BPL families.

In a recent comprehensive snapshot of Slums in Ludhiana

(Teotia 2007) the critical areas of concern relating to various dimensions of urban poverty have been underlined as below:

Box 1 Areas of Concern Relating to Urban Poverty in Ludhiana

Only 3 slums have storm water drainage facility.

78 slums suffer from water logging/stagnation every year.

43% of slum households are without sewerage.

10% slum population goes for open defecation.

Only 3% slum households have access to community toilets.

56 slums do not have streetlights.

No government scheme of door-to-door collection of garbage in operation.

No provision of lifting of the garbage in 22% of the slums.

Around 22% have reported no sweeping of the roads.

No provision of cleaning of drains in 32% slums.

90 slums are located in environmentally sensitive areas.

28 slums have kutcha approach road.

Only 24 slums have anganwari centers.

About 100 slums have government medical facility beyond 5 kms.

Only 20% of the slum children were reported as fully immunized.

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Around 31% of the households in the slums have less than 30,000 as their annual income.

No Self Help Groups or provision for micro finance was reported in any of the slums.

Financial assistance/ pension benefits were given to only 41% of the old people, 44% widows and 20% disabled persons under the various social security/welfare schemes.

39% slum population was without any kind of ration card.

Only 6 slums have a community centre in their localities.

No government scheme related to urban poverty alleviation is in operation in slums since the last five years.

The non economic parameters of poverty, as described

above, for Ludhiana represent the situation in most of the larger towns in Punjab. It is disconcerting to note that the state of urban poverty in Punjab in the form of multiple deprivations including insecurity of land tenure, little or no income, inadequate access to basic amenities, housing, education, employment and health services.

The central government has launched many programmes,

including legislative measures, to tackle the problem of urban poverty and its multiple deprivations. These include the following:

i. Slum Areas (Improvement and Clearance) Act, 1956 ii. Urban Land (Ceiling and Regulation) Act, 1976 iii. Environmental Improvement of Urban Slums (EIUS), 1992 iv. Integrated Child Development Services (ICDS), 1975 v. Urban Community Development Programme, 1979 vi. Urban Basic Services for the Poor (UBSP), 1990 vii. Nehru Rozgar Yojana (NRY), 1989 viii. National Slum Development Programme (NDSP), 1996 ix. Swarna Jayanti Shahari Rozgar Yojana (SJSRY), 1997 x. National Housing and Habitat Policy, 1998 xi. Jawaharlal Nehru National Urban Renewal Mission (JNNURM),

2005 xii. National Urban Housing and Habitat policy 2007 after

JNNURM. xiii. Swarna Jayanti Shabari Rozgar Yojana (SJSRY) , 2009. xiv. Rajiv Awas Yojana (RAY) 2009.

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A look at the available official data and the evaluation studies shows that the Punjab government has not taken full advantage of these schemes and programmes. One evidence of it comes from the Reports of the Third and the Fourth Punjab State Finance Commissions. Table-16 is revealing in this regard.

Table-16

Grants released by the Government of India & State Government to of Punjab urban local bodies for urban development, poverty

reduction and infrastructure (2001-02 to 2005-06)

(Rs. in Crore)

Sr. No

Year

Govt. of India Govt. of Punjab Total Gap in allocations and release Allocated Released Allocated Released Allocated Released

1 2001-02 65.53 16.74 48.02 3.67 113.55 20.41 93.14

2 2002-03 93.82 29.27 29.37 2.79 123.19 32.06 91.13

3 2003-04 94.58 26.13 306.39 0.09 400.97 26.22 374.75

4 2004-05 121.27 11.96 11.79 50.83 133.06 62.79 70.27

5 2005-06 78.89 15.86 68.33 72.01 147.22 87.87 59.35

Total 454.09 99.96 463.90 129.39 917.99 229.35 688.64

Source: Report of the Third Punjab Finance Commission (2006)

There was a huge gap between the grants allocated and grants released by both the governments central and state during the period from 2001-02 to 2005-06. While the grants released by the Centre ranged between one-third and one-tenth on the lower side those released by the state were one-fifteenth of the allocated amount during the period from 2001-02 to 2002-03 and ridiculously negligible during 2003-04. However, for the subsequent two years the grants released by the state were more than the allocated figure. In total, however, the grants received by the ULBs were barely one-fourth of the grants sanctioned. That says a lot about the poor concern of the government at various levels in regard to poverty alleviation.

The story is no different for the period from 2005-06 to

2009-10, as can be seen from Table-17.

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Table-17 Grants released by the Government of India & Government of Punjab to urban local bodies for urban development,

poverty reduction and infrastructure (2006-07 to 2009-10) (Rs in Crore)

Sr. no.

Name of scheme

2006-07 2007-08 2008-09 2009-10

Centre Share

State Share

Total Centre Share

State Share

Total Centre Share

State Share

Total Centre Share

State Share

Total

1 2 3 4 5 6 7 8 9 10 11 12 13 14

1 Gahara Project at Amritsar

9.60 9.60 39.15 39.15 3.35 3.35

2 Municipal Development Fund

110.00 110.00 392.32 392.32 3.12 3.12

3 Provision of Rail Bridge (ACA)

20.00 20.00

4

Urban Renewal Programme repayment of LIC Loan(taken for w/s + Saw Projects in ULBs)

2.93 2.93 2.77 2.77 2.62 2.62 2.45 2.45

5 Sawarn Jayanti Shabari Rozgar Yojna (75:25)

0.13 0.36 0.49 0.49 0.49 0.27 0.27

6

National Urban Information System(70:30) (JNNURM)

0.46 0.46 0.03 0.03 0.18 0.18

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Sr. no.

Name of scheme

2006-07 2007-08 2008-09 2009-10

Centre Share

State Share

Total Centre Share

State Share

Total Centre Share

State Share

Total Centre Share

State Share

Total

1 2 3 4 5 6 7 8 9 10 11 12 13 14

7

Urban Infrastructure and Governance (50:20:30) (UIG)

28.19 11.27 39.46 71.63 16.58 88.21 52.37 31.92 84.29

8

Accelcrated Water Supply Programmes (50:50)

1.11 1.11 1.12 0.01 1.13

9

Laying of Main Sewar line to check contamination of water in Phagwara Town

3.00 3.00 2.00 2.00

10

Integrated Development of Small and Medium/ town/ JNNURM (60:40)

2.12 1.69 3.81 0.24 0.16 0.40 0.21 0.21

11

JNNURM (50:20:30) Basic Services to Urban Poor(BSUP)

9.04 3.62 12.66 8.32 3.33 11.65

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Sr. no.

Name of scheme

2006-07 2007-08 2008-09 2009-10

Centre Share

State Share

Total Centre Share

State Share

Total Centre Share

State Share

Total Centre Share

State Share

Total

1 2 3 4 5 6 7 8 9 10 11 12 13 14

12

JNNURM (80:10:10) Urban Infrastructure Development Scheme for Small & Medium Town (UIDSSMT)

75.87 9.48 85.35 83.67 10.30 93.97

13

JNNURM (20:10:10) Integrated Housing and Slum Development Programme (IHSDP)

12.77 1.60 14.37 3.54 3.54

14

Prevention of Pollution of river Sutluj(cost of land 100% CS)

15.35 10.00 25.35 37.30 10.00 47.30 7.00 1.48 8.48 15.35

15

Amritsar Sewerage Project funded by JBIC(for land accquision)

4.00 4.00

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Sr. no.

Name of scheme

2006-07 2007-08 2008-09 2009-10

Centre Share

State Share

Total Centre Share

State Share

Total Centre Share

State Share

Total Centre Share

State Share

Total

1 2 3 4 5 6 7 8 9 10 11 12 13 14

16

Extension and Augmentation of Water Supply in Bathinda & Mansa District(PIDB and Housing Urban Development funded scheme)(50:50)

25.00 25.00 25.00 25.00

17

Extension on daugmentation of water supply and sewerage scheme at Moga(PIDB funded scheme)

1.00 1.00 1.00 1.00

18

Development work at Moga(PIDB funded scheme)

1.00 1.00

19

Water Supply and Sewerage Scheme at Sultanpur Lodhi(PIDB

1.00 1.00

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Sr. no.

Name of scheme

2006-07 2007-08 2008-09 2009-10

Centre Share

State Share

Total Centre Share

State Share

Total Centre Share

State Share

Total Centre Share

State Share

Total

1 2 3 4 5 6 7 8 9 10 11 12 13 14

funded scheme)

20

Water Supply and Sewerage Scheme at Patti(PIDB funded scheme)

1.00 1.00

21

Water Supply and Sewerage Scheme at Nangal & Ropar Town (PIDB) funded scheme

2.00 2.00

22

Extension & augmentation of water supply and sewerage scheme at Gidderbaha (PIDB funded scheme)

15.00 15.00

23

Training to elected women representative in the ULBs

0.07 0.07

Total 27.27 16.55 43.82 106.00 137.73 243.73 196.31 475.36 671.67 151.25 82.12 233.37 Source: Office of the DLG and The Report of the Fourth Punjab Finance Commission

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The detailed break-up of data shows that flow of central and state government grants for urban poverty alleviation schemes such as SJSRY, IHSDP, BSUP etc. and urban development and urban renewal programmes like JNNURM has been meagre and highly unpredictable. The central grants have not been utilized properly due to inadequate share of funds by the state. The state government seems to be unconcerned about the problem of poverty alleviation and slum development.

Review of the available literature and official data shows that Punjab Government has failed to take benefit of most of the poverty alleviation schemes and programmes introduced during the last more than two decades. According to few evaluation studies of UBSP (Urban Basic Services for the Poor) and slum improvement in Ludhiana and Amritsar ( Sandhu 1988; IDC 1998; Sandhu and Singh 2004), there were following deficiencies in the implementation of poverty alleviation scheme of UBSP in Punjab:

Slum identification was not done according to well accepted criteria and similarly identification of beneficiaries was not according to the norms of the UBSP.

Inadequate support structure due to non-representation of beneficiaries, lack of inter sectoral representation and co-ordination with line departments, untrained and non-responsive resident community volunteers (RCVs), lack of networking within community organizations and poor community mobilization/participation.

The quality of training was poor and training provided for skill-upgradation was a mere formality. Such services as drainage and sanitation were poor in slums.

Sanctioning of loans was arbitrary and beneficiaries were not identified according to the criteria of the scheme. Judged by established norms, the majority of beneficiaries of loans, training and other facilities under UBSP were found negligible.

Leakages of loan money were as high as 12 percent. Delay in processing of loan applications, inadequate raw material inputs and poor marketing of products, were the other shortcomings.

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Skill upgradation was poor as training of women beneficiaries was limited only to stitching and sewing. Once trained, they were unable to utilize their skills, since there was no linkage between skill-upgradation and setting up of micro enterprises.

Points of Concern

There is substantial shortage of housing in Punjab. Calculated by the conventional method of the differential between number of census houses and number of households, it was a deficit of more than 34 thousand housing units in 2001 which is estimated to rise to one and a quarter lakh in 2011. Calculated by the new method of ideal nuclear housing needs, it was a deficit of over two and a quarter lakh housing units in 2001 which is estimated to rise to about 4 lakh units.

Viewed in terms of inadequate housing characterized by one-room tenement, overcrowding, poor structure and dilapidated conditions, the housing deficit was estimated to be over six lakh units in 2001 which is expected to rise to over 9 lakh units in 2011.

Proliferation of slums is another serious problem. As large as 23.6 percent of the population of 28 class I and class II towns was the slum population in 2001. It is not likely to be much different in 2011.

Ludhiana alone accounted for as many as 209 slums and their number is only likely to be more in 2011. Jalandhar, Amritsar, Batala, Abohar, Moga and Patiala are as well known for large number of slums and high percentage of slum population.

Although urban poverty has declined during the recent decades, the number of urban poor remains large. During 2004-05 the number of urban poor was over three and a half lakh, as reported by the Planning Commission. Not a small number, this is as calculated on the income parameter only. If non-economic measures like lack of housing, basic amenities and source of livelihood are factored in their number may increase a lot more.

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The socio-economic disparities are widening. During the period from 1993-94 to 2004-05 the value of Gini Coefficient, which is a measure of disparity, increased from 28.1 to 40.3. And this is a little more than the average of urban India at 37.6.

There is no great evidence of seriousness on the part of the government to effectively tackle the problem of urban poverty. This can be seen from the huge gap between the grants allocated and grants released, the latter being one-fourth of the former, among other things.

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V

URBAN GOVERNANCE

In order to assess the quality of urban governance in Punjab, it may be pertinent to first identify an urban governance index (UGI). The state of urban governance may then be seen in the light of that index. Here again it will be worthwhile to view urban governance from four perspectives: factual, citizens‟, councillors‟ and administrators‟.

Urban Governance Index

The index of urban governance cannot be much different from that of quality governance in general. Defining good governance at national level, the World Bank has enunciated the principles of democratic polity, enlightened policy making, executive integrity, transparency, accountability, civil society and rule of law (World Bank 1992). The Economic and Social Council for Asia and the Pacific (ESCAR) has added to the list the attributes of efficiency, effectiveness, responsiveness, equality and inclusiveness (ESCAP 2008). Along the same lines, attempts have been made to formulate an index of urban governance. Making a pioneering attempt in this direction, the United Nations Human Settlements Programme has identified the following indicators of urban governance:

Sustainability (balanced social, economic and environmental priorities)

Subsidiary (local autonomy and accountability) Equity (in resource allocation and empowerment of

vulnerable groups) Efficiency (management and service delivery/investment

in infrastructure)

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Transparency and accountability (transparent decision-making processes and access to information)

Civic engagement and citizenship (public participation, stakeholder involvement)

Security On the face of it, the above index appears to be fairly

acceptable as it is broadly in accord with the basic principles of good governance, except for the priority that it accords to sustainability and its concern for security. The pre-eminence accorded to sustainability is understandable in view of the fact that it is a construct of UN-Habitat, an agency which is committed to sustainability. The index, however, is overly formalistic as it places too heavy reliance on formal laws, processes and institutions, to the neglect of their actual implementation and operation, as rightly indicated by Gupta and Kapoor (2007). Apart from such global attempts, the National Institute of Urban Affairs has also taken some initiative towards evolving an urban governance index in Indian context. Drawing upon the municipal governance, NIUA‟s works have focussed on core municipal services and their delivery norms. However, these works have paid more attention to the physical infrastructure and services, largely ignoring social aspects of urban development. Taking into account the diversity of approaches at the national and international levels, Gupta and Kapoor (2007) have considered the following as appropriate attributes of urban governance: efficiency, effectiveness, responsiveness, equity and subsidiarity. By and large acceptable, their inventory misses out on two vital attributes, i.e., transparency and accountability.

In our view, quality governance is that which works for

the common good of the people. It is a multi-faceted construct comprising three dimensions: institutional, functional and ethical. The institutional dimension comprises participatory polity, effective planning agency managerial bureaucracy and vibrant civil society. Its functional dimension comprises two facets, i.e., goal-related and performance-related. At the level of goals, there is a broad agreement on the following: security, public services and development. Development is further envisaged to our two

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integral features, i.e., economic growth, sustainability, quality of life and equity along with inclusiveness. At the level of performance, the three attributes that matter are efficiency, effectiveness and responsiveness. Finally, the ethical dimension includes transparency, accountability and integrity (clean and corruption free). The above imperatives of quality governance can best be put in the form of the following diagram.

Attributes of quality governance

Institutional Functional Ethical

Participatory polity

Managerial

bureaucracy

Vibrant Civil

Society organizati

ons

Transparency

Accountability

Integrity

Goal-related Performance related

Efficiency Effectiveness Responsiveness Security Development

Economic growth

Sustainability Quality of life

Equity and Inclusiveness

Effective planning agency

Public Services

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The Punjab Scenario: Factual Picture

It will be apt to reflect on the quality of urban governance for development in Punjab. Let us have the factual picture first. To begin with the institutional structure of urban governance in Punjab, it comprises three kinds of organizations, i.e., state departments, parastatal organizations and local level bodies. The state departments include Town and Country Planning (TCP), Department of Housing and Urban Development (HUD) and Department of Local self Government (LSG). The parastatal organizations include mainly the Punjab Water Supply and Sewerage Board, among others. At the local level, there are urban local bodies (PWSSB) such as Municipal Corporations, Municipal Councils and Nagar Panchayats. Multiplicity of Planning and Development Agencies

There is the multiplicity of urban planning and development agencies. For instance, there are several agencies working for planning, such as Regional and Town Planning Board, Punjab Urban Planning and Development Authority (PUDA), besides Town and Country Planning department. The same is the case with urban development which involves agencies like Improvement Trusts and city-based development authorities like (GMADA) Great Mohali Area Development Authority, (GALDA) Great Area Ludhiana Urban Development Authority, etc. And let us not forget the ULBs which are envisaged as agencies of local level planning and development. Multiplicity of agencies apart, there is also a marked lack of inter-agency coordination. The result is a duplication of authority, overlapping jurisdictions, functional confusion, shifting responsibilities, lack of accountability and inter-agency misgivings and tensions. Further, it also results in multiplicity of rules and procedures, as every agency frames its own rules and procedures which are also often contradictory. This generates distortions in urban development. This fragmented character of urban planning, governance and development administration is also a source of immense problems to the people. The lack of coordination between Improvement Trusts and Municipal Corporation is a common example of it.

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Improvement Trust develops certain residential and commercial areas and hands them over to Municipal Corporations which the latter are usually reluctant to take over for one reason or another. This puts people to unnecessary harassment. Fragmented Functional Domain

The municipalities in Punjab are governed by Punjab Municipal (Amendment) Act, 1994, and Punjab Municipal Corporation (Amendment) Act, 1994. These two acts were brought after 74th CAA to strengthen the functional and fiscal domains of the municipalities in the state. The ULBs have been endowed with specific functions covering obligatory, regulatory, maintenance and developmental activities. The enforcement of building bylaws, registration of births and deaths, controlling of noxious trade and industries, regulating markets and slaughterhouses are a few important regulatory functions. The water supply, sewerage and drainage, street lighting and roads are the most important civic functions of ULBs. The functional domain of municipalities has been accorded a special constitutional significance in the CAA. Notwithstanding the existing legislation on the functional domain of municipalities, in actual operation it is not all that unambiguous. The state government has taken over a number of functions, which traditionally have been the domain of the municipalities. Even in the performance of functions which are constitutionally the functions of municipalities, such as water supply and sewerage, there is state control through PWSSB. The functional domain of ULBs in Punjab is fragmented, as it is marked by a variance from the XIIth Schedule of CAA. Table-1 lays it bare.

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Table-1 Divergence in the performance of municipal functions from the norm

of Article 243W of 74th CAA

Sl no

Municipal Functions listed in the XIIth Schedule of CAA

Performed by

1 Urban planning including town planning

Town and Country Planning/PUDA

2 Regulation of land use and construction of buildings

Town and Country Planning/PUDA

3 Planning for economic and social development.

Departments of Planning and Social Welfare

4 Roads and bridges Public Works Department (PWD)

5 Water supply for domestic, industrial and commercial purposes

PWSSB and ULBs

6 Public health, sanitation conservancy and solid waste

Solid waste management (ULBs), sewerage (PWSSB and ULBs)

7 Fire services ULBs

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

Departments of Forest, State Pollution Control Board, State Council for Science, Technology and Environment & ULBs

9 Safeguarding the interests of weaker sections of society, including the handicapped and mentally retarded

Social Welfare Department

10 Slum improvement and upgradation ULBs

11 Urban poverty alleviation ULBs

12 Provision of urban amenities and facilities such as parks, gardens and playgrounds

ULBs

13 Promotion of cultural, educational and aesthetic aspects

Departments of Culture, Education and Public Relations

14 Burials and burial grounds, cremations, cremation grounds and electric crematoriums

ULBs

15 Cattle ponds and preventions of cruelty to animals

ULBs

16 Vital statistics including registration of births and deaths

ULBs

17 Public amenities including street lighting, parking lots, bus-stops and public convenience

ULBs and Department of Transport

18 Regulation of slaughterhouses and tanneries

ULBs

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The participation of parastatals in municipal functional domain tends to dilute the authority and autonomy of the municipalities. It seems that state government lacks a will to empower the local governance. The quality of urban governance in Punjab is poor due to legal, fiscal, institutional and organizational weaknesses in the context of the 74th CAA. The state government has failed to transfer functions, funds and functionaries as envisaged in the 74th CAA. The bureaucracy has supervisory, controlling and executive powers over local governance under the existing municipal laws. Devolution of functions, and tax authority and fiscal autonomy to ULBs are neglected under existing laws. Some provisions of the 74th CAA like regular elections, reservation for women, SCs and STs, constitution of State Election Commission, State Finance Commissions and DPCs have been implemented but a lot needs to be done to enable the ULBs to work as institutions of local self government. The fragmented municipal functioning impairs autonomy of the local bodies. The town planning function has not been transferred to the ULBs. Municipalities have not been granted full functional financial autonomy. The recommendations of the First, Second and Third State Finance Commissions have not been implemented with result that municipalities are groaning under financial constraints, and are not able perform their functions efficiently. Ineffective Master Plans

Preparation of Master Plans has been an important strategy of urban planning. Accordingly draft master plans were prepared for 35 cities and towns in the state in the seventies but their non-statutory status rendered them ineffective. The department of Town and Country Planning reviewed earlier master plans and on that basis prepared new master plans for year 1985-2001 for some cities which were again reviewed in 1992 and 2000. The new master plans which were prepared for the period 2000-2021 are still pending because they reportedly lack legal backing for which reason they cannot be implemented. With the enactment of the Punjab Regional and Town Planning and

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Development (Amendment) Act, 2006, simpler legal frame work has been provided for the preparation of master plans for cities and towns of the state. Under this act, some master plans have been prepared by the Town and Country Planning Department. In addition to the above mentioned agencies, (PUDA) was also established in 1995 to take care of overall urban development in the state but still the other agencies are also working on the urban development. Under the umbrella of PUDA six local level development authorities have been created which include Greater Mohali Area Development Authority (GMADA), Greater Area Ludhiana Urban Development Authority (GALDA), Amritsar Development Authority (ADA) Jalandhar Development Authority (JDA), Patiala Urban Development Authority (PatUDA) and Bathinda Development Authority (BDA).

The state has not formulated a comprehensive urban

policy as yet. In the absence of an overall urban policy such type of urban development is inevitable. Urban development is a low priority area for the state. Human Development Report (Government of Punjab 2004) of the state was prepared and released through some consultants and there is not so much as even a mention of urban development in it.

The state keeps preparing Master Plans for its towns and cities. However, it is widely accepted that master planning method in India has not produced satisfactory physical environment and is not commonly used elsewhere (Rai 2010; Planning Commission 2008). Further, planners are of the view that “it is not well suited to rapidly growing cities and multi-jurisdiction urban agglomerations. The master plan concept has also not been useful in addressing India‟s large and widely spread slums. By locking in the supply of buildable land and space, the master plan inter-alia, inhibits the development of housing markets and contributes to proliferation of slums” (Planning Commission 2008). Keeping this in view, it is pertinent to address the need for integration of economic and spatial planning with a view to achieving a rational spatio-economic development of the state. In fact, the existing Town and Country Planning Department of the state does not have adequate strength of

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qualified planners and supporting staff to carry out the whole exercise of planning. To illustrate the point, we collected information about the number of planners in the department since 1970s. In July 2010, there were only 19 Town Planners against 53 sanctioned posts. In fact, situation was much better in 1970‟s when majority of sanctioned posts (56) were occupied in the State Town and Country Planning Department. Since 1970s the urban population has increased more than three times but number of town planners in place has plummeted to one-third. As per International Standards, it is desired that there should be one planner for 5000 urban residents (Ramanathan 2008) but in the state, there is one planner for 5,00,000 urban residents.

Further, master plans are prepared in the state in a very

casual manner. In the course of this study it was noted that master plan of one of the major cities of the state had no information about the existing land use of the city. Deeper probe revealed that master plan was prepared hurriedly on the orders of the High Court without following the prescribed procedure for the preparation of master plan. Given the scarcity of qualified planners and their supporting staff in the department this was bound to happen. Even the planners working in the department feel that they are dictated by their bureaucratic bosses in the formulation of the plans which compel them to plan by diluting the existing planning standards and norms. The planners feel that they have little say in the state development and they are collecting charges only for the change of land use for the state to accommodate various promoters who violate the existing norms of planning but have direct access to politicians and bureaucrats. This is mainly because the urban space is considered as a commodity which attracts investors, speculators and all those who have stakes in what has been termed as “Urban Fortunes” by Logan and Molotch (2007). In this process the planners who should be at the helm of affair get marginalized resulting in unplanned development.

According to a report (1974) of the state Town and

Country Planning Department in Ludhiana, Amritsar and Jalandhar cities, the percentage of planned developed area was

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only 21.93 per cent, 26.0 per cent and 26.3 percent, respectively. Further, this report also pointed out that as much as 15 to 20 percent area under development was without any basic services or amenities. Around 30 to 40 percent urban area was without water supply and 40 to 50 per cent was without sewerage system. Mr. Jagmohan, former Union Minister for Urban Development, made the following comments about Ludhiana city in 1998: “Its present population exceeds 1.5 million. It is the biggest money spinner in Punjab and a hosiery capital of the country. Its annual production in this area alone is about 10 billion. And yet, it is a city which has 50 per cent structures raised without any planning or regulation….The level of air pollution is four times more than the toleration limit.”

The mushrooming of unauthorized colonies is another

indication of the quality of urban governance, as it reveals failure of the governmental planning and development process. There has been a mushroom growth of unauthorized colonies in various towns of Punjab, as noted in chapter IV. The efforts made by the local and state Governments are too meagre to tackle the problem (Sandhu 1995,2003). Saini (1991) reports that despite huge investment in services through the environmental improvement of urban slum programmes, hardly one-third of the slum population in Ludhiana has benefited. It is evident from various studies (Saini 1991; Sandhu 1995, 2003; and IDC 1998) that objective criteria for identification of slums or urban poor are not followed and this consequently leads to the identification of non slum/non poor areas as slum/poor areas under political pressure and on the other hand real slums/poor are not identified and notified. As a result, budget meant for them is diverted to non slum/non poor.

According to Master Plan of Ludhiana city, two

observations are important:

It has been observed that more than 48 % city was built without any planning. Even 18% of the area covered by regulatory town planning schemes could not bear results to any acceptable planning and development standards and remained largely deficient in requisite services and

-- 99 --

facilities with encroachment and sale of land earmarked for public parks and open spaces dominating the development scenario.

It further reveals that since the developed land was far lower than the demand the process of haphazard and fast growth of Ludhiana brought under development large number of low lying areas otherwise unfit for development for residential purposes by low income groups resulting in emergence of slums facing the series of problems like flooding, drainage and sewerage even during the light rains.”

In case of Amritsar, various development initiatives taken in the form of town planning schemes, redevelopment schemes, and development schemes, building schemes and other schemes by various bodies have contributed to make 49 per cent of planned development in the city which is too meagre by any standard. Remaining 51 per cent of city area is still unplanned (Draft Master Plan of Amritsar 2010). In case of small cities and towns unplanned development is more prevalent than bigger towns because majority of them do not have any master plan to follow. Negligible Gains of JNNURM Funding

Further evidence of the rather uninspiring quality of urban governance in the State comes from its failure to take full advantage of the offer of central grant under the scheme of Jawaharlal Nehru National Urban Renewal Mission (JNNURM) due to lack of implementation of the mandated reforms.

JNNURM is an initiative of the Government of India,

launched in 2005, to fund 63 identified cities for developing infrastructure and basic services for the urban poor. It is a comprehensive Programme for encouraging reforms and fast track development of the identified cities in India which included 35 Metropolitan centres and 28 cities with a population of less than one million (state capitals, religious, historical and tourist

-- 100 --

cities). The Mission envisaged to focus on the development of urban infrastructure, service delivery mechanism, community participation and accountability of urban local bodies. Implementation of reforms agenda is central to JNNURM. The reforms address mainly the issues of urban governance, infrastructure and urban poverty in a sustainable manner. From the State of Punjab two cities, i.e., Ludhiana and Amritsar were selected under the Mission. The Mission is running into its 7th Year now and has completed more than two thirds of its seven year duration. Here is an attempt to present the progress of the projects launched in Ludhiana and Amritsar under the Mission.

Ludhiana and Amritsar corporations submitted the

proposals for various projects worth Rs.2053 crore and Rs.3150 crore, respectively for improving urban infrastructure, city public transport, and basic services for the poor. The centre is to contribute 50 per cent of the project cost provided the state agrees to the mandate of reforms which include devolution of power to the local bodies and introduction of user charges by the local bodies, besides e-governance and new accounting system in urban governance. The tables-2,3,4 show the progress of sewerage projects in Ludhiana in terms of work done and amount of money released by the local, state and central governments.

Table-2

Sewerage projects and treatment plants

Physical and Financial Progress up to October 2010

Cost (in crores)

STP at Balloke 105 MLD Bhattian: 50MLD

83.66

Sewer

Main sewer 34.7 KM Branch sewer 600 km

110.75

Other charges 8.20

Total Project cost 241.39

-- 101 --

Table-3 Financial status: share of funds sanctioned and released till 15th

October, 2010

S No Financial Source Sanctioned Released

1. Government of India 120.70 30.2

2. Government of Punjab 48.28 12.07

3. MC Ludhiana 99.53 33.34

Table-4 Work status on October 15, 2010

S No Scope of Work Present Status (Completed) Percentage

1. Main Sewer 34.7 kms

2.3 km 7%

2. Branch Sewer 600.00 kms

34.00 km 6%

3. STP at Balloke 79%

4. STP at Bhattian 74%

5. House connection not started 0% Sources: Punjab Water Supply and Sewerage Board, Ludhiana

The Government of India (GOI) released only 25 per cent

of the sanctioned grant. The PWS&SB Ludhiana made considerable progress in construction of sewerage treatment plants only. However, in other works like construction of main and branch sewers it made little progress. Release of GOI grant depends on utilization of released grant and availability of matching grants from state and local governments. Due to lack of matching grant from the state and local bodies much progress has not been made in various projects under JNNURM in Punjab.

An evaluation of JNNURM in the state reveals that

corporations gave priority to improvement of roads, construction of flyovers and elevated roads and some other civil projects over basic services for the urban poor. The state also dithered in implementing civic reforms, including devolution of power and administrative reforms for the local bodies as per mission guidelines. The detailed break up of JNNURM reforms and status of their implementation in Punjab as on 02/06/2010 is given in Tables-5, 6, 7, 8.

-- 102 --

Table-5 Implementation status of state-level mandatory reforms under

JNNURM State-level mandatory reforms Commitment

year/ Status

Implementation of decentralization measures as envisaged in the 74th CAA

i. Transfer of functions under XIIth Schedule ii. Constitution of DPCs iii. Constitution of MPCs iv. Transfer of City Planning Functions v. Transfer of Water Supply and Sanitation

3 3/ Achieved

3 3

Achieved

Repeal of Urban Land Ceiling and Regulation Act (ULCRA) Achieved

Reform of rent control laws balancing the interest of landlords and tenants

3

Rationalization of stamp duties: reduce it to less than 5% over 7 years

6

Enactment of Public Disclosure Law to ensure release of quarterly performance information to all stakeholders

3

Enactment of community participation law to institutionalize citizen‟s participation and introduce concept of area sabha

3

Source: Based on information provided at JNNURM webpage of MoUD

The state government is slow in implementing state level JNNURM reforms. Only two state level reforms have been implemented, that too partially. This is blocking the flow of JNNURM funds to the stare. Similar is the fate of the reforms at ULB level, as shown in Table-6.

Table-6

Implementation status of local government level mandatory reforms under JNNURM

Local government-level mandatory reforms Commitment year/ Status

Ludhiana Amritsar

Accrual-based, double-entry system of accounting

4/ Achieved

3

Introduce e-governance using IT applications, such as GIS/MIS

5 4

Property tax with GIS/ collection efficiency (85%) Property tax with GIS/ collection efficiency (90%)

5 5

5 5

Levy of responsible user charges to achieve operation and maintenance cost recovery (100%) over 7 years

5

5

-- 103 --

Local government-level mandatory reforms Commitment year/ Status

Ludhiana Amritsar

Water supply Solid waste

NA NA

Internal earmarking of funds in local government budgets for basic services for the poor

4 7/

Achieved

Provision of basic services to the poor, including security of tenure at affordable prices, housing, water, sanitation, education, health and social security

NA NA

Source: Based on information provided at JNNURM webpage of MoUD

The JNNURM reforms committed by Ludhiana and

Amritsar municipal corporations have also not been implemented within the specified time frame. The reforms implemented at municipal levels do not have much impact on fiscal and functional domains of the concerned municipalities. The optional reforms (Table-7) have also not been implemented.

Table-7

Implementation status of local government level optional reforms under JNNURM

Local government level optional reforms Commitment year/ Status

Ludhiana Amritsar

Revision of bylaws to streamline local building approvals

i. Streamlining the Approval Process ii. Mandatory rainwater harvesting in

all buildings

4/ Achieved 4

4/ Achieved 4

Simplification of procedure; conversion of land to nonagricultural purposes

3 4

Introduction of Property Title Certification system in local governments

7

4

Earmarking 20%-25% of land for economically weaker section/low-income group category with cross-subsidization

5/ Achieved 5/ Achieved

Introduction of computerized process of registration of land and property

4/ Achieved

4/ Achieved

Rainwater harvesting to make mandatory and bylaws for reuse of recycled water

4 4

Administrative reforms 7 7

Structural reforms 3 3

Public Private Partnership 4/ Achieved 4/ Achieved Source: Based on information provided at JNNURM webpage of MoUD

-- 104 --

Some of the state and ULB level mandatory and optional reforms have been implemented by the states and ULBs in India. State government of Punjab and JNNURM towns of Ludhiana and Amritsar have also implemented some JNNURM reforms committed in the MoAs. But the pace of implementation of JNNURM reforms in Punjab is very slow in comparison to other states and ULBs in India. Table-8 gives the status of JNNURM Reforms in 2010.

-- 105 --

Table-8 Status of Punjab vis-à-vis other states on JNNURM reforms, 2010

JNNURM Reform Type of Reform

No. of cities/ states

Name of states/ cities initiating this reform Status of Reforms

in Punjab

Shift city planning and service delivery to local government

State mandatory

13 Andhra Pradesh, Assam, Chhattisgarh, Gujarat, Himachal Pradesh, Kerala, Madhya Pradesh, Maharashtra, Tamil Nadu, West Bengal, Bihar, Chandigarh, Haryana

No

Accrual accounting Local government mandatory

23

Hyderabad, Vijayawada, Vishakhapatnam, Ahmadabad, Rajkot, Surat, Shimla, Kochi, Thiruvananthapuram, Bangalore, Mysore, Bhopal, Indore, Ujjain, Nagpur, Greater Mumbai, Bhubaneswar, Jaipur, Coimbatore, Madurai, Chennai, Allahabad, Kolkata

No

Property tax Local government mandatory

14

Hyderabad, Vijayawada, Vishakhapatnam, Rajkot, Vadodara, Pune, Coimbatore, Madurai, Chennai, Agra, Allahabad, Chandigarh, Lucknow, Asansol

No

User charge Local government mandatory

7 Vishakhapatnam, Nasik, Pune, Greater Mumbai, Chennai, Madurai, Vishakhapatnam

No

E-governance Local government mandatory

11 Hyderabad, Vijayawada, Vishakhapatnam, Ahmadabad, Rajkot, Surat, Greater Mumbai, Coimbatore, Madurai, Chennai, Kolkata

No

Internal earmarking for poor

Optional 44

Hyderabad, Vijayawada, Vishakhapatnam, Chandigarh, Raipur, Surat, Vadodara, Faridabad, Kochi, Thiruvananthapuram, Bangalore, Mysore, Bhopal, Indore, Jabalpur, Ujjain, Nagpur, Nanded, Nasik, Pune, Greater Mumbai, Kohima, Amritsar,Bhubaneswar,Puri,Jaipur,Ajmer, Coimbatore, Madurai,Chennai,Dehradun,Haridwar,Nainital,Agra, Allahabad, Kanpur,Lucknow, Mathura, Meerut,Varanasi, Asansol, Kolkata

Amritsar only

-- 106 --

JNNURM Reform Type of Reform

No. of cities/ states

Name of states/ cities initiating this reform Status of Reforms

in Punjab

Simplify building bylaws

Optional 21 Hyderabad, Vijayawada, Vishakhapatnam, Guahati, Amritsar, Ludhiana, Jaipur, Ajmer, Ahmadabad, Rajkot, Surat, Vadodara, Bhopal, Indore, Nagpur, Nasik, Pune, Asansol, Kolkata, Patna, Delhi

Ludhiana Only

Property title cert. Optional 2 Chandigarh, Rajkot

No

Simplify land conversion

Optional 23

Hyderabad, Vijayawada, Vishakhapatnam, Ahmadabad, Rajkot, Surat, Vadodara, Kochi, Thiruvananthapuram, Bangalore, Mysore, Bhopal, Indore, Jabalpur, Ujjain, Jaipur, Ajmer, Coimbatore, Madurai, Chennai, Asansol, Kolkata,

No

Computerize land registration

Optional 17 Hyderabad, Vijayawada, Vishakhapatnam, Ahmadabad, Rajkot, Surat, Vadodara, Shimla, Bangalore, Mysore, Nagpur, Nanded, Nasik, Greater Mumbai, Jaipur, Coimbatore, Madurai, Chennai

No

Public Disclosure Law

State mandatory

3 Andhra Pradesh, Assam, Gujarat

No

Community Participation Law

State mandatory

6 Andhra Pradesh, Assam, Gujarat, Maharashtra, Tripura, Uttar Pradesh

No

Implement 74th CAA State mandatory

18 Andhra Pradesh, Bihar, Chandigarh, Gujrat, Kerala, Madhya Pradesh, Maharashtra, Tamil Nadu, Tripura, West Bengal, Assam, Goa, Haryana, Himachal Pradesh, Karnataka, Orissa, Rajasthan, Uttar Pradesh

No

Administrative structure

Optional 5 Nasik, Madurai, Coimbatore, Chennai, Mysore

No Source: Based on information provided at JNNURM webpage of MoUD

-- 107 --

Punjab lags behind other states in implementing JNNURM reforms at state and municipal level. This is largely due to lack of political will at state level. This has nevertheless, adversely affected the flow of JNNURM funds as also the quality of local urban governance in the state.

According to statistics available in the Ministry of Housing and Poverty Alleviation, Government of India, Punjab Government has drawn Rs. 62 crore only against an allocation of Rs. 617 crore whereas other states like Andhra Pradesh, Gujarat and Maharashtra have already exhausted the funds earmarked for them. In fact, Punjab is at the bottom of the state tally. Isher Judge Ahluwalia (2010), Chairperson, Board of Governors, Indian Council for Research on International Economic Relations (ICRIER), laments, “Even after five years of the implementation of the mission, Punjab failed to develop any project that could be implemented under JNNURM. It is one state that failed to submit even a single development project where funds released by the Centre under (JNNURM) could be utilized. More saddening is the fact that despite Amritsar being the mission city of JNNURM, it did not have a single project that was submitted to the Centre under the mission” (Indian Express 2010). In much the same vein, Sethi (2011) also notes that Punjab has utilised only 6 per cent of the over Rs 444 crore sanctioned to it since 2005 under BSUP, the lowest in the country. Due to the state's lukewarm response to the schemes, the amount of funds that it could receive under the JNNURM steadily decreased since 2005, with only a trickle now left for the ongoing schemes in Ludhiana and Amritsar. Funds for the new schemes proposed by the state government under JNNURM were refused by the Centre last year following which no new projects under the Mission have been undertaken in the state. This speaks volumes of the apathy and inefficiency of the managers of urban governance in Punjab. More evidence of such an apathetic attitude of the urban administrators can be illustrated by the following deal of the Amritsar Municipal Corporation and PWSS Board.

-- 108 --

Negligent Functioning at Local Level Usually projects are not implemented due to lack of funds.

Sometimes, funds are there but projects are not implemented due to inefficient and ineffective governance on the part of the powers that be. Here is an illustration of it. The Japan Bank of International Cooperation (JBIC) in consultation with the Govt. of India had agreed to provide loan of Rs. 360 crore to augment Amritsar Sewerage Project in 2006. Agreement was signed by all the Stakeholders such as JBIC, Punjab Water Supply and Sewerage Board, Municipal Corporation, Department of Local self Government, Govt. of Punjab, Ministry of Urban Development, Govt. of India. Main objective of project was to provide reliable sewerage services by carrying out construction of sewerage treatment plants and augmenting sewerage system for improving the living conditions of people, especially the poor in Amritsar municipal area. The Japanese team studied the area thoroughly and provided all the details of the project. They had also agreed to provide the technical assistance for this purpose. Project was to start in 2008. For the Project, PWSSB was the nodal agency and it was responsible for implementation of (i) sewerage treatment plants, pumping stations and sewer (including household connections), (ii) consulting services (including asset survey).

Municipal Corporation Amritsar (MCA) was the

implementing and operation and Maintenance agency. In the project MCA is responsible for (i) social development and community participation, and (ii) institutional improvement. As per the time schedule the project was planned to be completed in March 2012. For this purpose, MCA appointed an Institutional Improvement Manager in August 2008 who joined MCA in the same month. The MCA also appointed Community Development-cum-Public Awareness Expert by following the due procedure in November 2008. He accepted the appointment but MCA did not finalize agreement till date. He wrote many letters to MCA about the assignment but the latter did not even care to reply. On the other hand, Institutional Improvement Manager worked for 13 Months and provided many important inputs for the improvement of various systems in MCA. But he was removed

-- 109 --

unceremoniously from his service on the pretext that “MCA had not been able to appoint other supporting Experts” and therefore his services were not required (for details please see the box). MCA paid him salary for two months only. Remaining salary for 11 months was not released. This shows the poor concern of the authorities for the project meant for the provision of basic services for the poor. The project was to start in 2008 and to be completed in 2012. But it did not take off due to the lack of concern of Nodal agency (PWSSB) and implementing agency (MCA). This case reveals the inefficient functioning and apathetic attitude of PWSSB and MCA about the projects which do not cater to their (various officials) interests (indirect benefits). Had this project been implemented as per its schedule it would have resulted in covering the whole city, especially the urban poor (including majority of slums) under the sewerage system and it would have improved the quality of life of the residents. According to a recent report (Bhandari 2011), regarding the above mentioned project, all the stake holders have agreed to implement the project at revised cost of Rs. 697 crore. This only shows one thing: who cares for the additional cost, the project, the people, and the poor in particular.

The following case study reported by Sandhu sheds more

light on it.

Poor Urban Governance in Punjab: Case of Missed Opportunity

With the assistance of Japan International Cooperation Agency (Earlier Japan Bank of International Cooperation), the Municipal Corporation of Amritsar (MCA) along with PWSSB had undertaken Amritsar Sewerage Project for the city. It focused on infrastructural developments (construction of sewers, sewerage treatment plants) as well as institutional improvements. For undertaking institutional improvements and reforms within MCA, the funding agency had approved appointment of an Institutional Improvement Manager within MCA and even agreed to reimburse the expenses incurred on the component. In line with the guidelines, an Institutional Improvement Manager was selected and appointed in August 2008. During his working, a situational analysis of operation of MCA was undertaken and

-- 110 --

deficiencies were observed with regard to problem of illegal and unauthorized water and sewerage connections, water leakages, improper recording of properties, deficiencies in issuing of birth/death certificates, deficiencies in measurement of solid waste, lack of asset recording and management etc. After analysis, various measures to measure, improve and monitor the improvements were suggested. This included use of plumbers in identification of illegal/unauthorized water connections, asset recording and zoning for water distribution and assessment of leakage, GIS based property tax systems, e-governance, double entry accounting etc. and even pursued JICA to provide additional funding. This allocation even included surrendering allocation of house rental meant for him. He then somehow pursued MCA management (Commissioner and SE OM) to have some of these proposals approved by House. On approval of the House, even tendering of GIS based property tax system was undertaken by MCA. No doubt, in the process, the Institutional Improvement Manager received stiff resistance from some of the officials in MCA, who could perceive that on implementation of some of these reforms/improvements – would result in improvement of revenue of MCA but would reduce their indirect earnings. It is interesting to note that in spite of commitment of JICA to reimburse expenses on hiring of institutional improvement manager, he was not paid his salary for 11 months (paid for two months out of his working for more than 13 months – August 2008 to September 2009> further, he was unceremoniously removed from his services with a lame excuse that “MCA has not been able to appoint other supporting Experts” and therefore his services are not required. He was even not offered a three month notice, which was mandatory as per his contract. In spite of his repeated requests, his payments have not been released by MCA till date. It is intriguing to note that “hiring of other Experts” was the responsibility of Commissioner, MCA and not institutional manager. This is a clear case of missed opportunity by MCA due to bad governance of MCA and vested interests of its officials, where they could see increase in revenue of MCA at the cost of their indirect earnings. The reasons of his removal prove bad scenario of governance in Punjab, where nothing was done to the person (Commissioner, MCA), who should have been made accountable by Administration, but services of a person (with no authority to appoint) were terminated. Source: Based on personal interview by Sandhu (2011)

-- 111 --

Financial Drawbacks Financial commitment and management is an important measure of governance performance. Some of its operational indicators may be the extent to which the state government has taken advantage of the grants offered by the central government under various schemes pertaining to urban development, the amount of grant allocated by the state government to urban local bodies, the amount of grant actually released, the gap between the income and expenditure of the local bodies, and the level of financial dependency of the urban local bodies on the state government. On all these counts there is evidence galore of dismal performance of governance at various levels, especially of the governance at the state level. In respect of the first indicator, we have seen in chapter IV as well as earlier in this chapter how the state government has failed to take full advantage of the grants allocated to it by the Central government, partly on account of its poor implementation of the mandatory reforms and partly for its failure to submit required proposals. Similarly, the state government has as well faulted on releasing the full grant allocated by it to the ULBs as also on devolving to the ULBs their share of taxes, as is clear from Table-9.

Table-9

Gaps between funds due and released to ULBs from 2001-02 – 2005-06

(Rs in Crore)

Year/ Item

Funds Due Funds Released

Gaps Share of State Taxes

Share of Excise duty & Auction money

Grants of 11th

CFC & 12th

CFC

Total

Share of State Tax

Share of Excise duty & Auction money

Grants of 11th

CFC & 12th

CFC

Total

2001-02 48.36 60.47 10.94 119.77 3.40 37.98 --- 41.38 78.39

2002-03 75.76 65.96 10.94 152.66 61.97 60.49 16.42 138.88 13.78

2003-04 81.90 66.80 10.94 159.64 - 16.65 -- 16.65 142.99

2004-05 92.40 67.49 10.94 170.83 -- 16.80 39.51 56.31 114.52

2005-06 14.50 68.97 34.20 117.67 30.00 265.09 0.69 295.78 178.11

Total 312.92 329.69 77.96 720.57 95.37 397.01 56.62 549.00 171.57 Source: Information supplied by Dept. of local Govt./ Report of the TPFC

^ Year 2005-06 related to 12th

CFC.

-- 112 --

The municipalities on their part have also failed to raise their revenue from taxes and user charges and continue to spend more than their own income. Take, for instance, the case of their expenditure on O&M of water supply and sewerage as against their income from these sources.

Table-10 Income and expenditure on O&M of water supply & sewerage

(Rs in Crore)

Sr. No

Year Wages/ Salaries

O & M Other Exp

Total Exp

Total Income of Water & Sewerage

% age of Income to Total Exp

1 2001-02 45.71 62.71 43.73 152.15 60.05 39.46

2 2002-03 48.56 70.91 35.03 154.50 61.73 39.95

3 2003-04 52.18 85.86 42.34 180.38 79.06 43.83

4 2004-05 59.21 79.92 49.38 188.51 78.37 41.57

5 2005-06 62.33 101.35 46.93 210.61 100.77 47.85

Total 267.99 400.75 217.41 886.16 379.98 42.88

Source: The Report of the Third Punjab Finance Commission

The expenditure on O&M of water supply and sewerage

continues to be much higher than the revenue income from the same. The percentage of income to total expenditure never touched even 50% during 2001-02 to 2005-06. The state government tried to revise water and sewerage charges in May 2003 as reported in Tables-11, 12, 13 and 14.

Table-11 User charges for un-metered water connections (domestic)

Plot size

Rate per connection per month (in Rs.)

Financial year

2003-04 2004-05 2005-06 2006-07 2007-08

Upto 5 Marla 50.00 55.00 60.00 70.00 100.00

Above 5 Marla and upto 10 Marla

75.00 80.00 90.00 100.00 105.00

Above 10 Marla but less than 1 Kanal

100.00 110.00 120.00 130.0 140.00

1 Kanal and above Only metered connections

-- 113 --

Table-12 User charges for metered water connections (domestic)

Financial year 2003-04 2004-05 2005-06 2006-07 2007-08

Rate (Rs. Per kilo litre per month)

2.00 2.60 3.20 3.50 3.80

Note: i. Meter shall be arranged and installed by consumer at his own cost after proper

testing and seal by the concerned local body. Cost of testing and seal will also be borne by the consumer.

ii. In case of defect in water meter, the first bill shall be issued on average basis of the last three bills and thereafter if meter is not got repaired by beneficiary at his own cost the rate shall be three times the average charges.

iii. Even consumer with less than 1 Kanal plot size has option to go for metered connection.

Table-13

User charges for sewer connections (domestic)

Plot size

Rate per connection per month (in Rs.)

Financial year

2003-04 2004-05 2005-06 2006-07 2007-08

Upto 5 Marla 50.00 55.00 60.00 65.00 70.00

Above 5 Marla and upto 10 Marla

75.00 80.00 90.00 100.00 105.00

Above 10 Marla but less than 1 Kanal

100.00 110.00 120.00 130.0 140.00

1 Kanal and above

Equal to water charges

For own sources of water supply

Equal to water charges of metered water supply

(a) Commercial and Industrial Connections

For institutional, commercial and industrial connections, only rates as metered connections shall be charged and sanctioned as per note under Table-12 and rates will be double the above rates for water supply (Table-11 & 12) and sewerage (Table-13).

(b) For Yellow Card Holders

The rates as given in Table-14(below) shall be 50% of the normal rates as applicable up to 5 marla house (Table-11 and 13.

-- 114 --

Table-14 Rates of water supply and sewerage for yellow card holders

Particulars 2003-04 2004-05 2005-06 2006-07 2007-08

Water charges (Rs. Per connection per month)

25.00 27.50 30.00 35.00 50.00

Sewerage charges (Rs. Per connection per month)

25.00 27.50 30.00 32.50 350.00

Source: Compiled on the basis of rates specified in the notification.

The state government revised the water supply and sewerage charges in 2003 and „held in abeyance‟ the same just before the Parliamentary elections in 2004. This was not single case of populist measure the state government had given the exemption to large number of consumers in 2006. This further affected the pricing and cost recovery mechanism and pushed these services in vicious cycle.

Citizens’ Perceptions

The quality of urban governance can best be judged from citizens‟ perceptions about it. Whatever be the factual reality, it is the perceived reality that matters the most. Peoples‟ perceptions indeed provide a litmus test of the quality of governance, as they reflect the performance of governance in their eyes. We conducted a survey in Amritsar to ascertain peoples‟ views about the state of city governance there. Data were collected by means of interview schedule from a representative sample of 540 respondents. The study sought to know about respondents‟ level of satisfaction with the working of municipal governance, its effectiveness, transparency, accountability and responsiveness. Table-15 presents the data pertaining to it.

Table-15 Percentage distribution of respondents by their level of satisfaction

with municipal governance Satisfaction Level

Effectiveness Transparency Accountability Responsive to

public needs

High 1.67 0.74 1.30 0.93

Moderate 38.89 31.67 26.67 28.89

Low 59.44 67.59 72.04 70.19

Total 100.00 100.00 100.00 100.00

-- 115 --

On all the performance indicators of the municipal governance the level of satisfaction of a vast majority of the respondents was low. As many as 59.44 percent of the respondents perceived it as ineffective, 67.59 percent as non-transparent, 72.04 percent as lacking on accountability and 70.19 percent as poor on responsiveness.

When asked about their source of contact for any work with the municipal corporation, their responses varied as shown in Table-16.

Table-16 Distribution of respondents by their source of contact for municipal

service

Source of contact Number

Out of 540 Percentage

Councillors 266 49.26

Friendly channels 141 26.11

Use bribe 104 19.26

Corporation / department officials 101 18.74

Use political connections 34 6.30

Bribe the corporation officials 104 19.26

Bribe and other sources 33 6.11

Most of the respondents approach councillors for getting their work done with the municipal corporation. This is understandable because they see the councillors as their representatives. Around one-fourth of the respondents bank on friendly channels. A more important point to note is that as many as 104 respondents reported to use bribe. Only 18.74 percent of the respondents reported to approach the corporate officials directly. The relatively better access of the respondents to the councillors as compared with the officials is further indicated by the data on the respondents‟ level of satisfaction with the corporation vis-à-vis the councillors. Table-17 presents the data pertaining to it.

-- 116 --

Table-17 Percentage distribution of respondents by their level of satisfaction

with the working of Municipalities Corporation and Councillors

Level of satisfaction Working of Municipal

Corporation

Working of Councillors

Highly Satisfied 0.56 1.48

Quite Satisfied 2.41 4.26

Satisfied 41.11 47.96

Not satisfied 45.00 34.07

Highly dissatisfied 10.93 12.22

More of the respondents were dissatisfied with the

performance of the Municipal officials than with that of the councillors. This usually happens when service providers (officials) are not responsive and empathetic to public needs, concerns and hardships. In that case the service users seek the help of politicians (councillors). Direct link between the service users and service providers is the measure of quality governance which seems to be at a missing in the present scenario.

A more elaborate and deeper probe into the quality of urban governance in Punjab is provided in the IDC report (Gupta and Kapoor 2007). It presents data on citizens‟ perception about various facets of urban governance from 6 cities. We can do no better than cite the conclusions of that report which incidentally are consistent with our observations. These are as follows:

“Satisfaction level with procedures, rules and regulations in regard to sanction of building plans, system of assessment and collection of property tax, grant of tehbazari licences, etc. was low.

Information regarding procedures and systems for obtaining sanction/approvals was not easily available.

Awareness regarding first contact for required information was good but there was poor awareness about the next step for resolution of problems.

Majority of the respondents dissatisfied with the grievance redressal systems.

-- 117 --

Prevalence of both bribe and approach was admitted by a majority of the respondents.

Corruption was more prevalent among the middle level officials and top level officials than the street level workers.

Corruption, faulty management/poor work culture among the employees and lack of proper planning for development work were the main reasons for deterioration of services/facilities”.

Councillors’ Perceptions

In our consultation meet with the councillors, we made an attempt to ascertain their perceptions about the state of local governance. In all 39 councillors participated in the meet. Here are their perceptions.

Table-18

Perceptions of councillors about the state of local governance

Aspects of Local Governance

Councillors

Yes(%) No(%) Partial(%)

Implementation of CAA 7(17.9) 30(76.9) 2(5.1)

Adequacy of powers of councillors

7(17.9) 29(74.3) 3(7.7)

Constitution of ward committees

10(25.6) 29(74.3) -

Awareness about DPC 24(61.5) 15(38.5) -

Functional value of DPC 9(23.1) 27(69.2) 3(7.7)

Preparation of annual plan by Municipality for DPC

8(20.5) 31(79.5) -

E governance in ULBs 12(30.8) 27(69.2) -

Awareness about JNNURM

18(46.2) 21(53.8) -

People participation in urban planning and management

16(41.0) 23(59.0) -

-- 118 --

More than three-fourths of the councillors reported that despite the passage of Punjab Municipal Act 1994 in accord with the 74th Constitutional Amendment Act to empower ULBs, there is no full implementation of it which means that the locus of power still lies with the state government rather than with municipal bodies. Little wonder that about 75 percent of the councillors reported that they had no powers. Further 74.3 percent of the respondents said that there existed no ward committees. A majority of the respondents (61.5%) were aware of the existence of District Planning Committees (DPCs) , but as many as 69.2 percent said that they were not quite functional. About the preparation of annual plan by the municipal corporations for consideration of district planning committee, close to 80 percent said they did not do it. There was no practice of e-governance at the municipal level according to roughly 70 percent of the respondents. Notably, a majority of the councillors (53.8%) expressed their lack of awareness about Jawaharlal Nehru National Urban Renewal Mission (JNNURM). 59 percent of the councillors admitted that there was no such thing as peoples‟ participation in urban planning. This account of the councillors‟ perceptions about the lack of their powers, constitutional functions and awareness about the operative urban development plans and programmes speaks volumes of the poor quality of urban local governance. It warrants the need for capacity building of the councillors through professional training programmes, apart from streamlining the system of local governance. Another observation that is worth noting, which came out from the group discussions of the councillors and their panel reports, was about their discontent with obstructive functioning of the state executive wings, the parastatal organisations, and most importantly, the executive officers at the municipal level itself. Their grievance against the state administration was that it often slept over the proposals submitted by the ULBs, unduly delayed them, or turned them down without appreciating the local realities and area needs. They pleaded for setting time-limit for consideration and disposal of the proposals. Their grievance against the parastatal organizations like Electricity Board and Punjab Water Supply and Sewerage Board (PWSSB) was that they

-- 119 --

break the municipal roads for their purposes at will without doing anything to repair it properly. Highly critical of the latter, many councillors suggested that the sewerage wing should be separate from the PWSSB and merged with some other department. Their grievance against the local level administration was that it did not forward their proposals and stifled them at its own level. A more serious problem which most of the councillors stated without mincing words was that of rampant practice of corruption at the level of local bureaucracy as well as at other levels. They openly talked about 20 percent commission (corruption) for any approval as an institutionalised practice. In fact, they cited numerous instances of it along with the names of certain bigwigs. Incidentally, all these perceptions of our respondents are in stark agreement with those observed in the IDC study (Gupta and Kapoor 2007). At any rate, these are indications of the low quality of urban governance at various levels.

Officials’ Views

In a separate consultation meet with the municipal executives, attended by 32 of them, we sought their views about the state of local governance. Table-19 presents the data related to it.

Table-19 Officials’ perceptions about the state of local governance

Local governance Officials

Yes(%) No(%) Partial(%)

Implementation of CAA 1(3.1) 10(31.3) 21(65.6)

Adequacy of powers of executives 11(34.4) 8(25.0) 13(40.6)

Constitution of ward committees 9(28.1) 23(71.8) -

Awareness about DPC 27(84.4) 4(12.5) 1(3.1)

Functional value of DPC 21(65.6) 6(18.7) 5(15.6)

Preparation of annual plan by Municipality for DPC

11(34.4) 21(65.6) -

Use of IT/E governance in UHBs 15(46.9) 13(40.6) 4(12.5)

Awareness about JNNURM 28(87.5) 4(12.5) -

Adequacy of JNNURM funding 9(28.1) 22(68.7) 1(3.1)

People participation in urban planning and management

9(28.1) 21(65.6) 2(6.3)

-- 120 --

Four inferences follow from the data in Table-19. First, most of the executives seemed to be in a sort of agreement with the councillors about the partial (65.6%) or total (31.3%) lack of implementation of the 74th Constitutional Amendment Act in Punjab, the difference of larger percentage of the respondents indicating partial implementation notwithstanding. Secondly, it is amusing to note that a large number of the executives too perceived their own powers to be either not adequate (25%) or partially adequate (40.6%). Thirdly, the views of most of the executives were in consonance with those of the councillors about the lapses on the part of the municipalities in properly discharging their responsibilities. While more than 70 percent of the executives said that ward committees were not constituted, as many as 65.6 percent reported that the municipal committees did not prepare annual plans for submission to the District Planning Committee (DPC). Fourthly, the data on the awareness level reveal that compared to the councillors a much larger proportion of the executives were aware about the identity and functional role of the DPCs as also about the JNNURM. Finally, it is important to note that more than two-thirds of the executives mentioned about inadequacy of JNNURM funding for urban development in the state. It is a different matter though that they were caught on a wrong footing about it in the course of group discussions.

In fact, group discussion was revealing in some very important ways. For instance, when the executives were confronted with the question whether the JNNURM funding was inadequate or is it the case that the state administration failed the state to qualify for JNNURM funding, they turned apologetically defensive. It is a pity that the state administration floundered on fulfilling the conditions laid down for the grant. It failed to prepare project proposals on its own or hire the services of the empanelled consultant agencies for the purpose, thus failing to submit the needed proposals. On its part, the state polity as well dithered to put in effect the mandatory reforms needed for the release of the phased instalments of the sanctioned grant. Whatever the reasons, the loser is the state and ultimately the people.

-- 121 --

Another revealing highlight of the group discussion was the expression of the unanimous view of the respondents about the lack of inter-departmental coordination. The problem was reported to be even more acute in respect of the working of parastatal organizations, especially in relation to the PWSSB. A tendency of passing the buck to the other department/agency was indeed quite noticeable even in the course of group discussions. More than anywhere else, the problem of mutual distrust and disharmony was at its worst in the relationship between the councillors and the executives. Like the councillors, the executives expressed their own grouses against the unreasonable and professionally untenable manner of working of the councillors. A number of executives observed that the councillors on account of their localistic, uninformed and constrained vision often came in the way of scientific city planning. To quote one of them: “if we go by the opinions/considerations of the councillors, rational city planning is not possible”. A senior professional of the PWSSB observed that water supply should be made part of the state budget and managed by the state, for MCs cannot do it at their level. Whatever be the reality, one thing is clear from the above: not all is well with the municipal level administration and that it cannot but adversely affect the quality of urban governance here. Yet another feature of the group discussion was the notable omission of any reference to corruption in municipal administration, with just a solitary incidental exception. One of the executives in all seriousness suggested the introduction of „Tatkal Scheme‟, as the railway reservations, to counter the problem of corruption in respect of service delivery to those who need any service on an urgent basis. Among other matters that figured prominently in the panel reports was the need for high-tech municipal administration, including introduction of e-governance. Shortage of administrative staff was also mentioned as a problem that merits attention.

-- 122 --

From the various accounts, including the factual and the perceptual, it follows that the quality of urban governance at all levels in the state leaves something to be desired.

Snapshot

The institutional framework of urban governance at the state level is marked by avoidable multiplicity of planning and development agencies and lack of interagency coordination.

The relationship between the planning and the administrative wings have been marked more by mutual distrust and misgivings than by mutual respect and understanding.

At the local level, the municipal governance lacks substantive, functional and financial autonomy, despite the semblance of its formal structure in accordance with the 74th Constitutional Amendment Act. For most part, the local governance has to work under the constraint of the state control.

There persists an underlying tension between the municipal councillors and the executive officials with each wing trying to assert its power but the latter eventually having an upper hand.

The functional scenario is characterised by its partial dissonance with the normative framework of municipal functions laid down in the XIIth Schedule.

Master plans as an instrumentality of urban development have failed to deliver their optimal promise partly due to their limited application in few towns only, partly due to their casual and overly physicalist formulation, and partly due to bureaucratic constraints and indifferent implementation.

Punjab has lagged behind many other states in taking due advantage of JNNURM grants as much on account of its partial implementation of mandatory reforms as its inability to submit requisite project proposals for the purpose.

-- 123 --

On performance indicators, governance at various levels leaves something to be desired in respect of efficiency, effective delivery of services and responsiveness.

In respect of ethical imperatives, corruption looms large at various levels, undermining the image of urban administration and the pace and quality of urban development.

In respect of all above points there is n a remarkable agreement among all the stakeholders‟ viz., citizens, councillors and officials. The documentary evidence as well shows the same picture.

-- 124 --

VI

MUNICIPAL FINANCES

The municipal finances can be classified as revenue receipts from own sources, revenue from other sources such as transfers from central and state governments as transfers and devolutions and capital receipts such as loans etc and revenue and capital expenditure. The revenue receipts can be classified into tax revenue and non tax revenue. According to the Section 90 of The Punjab Municipal Corporation Act of 1976, Municipal Corporation can levy taxes/charges such as property/house tax, octroi (already abolished and replaced with the share from Value Added Tax), octroi on consumption of electricity, sale of diesel and petrol, taxes on animals and vehicles, taxes on advertisement other than advertisement published in newspapers, tax on sanction of building plans, and development tax/charges on the increase of value of urban lands on the execution of development or improvement works. In addition to these taxes, Municipal Corporations can also levy taxes on professions, trade and callings. Similarly, The Punjab Municipal Act of 1911 amended from time to time governs the ULBs other than Municipal Corporations. The ULBs can levy taxes/ charges such as property/ house tax, tax on professions, trade and callings, taxes on animals and vehicles (other than motor vehicles), tax on sanction of building plans, and scavenging tax etc. In addition to these taxes ULBs can also levy taxes and charges as assigned to them from time to time by the state government.

The trends of revenue receipts in Punjab described by the First, Second and Third Punjab Finance Commissions and the data provided by the Department of Local Government depict grim picture of revenue receipts from Octroi (which was abolished later), property tax, user charges, etc., and report higher revenue expenditure. The trends and issues in revenue income and expenditure of ULBs are discussed here in five sections:

-- 125 --

Section I: Municipal Finances during 1989-90 to 1993-94

Income of ULBs: The First Punjab Finance Commission (FPFC)

described the total income of ULBs from 1989-90 to 1993-94 as in

Table-1.

Table-1

Total revenue of ULBs from 1989-90 to 1993-94 (Rs. in crores)

Sr. No.

Total Revenue 1989-90 1990-91 1991-92 1992-93 1993-94

1. Tax Revenue 87.93 102.32 116.04 126.98 159.75

(59.80%)

2. Non-Tax Revenue 20.65 23.46 25.32 32.23 43.98

(16.46%)

3. Additional Excise Duty on Liquor

8.57 13.10 15.26 19.58 33.10

(12.39%)

4. Grants, Loans & Other Transfers

10.78 26.95 20.77 29.53 30.33

(11.35%)

Total 127.93 165.83 177.39 208.32 267.16

(100.00%) Source: Report of the First Punjab Finance Commission (1995)

Table-2

Tax revenue from various sources during 1993-94

Sr. No.

Source of Tax Revenue Income

(Rs. in crores) Percentage

1. Property Tax 20.01 13%

2. Octroi 137.35 86%

3. Advertisement Tax 0.50 -

4. Vehicle/ Animal Tax 0.12 -

5. Entertainment Tax 0.30 -

6. Show Tax 0.30 -

7. Others 1.17 1%

8. Total 159.75 100%

Source: Report of the First Punjab Finance Commission (1995)

-- 126 --

According to the FPFC “the finances of municipalities in the state of Punjab are in unsatisfactory position. The fiscal indiscipline and inefficiency is reflected in low revenue collection to demand ratios and, on the other hand, continuously rising expenditure on administration. The property tax yields are extremely low on account of a narrow base and the ubiquitous problems of assessment and administration. The municipalities have barely put into effect the system of “user charges” for recovering the cost incurred on the provision of different services including the regulatory services”. Since the FPFC considered the shared taxes as predictable and important source of income for municipalities it recommended sharing of five state taxes, including the motor vehicle tax, stamp duty, electricity duty and entertainment tax. It also recommended the reforms in property tax and user charges. It also proposed streamlining of functional relations between the parastatals and the ULBs. The commission recommended instituting a system of regular data collection, maintenance and dissemination. The FPFC made the recommendations for the period of 1996-97 to 2000-01. Table-3 shows the gap in share of taxes recommended by the FPFC and amount released.

Table-3

Gap in share of taxes recommended by the First Punjab Finance Commission and amount released to ULBs (Rs. in crore)

Parti-culars

Gap in share of five state taxes and

amount released to ULBs

Gap in share of auction

money/excise duty and amount

released to ULBs

Total Gap

Budgetary

Provisions

Amount

Released

Gap (A)

Budgetary

Provisions

Amount

Released

Gap (B)

Budgetary

Provisions

Amount

Released

Gap (A)

1996-97 11.89 0.00 11.89 39.36 41.34 -1.98 51.25 41.34 9.91

1997- 98 50.97 36.26 14.71 58.33 43.71 14.62 109.30 79.97 29.33

1998-99 45.57 10.82 34.75 59.98 45.04 14.94 105.55 55.86 49.69

1999-00 40.00 13.18 26.82 63.44 38.34 25.10 103.44 51.52 51.92

2000-01 32.22 17.78 14.44 61.96 63.44 -1.48 94.18 81.22 12.96

Total 180.65 78.04 102.61 283.07 231.87 51.20 463.72 309.91 153.81 Source: Compiled from the Report of the Second Punjab Finance Commission (2002)

-- 127 --

Table-4 shows the gap in share of taxes recommended by the Tenth and Eleventh Finance Commissions grants for selected years and amount released by the state government to the ULBs.

Table-4

Shortfall in the grants recommended by the Central Finance Commissions (Rs. in crore)

Particulars

Tenth Finance Commission Grants Eleventh Finance

Commission Grants Total

1996-97 1997-98 1997-98 1999-00 2000-01 2001-02

Grants Re

commended 7.65 7.65 7.65 7.65 10.94 10.94 52.48

Received by ULBs

- - 7.65 9.56 5.74 - 22.95

Shortfall -7.65 -7.65 - +1.91 -5.20 -10.94 -29.53

Source: Compiled from the Report of the Second Punjab Finance Commission (2002)

The data on various revenue sources show that share of

five state taxes (20%) as recommended by the FPFC was not devolved to the ULBs and against the original budget provisions of Rs.180.65 crore, only Rs. 78.04 crore was devolved to the ULBs. It left a shortfall of Rs. 102.61 crore during 1996-97 to 2000-01. The general purpose, specific purpose and incentive grants recommended by the FPFC were also not transferred to the ULBs. Similarly gap was noticed in implementation of recommendation regarding increase of the additional excise duty payable to the ULBs from 16 per cent to 20 percent on Indian made foreign liquor. The share of auction money and excise duty was released to the ULBs to the tune of Rs. 231.87 crore leaving a deficit of Rs 51.20 crore. The recommendations such as rationalization of user charges, property tax, reforms in octroi and other taxes were not implemented. System of rent based Annual Rateable Value (ARV) still continues for assessment of property tax. The deficiencies in administration, collection and management of tax and non-tax revenues continued. Tax on professions, trades, callings and employments were not introduced. The ULBs were also unable to exploit the full potential of tax on advertisements and hoardings. The system of periodic revision of user charges was not started. The taxation of central government properties was never started at state level and only a few municipalities raised some service

-- 128 --

charges on the same. The recommendations regarding abolition of Improvement Trusts within the area under Punjab Urban Planning and Development Authority (PUDA) were also not implemented. The state control on the fixation of rates and base of local municipal taxes continued. Thus most of the recommendations of FPFC accepted by the state government were not implemented.

Expenditure of ULBs: According to the FPFC all ULBs incur unduly large expenditure on staff. The expenditure on salaries, wages and contingencies in 1993-94 was 52% in municipal corporations and even 57% in nagar panchayats. Only 13% was spent on water supply and 1% on slum improvement. Despite the Government instructions to limit expenditure on establishment to a fixed percentage of the budget, the municipalities continued with expenditure on staff under development works. As a result, the expenditure on establishment and salaries in 1993-94 as share of the total income increased over the expenditure in 1989-90, while expenditure on critical services registered a decline (Table- 5).

Table-5 Expenditure as a Proportion of Income

(Rs in crore)

Description

1989-90 1993-94

Total expenditure

% total income

Total Expenditure

% total income

Salaries, wages and contingencies

47.92 37 108.50 41

Public health and sanitation

24.87 19 36.45 14

Water supply 16.94 13 30.50 11

Roads and bridges

10.69 8 24.58 9

Others 18.76 15 29.29 11

Total 119.18 93 229.32 86 Source: Report of the First Punjab Finance Commission (1995)

The excessively provincialised services and caderisation with fixed strength as determined by the Government does not leave initiative for municipalities to reduce their expenditure on

-- 129 --

establishment. The haphazard recruitment of temporary staff added the financial burden on ULBs and affected the provision for infrastructure development and services.

Section II: Municipal Finances during 1996-97 to 2001-02

Income of ULBs: The Second Punjab Finance Commission (SPFC) described the revenue income of ULBs from 1996-97 to 2001-02 as in Table-6.

Table-6 Total revenue income of urban local bodies from 1996-97 to 2001-02

(Rs. in crore)

Items 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02

Estimates

1. Tax Revenues

a) Octroi 217.63 226.45 271.65 406.69 456.82 531.72*

(55.83) (52.82) (54.27) (59.57) (55.53) (61.03)

b) Property tax 34.7 34.92 42.42 54.31 66.73 66.64

(8.90) (8.15) (8.47) (7.95) (8.12) (7.65)

c) Share from auction money and excise duty on liquor

41.34 (10.61)

43.71 (10.20)

45.04 (9.00)

38.34 (5.62)

63.44 (7.71)

60.99 (7.00)

d) Others 2.75 4.26 4.31 3.51 3.07 3.50

(0.70) (0.99) (0.86) (0.51) (0.37) (0.40)

e) Total (a+b+c+d) 296.42 309.34 363.42 502.85 590.06 662.85

(76.04) (72.16) (72.60) (73.65) (71.73) (76.08)

2. Non-Tax Revenues

a) Water supply & sewerage charges

30.05 31.18 38.04 43.68 57.73 59.62

(7.71) (7.27) (7.60) (6.40) (7.02) (6.84)

b) Others including capital receipts

43.31 44.29 56.92 87.63 101.52 112.12

(11.11) (10.33) (11.37) (12.83) (12.34) (12.87)

c) Total (a+b) 73.36 75.47 94.96 131.31 159.25 171.74

(18.82) (17.60) (18.97) (19.23) (19.36) (19.71)

3. Revenues from Own Sources

Total (1e+2c) 369.78 384.81 458.38 634.16 749.31 834.59

(94.86) (89.76) (91.57) (92.88) (91.09) (95.79)

4. Share from taxes as per recommendations of the FSFC

-- --

36.26 (8.46)

10.82 (2.17)

13.18 (1.93)

17.78 (2.16)

-- --

5. Grants:

-- 130 --

Items 1996-97 1997-98 1998-99 1999-00 2000-01 2001-02

Estimates

a) As per recommendations of 10th & 11th Finance Commissions

-- --

-- --

7.65 (1.53)

9.56 (1.40)

5.74 (0.70)

10.95 (1.26)

b) For Centrally Sponsored and State Plan schemes

18.89 (4.85)

5.4 (1.26)

22.42 (4.48)

23.75 (3.48)

45.77 (5.56)

23.25 (2.67)

c) Others 1.14 2.24 1.3 2.1 4.01 2.4

(0.29) (0.52) (0.25) (0.31) (0.49) (0.28)

d) Total (a+b+c) 20.03

(5.14)

7.64 31.37 35.41 55.52 36.6

(1.78) (6.26) (5.19) (6.75) (4.21)

6. Total Revenue (3+4+5d)

389.81 428.71 500.57 682.75 822.61 871.19

(100.00) (100.00) (100.00) (100.00) (100.00) (100.00) Source: Report of the Second Punjab Finance Commission (2002) Note: i) Figures in parentheses indicate % age to total revenue income in respective years.

ii) *Revenue from octroi for the year 2001-02, includes grants of Rs. 140.51 crore against losses, on account of abolition of octroi (1 December 2001 to 31 March 2002)

The SPFC recommended the transfer of 4 per cent of the

net receipts from all state taxes to the local bodies during the period 2002-03 to 2005-06. On this account the estimated amount of taxes to be transferred to the ULBs was estimated at Rs. 324.27 crore. In addition, the SPFC recommended the setting up of an incentive fund of Rs. 10.00 crore for the ULBs to promote municipal resource mobilization and reforms. The SPFC also suggested performance-linked incentives, computerization to check tax evasion and improve tax administration and also economy in expenditure. Although recommendations of the SPFC were accepted by the state government, however, the same were not implemented in full.

The data on revenue income from tax and non tax

revenues and share of taxes and grants shows huge shortfall against the estimated devolutions to ULBs recommended by the FSFC for this period. The non implementation of FPFC recommendations by the state government regarding property

-- 131 --

tax reforms, user charges and devolution of due share resulted in this gap. The SPFC made the recommendations for the period of 2001-02 to 2005-06. Table-7 shows the gap in the share of taxes recommended by the SPFC and amount released.

Table-7

Funds due and released to ULBs from 2001-02 to 2005-06

(Rs in Crore)

Source: Information supplied by Deptt of local Govt./ Report of the TPFC

^ Year 2005-06 related to 12th

CFC.

The share of state taxes has been hit most and out of Rs 412.92 crores only Rs 95.37 crores were transferred to the ULBs and that too in a highly unpredictable manner. Even Central Finance Commission‟s money has not been devolved to ULBs in toto.

At the same time there was a huge gap in the grants allocated and released by the Government of India and Government of Punjab to the ULBs for urban development and infrastructure during 2001-02 to 2005-06 as shown in Table-8.

Funds Due Funds Released

Total Gap

in funds due and

funds released

Year/ Item

Share of

State Taxes

Share of

Excise duty & Auction money

Grants of 11th CFC &

12th CFC

Total

Share of

State Tax

Share of Excise duty & Auction money

Grants of 11th CFC

& 12th CFC

Total

2001-02 48.36 60.47 10.94 119.77 3.40 37.98 --- 41.38 78.39

2002-03 75.76 65.96 10.94 152.66 61.97 60.49 16.42 138.88 13.78

2003-04 81.90 66.80 10.94 159.64 - 16.65 -- 16.65 142.99

2004-05 92.40 67.49 10.94 170.83 -- 16.80 39.51 56.31 114.52

2005-06 ^

14.50 68.97 34.20 117.67 30.00 265.09 0.69 295.78 -178.11

Total 312.92 329.69 77.96 720.57 95.37 397.01 56.62 549.00 171.57

-- 132 --

Table-8 Grants released by the Government of India & State Government

to ULBs for Urban development and Infrastructure (2001-02 to 2005-06)

(Rs. in Crore)

Sr. No

Year

Government of India

Government of Punjab

Total Gap in allocations and release Allo-

cated Rele-ased

Allo- cated

Rele- ased

Allo- cated

Rele- ased

1 2001-02 65.53 16.74 48.02 3.67 113.55 20.41 93.14

2 2002-03 93.82 29.27 29.37 2.79 123.19 32.06 91.13

3 2003-04 94.58 26.13 306.39 0.09 400.97 26.22 374.75

4 2004-05 121.27 11.96 11.79 50.83 133.06 62.79 70.27

5 2005-06 78.89 15.86 68.33 72.01 147.22 87.87 59.35

Total 454.09 99.96 463.90 129.39 917.99 229.35 688.64

Source: Report of the Third Punjab Finance Commission (2006)

Out of total Rs 917.99 crore allocated for central and state government schemes and programmes for the urban development and infrastructure only Rs 229.35 crore were released during 2001-02 to 2005-06.

Expenditure of ULBs: Table-9 depicts the municipal expenditure on general administration, tax collection, provision of services and debt servicing.

Table-9

Total expenditure of Urban Local Bodies from 1996-97 to 2001-2002 (Rs. in crore)

Components of Expenditure 1996-1997

1997-1998

1998-1999

1999-2000

2000-2001

Estimates 2001-02

1. General Administration 15.42 17.86 26.09 28.97 37.37 39.98

2. Tax Collection 35.9 39.14 50.85 59.54 49.75 52.24

3. Provision of Services 261.64 244.45 256.93 424.63 457.16 530.31

4. Debt Servicing

a) Interest 2.78 2.8 1.55 1.58 1.67 2.70

b) Repayment of Principal 6.86 7.2 8.07 6.84 6.87 7.17

c) Total (a+b) 9.64 10.00 9.62 8.42 8.54 9.87

5. Miscellaneous 46.17 49.19 61.72 70.59 175.74 150.1

Total Expenditure (1+2+3+4c+5)

368.77 360.64 405.21 592.15 728.54 782.5

Source: Report of the Second Punjab Finance Commission (2002)

-- 133 --

Higher cost of establishment is a crucial issue. In 2000-01 it was reported to be 42.03 per cent of the total own revenue. Similarly, cost of establishment was 39.57 per cent of the total expenditure in the same year. Although Local Government Department fixed the limit of a maximum of 35 per cent of the total expenditure to be spent on salaries, large number of municipalities were spending much higher than the limit. Another crucial issue is excessive caderization with fixed strength of the staff which results in higher expenditure on staff. The FPFC recommended several measures to reduce expenditure on the establishment to limit the same upto a permissible percentage of the income, but these were not adopted. Normally cadre strength of various services is inflated and state government does not make serious efforts to check it.

Section III: Municipal Finances during 2001-02 to 2005-06

Income of ULBs: The Third Punjab Finance Commission described the

revenue income of ULBs from 2001-02 to 2005-06 as in Table-10.

Table-10

Revenue of Urban Local Bodies from 2001-02 to 2005-2006 (Rs in Crore)

Sr. no

Components of Receipts

2001-02 2002-03 2003-04 2004-05 2005-06 Remarks

1 Tax Revenue

A Octroi 375.86 451.39 478.38 520.08 537.33 -

B House tax 65.85 70.10 76.12 76.36 80.88 -

C Advertisement tax

0.33 0.30 0.31 0.45 1.20 -

D Vehicle and animal tax

0.86 1.11 1.07 1.18 1.22 -

E

Development tax on the increase in urban value by development work

1.32 1.65 0.18 2.10 2.78 -

F Any other 8.76 7.87 10.13 9.42 10.29 -

Total Tax Revenue

452.98 532.42 566.19 609.59 633.70 -

2. Non tax Revenue excluding Capital receipt

A Water and sewerage charges

60.05 61.73 79.06 78.37 100.77 -

-- 134 --

Sr. no

Components of Receipts

2001-02 2002-03 2003-04 2004-05 2005-06 Remarks

B Building application fees

15.20 18.05 18.66 21.40 38.44

C Tehbazari 4.49 4.98 5.08 5.48 5.76 -

D Trade licenses 3.35 2.60 2.39 3.01 3.49 -

E Rent receipt 10.31 8.79 9.70 10.68 10.51 -

F Fees, fines and other non tax receipt

37.06 48.50 38.22 37.18 51.42 -

G Interest receipts 1.12 1.02 2.22 2.89 3.15 -

Total Non Tax Revenue

3 Capital receipts 26.00 9.18 19.35 31.46 97.29 -

4 Own Resources(1+2+3)

610.58 687.27 740.87 800.08 944.93 -

5

Share from auction money and excise duty on liquor

37.98 60.49 16.65 16.80 265.09^

^Higher amount owing to release of backlog

6

Share from taxes as per recommendation of 2nd SFC

3.40 61.97 * * 30.00

*Funds not release by

Punjab Government

7

a)

Grants Recommendation of 11th Finance Commission

--

16.42

--

39.51

0.69

**Out of 39.51 crore,10.94

crore relates to 2003-2004

b)

From centrally sponsored and state plan schemes

20.41 32.06 26.22 62.79 87.87 Details are

given in table- 6.10

c) Others (MPLAD + Untied Funds)

34.31 33.79 20.20 22.01 13.04 -

d) Total Grants (a+b+c)

54.72 82.27 46.42 124.31 101.96 -

8 Total Resources (4to7)

706.68 892.00 803.94 941.19 1341.98 -

9

Own Revenues as percentage of Total Revenue (Sr. no. 4,8)

86.40 77.05 92.15 85.08 70.41 -

10 Revenue as %age of State Non- Primary Sector

1.43 1.48 1.45 1.43 1.54 -

Source: The Report of the Third Punjab Finance Commission

The revenue trend shows that Octroi was the main source during 2001-02 to 2005-06. But it was abolished on September 1, 2006 and replaced by share in Value Added Tax (VAT). It was

-- 135 --

recommended that 10% share of VAT would flow into Punjab Municipal Fund and apportionment of this amount among ULBs would be based on the proportionate earnings from Octroi of the ULBs during the year 2005-06. It was then expected to be translated in to Rs 550 crore and which would be increased by 15% annually and any deficit would be met by the state government. But it has not happened the way it was recommended. Only Rs 472.17 crore came to the ULBs in 2006-07 (Table-11). The second important source of tax revenue is property tax (tax on land and building) but it has stagnated over a period of time and has not grown due to non-adoption of area based/ capital value based system for assessment of property tax. Similarly state government has given exemptions to self occupied non-rented properties and many other type of properties. Other sources of taxes are nominal and highly unpredictable.

Table-11 Percentage share of main components in total revenue of ULBs

(Percentage) Sr. no

Components of Receipts 2001-02 2002-03 2003-04 2004-05 2005-06

1 Tax Revenue 64.10 59.69 70.43 64.77 47.22

2 Non tax Revenue (excluding receipts shown under Sr. no3)

18.62 16.33 19.32 16.90 15.94

3 Capital receipts 3.68 1.03 2.41 3.34 7.25

4 Revenue from own resources (1+2+3) 86.40 77.05 92.61 85.01 70.41

5 Share from auctions money and excise duty

5.37 6.78 2.07 1.78 19.75

6 Share from taxes as per recommendations of SPFC

0.48 6.95 * * 2.24

7

Grant: a) As per recommendations of 11th

Finance commission -- 1.84 -- 4.20 0.05

b) For centrally sponsored and state plan scheme

2.89 3.59 3.26 6.67 6.55

c) Others (MPLAD + Untied Funds) 4.86 3.79 2.51 2.34 1.00

d) Total Grants (a+b+c) 7.75 9.22 5.77 13.21 7.60

Total 100.00 100.00 100.00 100.00 100.00

Source: The Report of the Third Punjab Finance Commission

The non-tax revenues are less than 25%, in which water supply and sewerage charges and building application fee constitute major constituents. Revenue from water supply and sewerage charges has stagnated during the last one decade and

-- 136 --

growing only nominally. The state government has not taken any interest in revising the water tariffs which should have taken place at regular intervals. No efforts have been made to supply meter based water supply. On the contrary, the state government has rather given exemption to the consumers in various categories. For example, households having size of less than 5 marla were exempted from paying water supply and sewerage charges in 2006. With this decision the O&M recovery of water supply and sewerage suddenly reduced from about 60% to 36.60%. Tehbazari fee and trade license fee are very nominal and are not growing. Overall non tax revenue has shown even declining trend over a period of time except in two years in which it increased marginally.

The share from auction money on liquor also shows an

erratic trend, which shows that the state government has been withholding the due share of ULBs as recommended by the State Finance Commission. It seems that the state government is not serious about transferring the committed funds to the ULBs. The borrowings/loans taken by the ULBs are negligible. It seems that due to poor fiscal base and outdated urban management practices ULBs are unable to raise funds from the capital market. Nevertheless, ULBs need huge funds for funding growing needs of urban infrastructure and services as rightly estimated by all the State Finance Commissions of Punjab and State Development Report prepared for the Planning Commission, Government Of India.

The TPFC also recommended the direct devolutions to be

made by the state government to cover the cost of running the local bodies at present levels, and to cover the cost of O&M of existing infrastructure. The assessment of the TPFC was that transfer of 4 per cent of the state‟s net tax collections reduced by the statutory contribution to the Municipal Fund in lieu of Octroi, and some proceeds from sale of liquor and vends, may be adequate for this purpose. Own resource mobilization by levying a consumption based tax, adoption of unit area method of assessment of PT, recovery of O&M, billing and collection in case of user charges, incentives to the ULBs proportional to the results

-- 137 --

achieved, metering of all water connections, rate fixing powers to municipalities, imposition of profession tax, economy in expenditure, setting up of a quasi legal authority on the pattern of Lokpal, deprovincialization of all posts (except Commissioners in Municipal Corporations, Executive Officers and Class I officers), setting up of an implementation committee to ensure implementation of Commission‟s recommendations, capacity building were some other recommendations of the TPFC. However, most of these recommendations of the TPFC have not been implemented so far. Expenditure of ULBs: The expenditure of ULBs on various items shows grim picture. The expenditure on general administration increased from 15.42 crore in 1996-97 to Rs 37.37 crore in 2000-01 to further 53.08 crore in 2005-06. Similarly expenditure on tax collection has grown much larger. The expenditure on provision of services is not growing as per the projections by the last two Finance Commissions leaving the huge deficiencies in the same. In the provision of services the expenditure on salaries and O&M is much higher than the income from respective services (Table-12).

Table-12 Expenditure of Urban Local Bodies

(Rs in crore) Item 2001-02 2002-03 2003-04 2004-05 2005-06

A. General Administration

1. Salaries and Wages 23.63 25.18 26.12 29.64 31.85

2.Other expenditures 17.87 15.45 16.18 21.04 21.23

Total A (1+2) 41.50 40.63 42.30 50.68 53.08

B. Expenditure on Tax Collection

51.72 50.77 53.69 60.56 64.48

C. Interest Payments 4.32 5.25 6.52 6.83 8.00

D. Provision of Services

a. Water supply and sewerage

1. Salaries and Wages 45.71 48.56 52.18 59.21 62.33

2. O & M 62.71 70.91 85.86 79.92 101.35

3. Other expenditure 43.73 35.03 42.35 49.38 46.93

Total a (1+2+3) 152.15 154.50 180.39 188.51 210.61

b. Sanitation

1. Salaries and Wages 121.87 122.00 130.58 141.48 154.64

2. O & M 13.14 13.16 15.56 18.44 21.51

3. Other expenditure 3.70 3.39 4.42 5.48 6.73

Total b (1+2+3) 138.71 138.55 150.56 165.40 182.88

-- 138 --

Item 2001-02 2002-03 2003-04 2004-05 2005-06

c. Roads and bridges

1. Salaries and Wages 26.20 27.95 28.88 30.34 33.34

2. O & M 49.05 36.96 43.63 47.72 70.54

3. Other expenditure 67.48 63.62 59.68 64.20 102.40

Total c (1+2+3) 142.73 128.53 132.19 142.26 206.28

d. Street lighting

1. Salaries and Wages 3.06 3.35 3.99 4.36 5.24

2. O & M 28.16 32.89 37.81 37.52 47.16

3. Other expenditure 11.70 11.68 12.81 14.62 17.87

Total d (1+2+3) 42.92 47.92 54.61 56.50 70.27

e. Fire services

1. Salaries and Wages 9.26 10.28 10.24 10.95 11.54

2. O & M 0.77 0.58 0.64 0.62 1.24

3. Other expenditure 0.42 0.38 0.19 0.27 0.36

Total e (1+2+3) 10.46 11.24 11.07 11.84 13.14

f. Other services

1. Salaries and Wages 23.75 23.13 26.18 28.28 34.19

2. O & M 21.67 19.08 17.45 18.32 25.77

3. Other expenditure 31.85 18.67 21.05 24.97 37.78

Total f (1+2+3) 77.26 60.88 64.68 71.57 97.74

Grand Total D(a+b+c+d+e+f)

564.23 541.62 693.50 636.08 780.92

E. Other Current Expenditure

(specify those amounting to more than 10% of total expenditure)

1) Octroi (on electricity) 1.41 1.50 2.07 2.89 3.15

2) O & M 1.46 1.21 1.42 1.34 1.15

3) Others 16.56 9.61 16.23 12.05 21.58

Total E (1+2+3+4……..) 19.44 12.32 19.72 16.28 25.89

F. Repayment of Loans

1.Loans from State Government

1.46 0.27 0.11 0.23 1.97

2. Loans from financial institutions

10.98 4.20 8.73 8.58 28.62

3. Other loans 8.32 3.64 4.16 5.25 9.69

Total F (1+2+3) 20.75 8.11 13.00 14.06 40.27

Grand Total (A+B+C+D+E+F)

701.96 658.70 728.73 784.49 972.64

Source: The Report of the Third Punjab Finance Commission

The expenditure on water, sanitation and roads has siphoned off major share of expenditure which is already on lower side. Expenditure on debt servicing is nominal which shows that ULBs are raising negligible funds from the capital market to finance infrastructure and services.

-- 139 --

Table-13 Establishment costs of Urban Local Bodies

(Rs. in Crore except rows 1, 6 & 7)

Sr. No

ITEM 2001-02 2002-03 2003-04 2004-05 2005-06

1 Total Staff Strength(number) 34526 36573 33292 33093 32854

2 Total Expenditure on Salaries

300.05 321.59 321.48 353.98 386.60

3 Pension contributions remitted & other retirement benefits paid

22.97 27.46 28.51 37.68 41.99

4

Liability outstanding of person and retirement benefits (for both provinicialized and non- provincialized

5.38 6.82 8.93 14.27 13.32

5 Total expenditure on establishment including pension benefits

328.40 355.87 358.52 405.93 441.91

6 Total expenditure on Establishment as percentage of total expenditure (%)

46.78 54.03 49.20 51.74 45.43

7 Total expenditure on Establishment as percentage of total own revenue (%)

53.78 51.78 45.16 50.74 46.77

Source: The Report of the Third Punjab Finance Commission

Establishment expenditure as a percentage to total revenue is crossing all the limits. It is eating most of the income of the ULBs and leaving little for the developmental works.

Table-14

Income and expenditure on O&M of water supply & sewerage

(Rs in Crore)

Sr. No

Year Wages/ Salaries

O & M Other

Expenditure

Total

Expenditure

Total Income of Water &

Sewerage

% age of Income to

Total Expenditure

1 2001-02 45.71 62.71 43.73 152.15 60.05 39.46

2 2002-03 48.56 70.91 35.03 154.50 61.73 39.95

3 2003-04 52.18 85.86 42.34 180.38 79.06 43.83

4 2004-05 59.21 79.92 49.38 188.51 78.37 41.57

5 2005-06 62.33 101.35 46.93 210.61 100.77 47.85

Total 267.99 400.75 217.41 886.16 379.98 42.88 Source: The Report of the Third Punjab Finance Commission

-- 140 --

The expenditure on O&M of water supply and sewerage continues to be much higher than the revenue income from the same. The percentage of income to total expenditure never touched even 50% during 2001-02 to 2005-06.

Section IV: Municipal Finances during 2006-07 to 2010-11

Income of ULBs: The data provided by the Department of Local Self Government, Punjab based on the information compiled for the Fourth Punjab Finance Commission (4th PFC) described the revenue income of ULBs from 2006-07 to 2010-11 as in Table-15 and Table-16.

Table-15 Total Revenue of Urban Local Bodies

(Rs in Crore)

Sr.

No.

Item Receipts for the year

2006-07 2007-08 2008-09 2009-10 2010-11

(Projected)

A TAX REVENUE

1. PUNJAB Municipal Fund (10% of VAT)

472.17* 568.06 638.42 700.32 797.28

2. Octroi on petrol & diesel/electricity

83.85 87.32 128.90 138.50 164.60

3. House tax 89.02 130.40 133.55 142.82 167.75

4. Advertisement tax 7.11 11.79 11.42 11.55 14.11

5. Show tax/ Entertainment tax

0.41 0.16 0.10 0.08 0.09

6. Other taxes 1.54 1.83 1.71 2.32 2.69

Total A-Tax Revenue (1 to6)

654.10 799.56 914.10 995.59 1146.52

B NON-TAX REVENUE

1. Water supply charges 54.55 68.50 60.91 62.73 66.39

2. Sewerage charges 18.59 24.39 24.27 22.30 23.98

3. Development/External development fee/ charges

63.12 21.76 25.54 38.05 38.15

4. Trade/pure food license fee

3.15 3.50 3.24 3.68 3.87

5. Bus adda fee 5.85 6.27 6.58 6.51 6.86

6. Building application fee

51.87 42.10 53.53 57.60 60.66

7. Tehbazari fee 5.57 6.19 5.78 5.68 5.98

8. Road cutting charges 1.32 2.64 2.34 1.53 1.61

9. Malba fee 0.96 0.83 1.02 0.84 0.88

-- 141 --

Sr.

No.

Item Receipts for the year

2006-07 2007-08 2008-09 2009-10 2010-11

(Projected)

10. Fee on mobile towers 0.18 0.28 0.39 0.38 0.40

11. Other fees 18.87 11.44 22.33 18.17 19.13

12. Cess on fire services 0.56 0.60 0.67 0.71 0.75

13. Rent receipts/lease amount

11.90 13.41 13.57 14.98 15.77

14. Interest receipts 4.17 3.46 15.11 17.86 18.81

15. Fines &other non tax receipts

27.64 19.23 17.07 19.09 20.10

TOTAL B- NON TAX REVENUE (1 to 15)

268.30 224.60 252.35 270.11 283.34

C SALE OF CAPITAL ASSETS

23.21 15.33 85.90 31.82 39.06

TOTAL OWN REVENUE (A+B+C)

954.61 1039.49 1252.35 1297.52 1468.92

D

SHARE OF EXCISE DUTY & AUCTION MONEY IN LIEU OF OCTROI ON LIQUOR

68.78 68.37 0.00 64.53 154.55@

E BORROWINGS/ LOANS

17.28 17.28 13.83 17.02 17.84

F

SHARE FROM TAXES AS PER RECOMMENDATIONS OF TPFC

25.00 28.75 0.00 0.00 0.00

TOTAL REVENUE (A+B+C+D+E+F) (--Grants)

1056.67 1150.44 1269.37 1379.89 1639.96

G GRANTS

1. Recommendations of 12th &13th Finance Commission

51.30 34.20 51.47 17.10 75.60

2. From centrally sponsored and state plan schemes

43.82 243.73 671.67 233.37 298.15

Other (MPLAD United Funds)

8.14 8.98 13.09 9.25 9.86

Total G- Grants (1 to 2) 103.26 286.91 736.23 259.72 383.61

TOTAL REVENUE (A+B+C+D+E+F+G)

1159.93 1437.35 2005.60 1639.61 2023.57

Total Own Revenue as %age of Total Revenue

81.52

72.32 62.44 79.14 72.59

Source: Office of the DLG and The Report of the Fourth Punjab Finance Commission *this figure comprise of Rs.199.05 crores of octroi charges for the 1st five months and Rs.272.52 crores of VAT for the remaining seven months. @Actual received during the year

-- 142 --

The revenue trends from Punjab Municipal Fund (10% of VAT), started in lieu of abolition of Octroi, are much lower than the expected sum of Rs. 550 crore from Octroi in 2006-07. While the actual income of Octroi was Rs 537.33 crore in 2005-06 as 10 percent of VAT, it decreased drastically in 2006-07 to Rs 472.17 crore only. The Octroi on petrol, diesel and electricity which was Rs 83.85 crore during 2006-07 rose to Rs 87.32 crore during 2007-08. However, it shows better growth in 2008-09 (Rs 128.90 crore). House tax was growing slowly but it showed little better growth after 2007-08. On the other hand, the revenue from water supply decreased drastically after 2006-07 on account of the populist policies of the state government. The income from sewerage charges as well continued to be low.

Other sources of tax and non-tax revenues are nominal.

There are many items of non-tax revenue but they continue to be erratic and poor. In comparison to the total tax revenue which continues to grow, the non tax revenue declined after 2006-07, though it grew slowly in subsequent years.

Table-16

Revenue of Urban Local Bodies during 2006-07 to 2010-2011 (Rs in Crores)

Sr. No.

Components of receipts/Years

2006-07 2007-08 2008-09 2009-10 2010-2011

(Projected)

1. Tax Revenue 654.10 (56.38)

799.56 (55.63)

914.10 (45.58)

995.59 (60.72)

1146.52 (56.66)

2

Non-Tax Revenue (excluding capital receipts)

268.30 (23.13)

224.60 (15.62)

252.35 (12.58)

270.11 (16.47)

283.34 (14.00)

3 Capital receipts 23.21 (2.00)

15.23 (1.07)

85.90 (4.28)

31.32 (1.94)

39.06 (1.93)

4 Revenue from own sources (1+2+3)

945.61 (81.52)

1039.49 (72.32)

1252.35 (62.44)

1297.52 (79.13)

1468.92 (72.59)

5

Share from excise duty and auction money in lieu of octroi on liquor

68.78 (5.93)

68.37 (4.76)

0.00 (0.00)

64.53 (3.94)

154.55 (7.64)

6 Borrowings/ loans

17.28 (1.49)

13.83 (0.96)

17.02 (0.85)

17.84 (1.09)

16.49 (0.81)

-- 143 --

Sr. No.

Components of receipts/Years

2006-07 2007-08 2008-09 2009-10 2010-2011

(Projected)

7

Share from taxes as per recommendations of TPFC

25.00 (2.16)

28.75 (2.00)

0.00 (0.00)

0.00 (0.00)

0.00 (0.00)

8

Total Revenue (4+5+6) (excluding grants)

1056.67 (91.10)

1150.44 (80.04)

1269.37 (63.29)

1379.89 (84.16)

1639.96 (81.04)

9 Grants:

a)

Recommendations of 12th & 13th Finance Commission

51.30 (4.42)

34.20 (2.38)

51.47 (2.57)

17.10 (1.04)

75.60 (3.74)

b)

From centrally sponsored and state plan schemes

43.82 (3.78)

243.73 (16.96)

671.67 (33.49)

233.37 (14.23)

298.15 (14.73)

c) Others (MPLAD + united funds etc.)

8.14 (0.70)

8.98 (0.62)

13.09 (0.65)

9.25 (0.57)

9.86 (0.49)

Total Grants (a+b+c)

103.26 (8.90)

286.91 (19.96)

736.23 (36.71)

259.72 (15.84)

383.61 (18.96)

10 Total Revenue (8+9)

1159.93 (100.00)

1437.35 (100.00)

2005.60 (100.00)

1639.61 (100.00)

2023.57 (100.00)

Source: Office of the DLG and The Report of the Fourth Punjab Finance Commission

Data in Table-16 is indicative of sluggish growth of tax and

non tax revenue. The grants are erratic. Transfers are not in conformity with the recommendations of the TPFC. Similarly the grants of Central Finance Commissions are low than the allocations. Budgetary provisions from other sources are also negligible. There is even lapse of the share in taxes for 3 years and excise duty for one year. The grants to ULBs from Central Finance Commission and from centrally sponsored and state plan schemes are erratic and dependent on the mercy of the state government. This is detrimental to fiscal health of ULBs. The share from taxes as per the recommendations of the Third Punjab Finance Commissions, have not been devolved in toto. The arrears have accumulated over a period of time.

-- 144 --

Table-17 Major items of own revenue of Urban Local Bodies 2006-07 to 2010-11

(Rs. in Crores)

Sr. No.

Item/years 2006-07 2007-08 2008-09 2009-10 2010-11

(Projected)

1. Punjab Municipal Fund (10% of VAT)

472.17 (49.93)

568.06 (54.65)

638.42 (50.98)

700.32 (53.97)

797.28 (54.28)

2. Octroi on Petrol, Diesel and Electricity

83.85 (8.87)

87.32 (8.40)

128.90 (10.29)

138.50 (10.68)

164.60 (11.21)

3. House Tax (Tax on Land & Buildings)

89.02 (9.41)

130.40 (12.54)

133.55 (10.66)

142.82 (11.01)

167.75 (11.42)

4. Water Supply & Sewerage charges

73.14 (7.73)

92.89 (8.94)

85.18 (6.80)

85.03 (6.55)

90.37 (6.15)

5.

Development Charges (including External Development fee/charges)

63.12 (6.68)

21.76 (2.09)

25.54 (2.04)

38.05 (2.93)

38.15 (2.60)

Total 781.30 (82.62)

900.43 (86.62)

1011.59 (80.77)

1104.72 (85.14)

1258.15 (85.66)

Source: Office of the DLG and The Report of the Fourth Punjab Finance Commission

Table-17 shows that only five items constitute major sources of own revenue. Other items of own revenue constitute only about 15% during last two years. VAT is contributing maximum in own revenues followed by the house tax; octroi on petrol, diesel, and electricity; water supply and sewerage charges and the last but not least development charges.

Table-18

Growth rate of various components of own revenue of ULBs

Sr. No.

Percentage increase/decrease over the previous year

Components receipts/year 2006-07 2007-08 2008-09 2009-10 2010-11

(Projected)

1. Punjab Municipal Fund (VAT) 3.48 20.31 12.39 9.70 13.48

2. Octroi on Petrol, Diesel and Electricity

3.48 4.14 47.62 7.45 18.84

3. House Tax (Tax on Land & Buildings)

10.06 46.48 2.42 6.94 17.46

4. Other taxes -21.15 52.10 -3.99 5.44 21.08

5. Total Tax Revenue 3.87 22.24 14.33 8.91 15.16

6. Non-Tax Revenue 23.11 -16.29 12.36 7.04 4.90

7. Capital Receipts -76.14 -33.95 460.34 -62.96 22.75

8. Overall Growth Rate Excluding Capital Receipts

8.82 11.03 13.89 8.51 12.97

9. Overall Growth Rate 0.07 9.93 20.48 3.61 13.21 Source: Office of the DLG and The Report of the Fourth Punjab Finance Commission

-- 145 --

The decline in the growth rate of VAT after 2008-09 is a bad signal for ULBs. The same is the fate of Octroi on petrol etc. While total tax revenue is growing but its growth rate is highly erratic varying from a high of 22.24% in 2007-08 to a low of 3.87% in2006-07. Growth rates of non tax revenue and capital receipts are uncertain and so is the overall growth rate of various components of own revenue.

Table-19

Breakup of Tax revenue of Urban Local Bodies (2006-07 to 2010-11)

Sr. No.

Year

Punjab Municipal Fund(VAT)

House Tax (Tax on Land & Buildings)

Octroi on Petrol, Diesel and Electricity

Other taxes Total Tax Revenue

Amount (Rs. in Crore)

%age of total tax revenue

Amount (Rs. in

Crores)

%age of total tax revenue

Amount (Rs. in

Crores)

%age of total tax revenue

Amount (Rs. in

Crores)

%age of total tax revenue

(Rs. in Crores)

1. 2006-07 472.17 72.19 89.02 13.61 83.85 12.82 9.06 1.38 654.10

2. 2007-08 568.06 71.05 130.40 16.31 87.32 10.92 13.78 1.72 799.56

3. 2008-09 638.42 69.84 133.55 14.61 128.90 14.10 13.23 1.45 914.10

4. 2009-10 700.32 70.34 142.82 14.35 138.50 13.91 13.95 1.40 995.59

5. 2010-11 797.28 69.54 167.75 14.63 164.60 14.36 16.89 1.47 1146.52 Source: Office of the DLG and The Report of the Fourth Punjab Finance Commission

The VAT continues to constitute about 70% of total tax

revenue followed by house tax and octroi on petrol etc.

Table-20

Breakup of non tax revenue of ULBs (Rs. in crores)

Sr. No.

Item/years 2006-07 2007-08 2008-09 2009-10 2010-11

(Projected)

1. Water & sewerage charges

73.14 92.89 85.18 85.03 90.37

2. Capital receipts 23.21 15.33 85.90 31.82 39.06

3. Development/External Development fees/charges

63.12 21.76 25.54 38.05 38.15

4. Building application fee 51.87 42.10 53.53 57.60 60.66

5. Other non-tax revenue 80.17 67.85 88.10 89.43 94.16

6. Total non-tax revenue 291.51 239.93 338.25 301.93 322.40

Source: Office of the DLG and The Report of the Fourth Punjab Finance Commission

The non tax revenue from water supply and sewerage

charges decreased from Rs 100.77 crore in 2005-06 to Rs 73.14 crore in 2006-07, thanks to the exemptions given by the state government. Nevertheless, it has affected the fiscal health of ULBs.

-- 146 --

Table-21 Per capita tax, non-tax and own revenue of ULBs

Sr. No.

Description/Years 2006-07 2010-11 (Projected)

Percentage increase in 2010-11 over

2006-07

1. Per capita tax revenue 676.78 1046.45 54.62

2. Per capita non-tax revenue 277.60 258.61 -6.84

3. Per capita own revenue excluding capital receipts

954.38 1305.06 36.74

4. Per capita own revenue including capital receipts

978.40 1340.71 37.03

Source: Office of the DLG and The Report of the Fourth Punjab Finance Commission

Per capita tax revenue seems to grow but non tax revenue

has decreased during 2006-07 to 2010-11 which shows distress signals. The non tax revenue is poor due to poor pricing and cost recovery from water supply and sewerage. The percentage of income to total expenditure on O&M of water supply and sewerage is not improving. It is rather decreasing continuously after 2007-08 (Table-22).

Table-22

Income and expenditure on operation & maintenance of water supply and sewerage (Rs in crores)

Sr. No.

Year

Expenditure on O & M

Total expenditure On O & M

Total income of water supply & sewerage

%age of income to

total expenditure On O & M

Wages/ Salaries

Other expenditure

1. 2006-07 64.48 119.02 183.50 73.14 39.86

2. 2007-08 74.57 121.13 195.70 92.89 47.47

3. 2008-09 83.72 122.13 205.85 85.18 41.38

4. 2009-10 93.46 138.95 232.41 85.03 36.59

5. 2010-11 105.78 158.22 264.00 90.37 34.23

Total 422.01 659.45 1081.46 426.61 39.45

Source: Office of the DLG and The Report of the Fourth Punjab Finance Commission

The grants released by the Central Government and State

Government for urban development and infrastructure (Table-23) have been erratic and inadequate to meet the growing specific needs of urban local bodies.

-- 147 --

Table-23 Grants released by the Government of India & State Government to Urban Local Bodies for urban development and infrastructure

(Rs in Crore) Sr.n

o. Name of scheme 2006-07 2007-08 2008-09 2009-10

Centre Share

State Share

Total Centre Share

State Share

Total Centre Share

State Share Total Centre Share

State Share

Total

1 2 3 4 5 6 7 8 9 10 11 12 13 14

1 Gahara Project at Amritsar 9.60 9.60 39.15 39.15 3.35 3.35

2 Municipal Development Fund

110.00 110.00 392.32 392.32 3.12 3.12

3 Provision of Rail Bridge (ACA)

20.00 20.00

4

Urban Renewal Programme repayment of LIC loan(taken for w/s + sew. projects in ULBs)

2.93 2.93 2.77 2.77 2.62 2.62 2.45 2.45

5 Swarna Jayanti Shahari Rozgar Yojana (SJSRY)

0.13 0.36 0.49 0.49 0.49 0.27 0.27

6 National Urban Information System(70:30) (JNNURM)

0.46 0.46 0.03 0.03 0.18 0.18

7 Urban Infrastructure and Governance (50:20:30) (UIG)

28.19 11.27 39.46 71.63 16.58 88.21 52.37 31.92 84.29

8 Accelerated Water Supply Programmes (50:50)

1.11 1.11 1.12 0.01 1.13

9 Laying of main sewer line to check contamination of water in Phagwara town

3.00 3.00 2.00 2.00

10 Integrated Development of 2.12 1.69 3.81 0.24 0.16 0.40 0.21 0.21

-- 148 --

Sr.no.

Name of scheme 2006-07 2007-08 2008-09 2009-10

Centre Share

State Share

Total Centre Share

State Share

Total Centre Share

State Share Total Centre Share

State Share

Total

small and medium town JNNURM (60:40)

11 JNNURM (50:20:30) Basic Services to Urban Poor(BSUP)

9.04 3.62 12.66 8.32 3.33 11.65

12

JNNURM (80:10:10) Urban Infrastructure Development Scheme for Small & Medium Town (UIDSSMT)

75.87 9.48 85.35 83.67 10.30 93.97

13

JNNURM (20:10:10) Integrated Housing and Slum Development programme (IHSDP)

12.77 1.60 14.37 3.54 3.54

14 Prevention of Pollution of river Satluj (cost of land 100% CS)

15.35 10.00 25.35 37.30 10.00 47.30 7.00 1.48 8.48 15.35

15 Amritsar Sewerage Project funded by JBIC(for land acquisition)

4.00 4.00

16

Extension and augmentation of water supply in Bathinda & Mansa District(PIDB and Housing Urban Development funded

25.00 25.00 25.00 25.00

-- 149 --

Sr.no.

Name of scheme 2006-07 2007-08 2008-09 2009-10

Centre Share

State Share

Total Centre Share

State Share

Total Centre Share

State Share Total Centre Share

State Share

Total

scheme)(50:50)

17

Extension and augmentation of Water supply and sewerage scheme at Moga (PIDB funded scheme)

1.00 1.00 1.00 1.00

18 Development work at Moga(PIDB funded scheme)

1.00 1.00

19 Water supply and sewerage Scheme at Sultanpur Lodhi (PIDB funded scheme)

1.00 1.00

20 Water supply and sewerage scheme at Patti(PIDB funded scheme)

1.00 1.00

21

Water supply and sewerage scheme at Nangal & Ropar towns (PIDB funded scheme)

2.00 2.00

22

Extension & augmentation of water supply and sewerage scheme at Gidderbaha (PIDB funded scheme)

15.00 15.00

23 Training to elected women representatives in the ULBs

0.07 0.07

Total 27.27 16.55 43.82 106.00 137.73 243.73 196.31 475.36 671.67 151.25 82.12 233.37

Source: Office of the DLG and The Report of the Fourth Punjab Finance Commission

-- 150 --

It seems that own sources of ULBs were comparatively better than grants and shared taxes but they were negligible to meet the growing needs of urban infrastructure as highlighted by the state finance commissions. Trend in income revealed that tax revenue had performed better than non tax revenue. Fiscal transfers and grants were erratic. The fiscal trends during the referred period also indicate excessive state control over local revenues/ resources. The Local Authorities Loan Act, 1914, a central legislation, inhibited borrowing powers of the ULBs, as municipal acts in force in Punjab followed the same. These issues have not been properly addressed even after about 20 years of CAA.

Outstanding debt and other liabilities: The outstanding debt and liabilities have grown little since the beginning of the FPFC as ULBs have not been raising funds from capital market. Loans are mainly from HUDCO, LIC and some nationalized banks. Except Ludhiana no municipality ever raised funds by issuing municipal bonds. The liabilities of the ULBs on pension funds and DA etc are growing due to increasing staff strength. Table-24 shows outstanding debt and liabilities of ULBs.

Table-24 Outstanding debt and other liabilities of Urban Local Bodies

Sr. No.

Item Outstanding Amount at the end of the year

2006-07 2007-08 2008-09 2009-10 2010-11

(Projected)

A. Loans/Interest

1. Financial Institutions (HUDCO,LIC,BANKS)

27.70 27.49 23.55 26.15 29.80

2. Government loans 2.13 2.07 2.02 1.99 1.94

3. Other loans 12.37 15.37 26.09 26.67 17.77

4. Total-A 42.20 44.93 51.66 54.81 49.51

B. Other Liabilities

5. Street light/tube well bills 4.90 4.28 5.03 2.83 3.88

6. Pension fund contribution 9.93 10.54 10.15 14.70 13.69

7. G.P. fund due of employees 10.40 9.12 9.65 11.76 14.25

8. Contractor payments 25.51 35.49 11.90 20.16 11.97

9. Others (Arrears of DA, MDF, Canal Water etc)

14.64 18.31 18.45 21.68 44.55

10. Total-B 65.38 77.74 55.18 71.13 88.34

11. Total-(A+B) 107.58 122.67 106.84 125.94 137.85

Source: Office of the DLG and The Report of the Fourth Punjab Finance Commission

-- 151 --

Expenditure of ULBs: The expenditure pattern of ULBs continues to defy the normative patterns and state government has not adopted any corrective measures despite recommendations of the first, second and third state finance commissions. The expenditure on general administration continues to be higher than the norms and still growing. The expenditure on tax collection also shows almost similar trend and growing in absolute terms. Table-25 provides an overview of total expenditure of ULBs.

Table-25

Total expenditure of Urban Local Bodies from 2006-07 to 2010-11

(Rs. in crore)

Sr. No.

Item/Years 2006-07 2007-08 2008-09 2009-10 2010-11

%age increase in

2010-11 over 2006-07

1. General administration

51.31 (4.06)

62.41 (4.85)

68.62 (4.34)

74.55 (4.17)

85.34 (4.19)

66.32

2. Tax collection 46.32 (3.66)

46.88 (3.64)

49.35 (3.12)

56.06 (3.14)

59.84 (2.94)

29.19

3. Provision of services

995.41 (78.78)

1021.76 (79.37)

1285.98 (81.29)

1473.80 (82.50)

1697.68 (83.41)

70.55

4. Development of slum areas

67.25 (5.32)

62.81 (4.88)

79.28 (5.01)

78.42 (4.39)

83.27 (4.09)

23.82

5. Debt servicing a)Interest

6.52 (0.52)

4.87 (0.38)

5.42 (0.34)

4.01 (0.22)

5.21 (0.26)

(-)20.09

b)Repayment of principal

27.74 (2.20)

19.89 (1.54)

23.95 (1.52)

22.18 (1.24)

23.44 (1.15)

(-)15.50

Total 5 ( a + b) 34.26 24.76 29.37 26.19 28.65 (-)16.37

6. Miscellaneous 69.05 (5.46)

68.71 (5.34)

69.33 (4.38)

77.45 (4.34)

80.58 (3.96)

16.70

7. Grand Total 1263.60 (100.00)

1287.33 (100.00)

1581.93 (100.00)

1786.47 (100.00)

2035.36 (100.00)

61.08

8. %age increase over the previous year

29.91 1.88 22.88 12.93 13.93

Source: Office of the DLG and The Report of the Fourth Punjab Finance Commission

The expenditure on provision of services is growing slowly

but not as per the projections made by the TPFC. This is resulting in deficiencies in the urban infrastructure and services. In the provision of services the expenditure on salaries and O&M is much higher than the income from respective services and hence less money is available for actual development works. Table-26

-- 152 --

gives the detailed break-up of total expenditure of ULBs from 2006-07 to 2010-11.

Table-26 Detailed breakup of expenditure of ULBs from 2006-07 to 2010-11

( Rs. in crore)

Sr. no.

Item Expenditure for the year

2006-07 2007-08 2008-09 2009-10 2010-11

(projected)

0 1 2 3 4 5 6

A General administration

1 Salaries & wages 38.87 49.98 54.29 62.17 72.89

2 Other expenditure (contingency)

12.44 12.43 14.33 12.38 12.45

Total A (1+2) 51.31 62.41 68.62 74.55 85.34

B Expenditure on tax collection

1 Salaries & wages 45.06 45.73 47.83 54.63 58.33

2 Other expenditure (contingency)

1.26 1.15 1.52 1.43 1.51

Total B (1+2) 46.32 46.88 49.35 56.06 59.84

C Provision of services

a Water supply and sewerage

1 Salaries & wages 64.48 74.57 83.72 93.46 105.78

2 Capital expenditure 106.00 106.68 127.00 271.16 391.56

3 O&M 101.34 105.56 107.90 123.57 140.70

4 Other expenditure (contingency)

17.68 15.57 14.23 15.38 17.52

Total a (1+2+3+4) 289.50 302.38 332.85 503.57 655.56

b Sanitation

1 Salaries & wages 172.15 196.72 209.02 237.69 264.86

2 Capital expenditure 2.15 2.50 2.56 2.36 2.46

3 O&M 13.33 15.48 19.79 21.83 24.50

4 Other expenditure (contingency)

10.55 9.82 11.56 11.66 13.09

Total b (1+2+3+4) 198.18 224.52 242.93 273.54 304.91

c Roads & bridges including streets and drainage / works

1 Salaries & wages 38.59 44.75 48.81 57.72 66.04

2 Capital expenditure 164.82 156.92 247.42 243.76 285.52

3 O&M 115.97 86.29 89.29 104.71 96.68

4 Other expenditure (contingency)

10.03 8.62 11.49 13.38 12.36

Total c (1+2+3+4) 329.41 296.58 397.01 419.57 460.60

-- 153 --

Sr. no.

Item

Expenditure for the year

2006-07 2007-08 2008-09 2009-10 2010-11

(projected)

0 1 2 3 4 5 6

d Street lighting

1 Salaries & wages 5.39 5.92 6.35 8.09 9.29

2 Capital expenditure 22.98 17.01 30.36 23.99 26.57

3 O&M 41.25 44.30 47.16 55.46 59.92

4 Other expenditure (contingency)

9.60 7.95 7.90 8.42 9.10

Total d (1+2+3+4) 79.22 75.18 91.77 95.96 104.82

e Fire services

1 Salaries & wages 12.19 14.95 15.71 18.00 20.54

2 Capital expenditure 0.06 0.31 0.56 0.26 0.30

3 O&M 0.65 0.70 0.75 0.61 0.76

4 Other expenditure (contingency)

0.59 0.70 0.75 0.61 0.76

Total e (1+2+3+4) 13.49 16.62 17.64 20.47 23.58

f Other services

1 Salaries & wages 34.74 37.05 36.90 38.53 39.90

2 Capital expenditure 15.78 37.84 123.00 81.33 64.49

3 O&M 26.57 24.72 36.84 31.43 33.74

4 Other expenditure (contingency)

8.52 6.87 7.04 9.40 10.09

Total f (1+2+3+4) 85.61 106.48 203.78 160.69 148.21

Grand total (a+b+c+d+e+f)

995.41 1021.76 1285.98 1473.80 1697.68

D Development of slum areas

1 Capital expenditure 31.03 29.06 43.64 37.77 40.11

2 Other expenditure 36.22 33.75 35.64 40.65 43.16

Total D (1+2) 67.25 62.81 79.28 78.42 83.27

E

Other capital expenditure (construction of bus stand, parks, community centre and buildings)

46.34 41.73 45.39 47.84 49.77

F Other current/ miscellaneous expenditure

22.71 26.98 23.94 29.61 30.81

G Repayment of loans

1 Principal 27.74 19.89 23.95 22.48 23.44

2 Interest 6.52 4.87 5.42 4.01 5.21

Total G (1+2) 34.26 24.76 29.37 26.19 28.65

Grand total (A to G) 1263.60 1287.33 1581.93 1786.47 2035.36 Source: Office of the DLG and The Report of the Fourth Punjab Finance Commission

-- 154 --

Table-27 Proposed expenditure on water supply, sewerage system, STP,

storm water and solid waste management by Third Punjab Finance Commission and actual expenditure incurred during the years

2006-07 to 2010-11 in urban areas (Rs. in Crores)

Sr. no

Item/ Years 2006-07 2007-08 2008-09 2009-10 2010-11 Total

(2006-07 to 2010-11)

1

Proposed expenditure on water supply and sewerage system

380.00 259.00 144.00 150.00 158.00 1091.00

Actual expenditure incurred

106.00 106.68 127.00 271.16 391.56

(projected) 1002.40

2 Proposed expenditure on STP

- 105.00 110.00 116.00 122.00 453.00

Actual expenditure Incurred - - 1.02 33.89

27.37 (up to

11/2010) 62.28

3

Proposed expenditure. on storm water drainage

- 74.00 77.00 81.00 85.00 317.00

Actual expenditure Incurred

1.58 0.20 3.38 3.67 1.57 10.40

4

Proposed expenditure on solid waste management

- 105.00 110.00 81.00 85.00 381.00

Actual expenditure Incurred

4.50 7.17 7.64 8.39 10.51

(projected) 38.21

5

Total proposed exp. on above schemes

380.00 543.00 441.00 428.00 450.00 2242.00

6 Total expenditure Actually incurred

110.50 113.85 135.66 313.44 429.44 1102.89

7 Difference (5-6) 269.50 429.15 305.34 114.56 20.56 1139.11

8

% of actual expenditure to proposed expenditure

29.08 20.97 30.76 73.23 95.43 49.19

Source: Office of the DLG and the Report of the Fourth Punjab Finance Commission

There has been a huge difference between actual

expenditure and expenditure projected by the Third Punjab

-- 155 --

Finance Commission on water supply, sewerage system, STP, storm water and solid waste management for the years 2006-07 to 2010-11 in urban areas. The state government has failed to fulfil its promise of devolutions in share of taxes, including the share of VAT in lieu of abolition of Octroi. The exemptions given on property tax and user charges have further weakened the fiscal capacity of the ULBs. Strict measures are required to mobilize the resources needed to meet the gaps in infrastructure and services.

Section V: Municipal Finances during 2010-11 to 2015-16

Projections of Income and Expenditure of Urban Local Bodies: The Department of Local Self Government, Punjab has projected the income and expenditure of ULBs from 2010-11 to 2015-16 for the 4th PFC. The information on the same has been reproduced below:

-- 156 --

Table-28 Projected revenue of Urban Local Bodies from 2010-11 to 2015-16

(Rs. in Crores) Sr. no Item Receipts

2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 Total 2011-12 to 2015-

16)

0 1 2 3 4 5 6 7 8

A Tax revenue 1146.52 1320.33 1520.50 1751.00 2016.46 2322.15 8930.44

B Non- tax revenue

1 Water supply charges 66.39 70.26 74.35 78.69 83.28 88.13 394.71

2 Sewerage charges 23.98 25.78 27.73 29.81 32.06 34.47 149.85

3 Development / external development fee/ charges

38.15 38.26 38.36 38.46 38.57 38.67 192.32

4

Other fees (other non-tax excluding water supply, sewerage and development charges)

154.82 163.03 171.67 180.77 190.35 200.44 906.26

Total B- non-tax revenue (1to 4)

283.34 297.33 312.11 327.73 344.26 361.71 1643.14

C Sale of capital assets 39.06 39.06 39.06 39.06 39.06 39.06 195.30

Total own revenue (A+B+C)

1468.92 1656.72 1871.67 2117.78 2399.78 2722.92 10768.88

D Share of excise duty 154.55 71.25 71.25 71.25 71.25 71.25 356.25

-- 157 --

Sr. no Item Receipts

2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 Total 2011-12 to 2015-

16)

and auction money in lieu of octroi on liquor

E Borrowings/ loans 16.49 16.49 16.49 16.49 16.49 16.49 82.45

F Share from taxes as per recommendations on 4th PFC

Likely revenue has been given in Table-11.13 (chapter-xi)

Total revenue (A+B+C+D+E+F) (excluding grants)

1639.96 1744.46 1959.41 2265.53 2487.52 2810.66 11297.58

G Grants

1 Recommendations of 13th Finance Commission

75.60* 91.03 133.68 158.11 186.91 186.91 756.64

2 From centrally sponsored and state plan schemes

298.15 298.15 298.15 298.15 298.15 298.15 1490.75

Other (MPLAD+ Untied funds)

9.86 9.86 9.86 9.86 9.86 9.86 49.30

Total G-Grants 383.61 399.04 441.69 466.12 494.92 494.92 2296.69

Total Revenue (A+B+C+D+E+F+G)

2023.57 2143.50 2401.10 2671.65 2982.44 3305.58 13504.22

Source: Office of the DLG and The Report of the Fourth Punjab Finance Commission * It includes Rs. 17.10 crores grant of 12th Finance Commission

-- 158 --

Table-29 Percentage coverage of identified civic services in urban areas

Sr. no.

Item Proposed by TPFC upto 2010-11

Actual coverage likely by 2010-11

Proposed by 4th PFC upto 2016-17

1 Water supply 100% 86% 100%

2 Sewerage and STP

(i) sewerage -80% (ii) STP- 77%

(i) 60% (ii) 40%

100% 100%

3 Storm water drainage

(i) Municipal Corporations

(ii) Municipal Councils

15% 0 to 5%

60%

4 Solid waste management

100% 15% 100%

Source: Office of the DLG and The Report of the Fourth Punjab Finance Commission

Table-30

Projected expenditure of Urban Local Bodies on major items from 2010-11 to 2015-16

(Rs. In crores)

Sr. no.

Item/ Years 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 Total

1 General administration

85.34 97.96 112.77 130.10 150.42 174.23 665.48

2 Tax collection 59.84 63.88 68.19 72.78 77.70 82.94 365.49

3 Provisions of services

A Water supply, sewerage and STP

I) Capital

expenditure on water supply

391.56

141.68 113.35 113.35 113.35 113.35 595.08

ii) Capital

expenditure on sewerage system and STP

758.25 606.60 606.60 606.60 606.60 31.84.65

iii) Expenditure On O&M of water supply, sewerage and STP

264.00 320.00 410.00 498.00 594.00 706.00 2528.00

B Storm water drainage

i) Capital

expenditure on

storm water drainage

- 100.00 100.00 100.00 100.00 100.00 500.00

ii) Expenditure on O&M of storm water drainage

- - 2.00 4.30 6.93 9.92 23.15

C Solid waste management

-- 159 --

Sr. no.

Item/ Years 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 Total

i) Capital

expenditure on solid waste management

- 100.00 100.00 100.00 100.00 100.00 500.00

ii) Expenditure on O&M of solid waste management

- - - - - - -

D Sanitation

i) Capital

expenditure on sanitation

2.46 2.57 2.68 2.80 2.92 3.05 14.02

ii) Expenditure on O&M of sanitation

302045 337.31 376.20 419.58 467.96 521.93 2122.98

E Roads and bridges

i) Capital

expenditure on

roads and bridges

285.52 334.42 391.71 458.81 537.41 629.41 2351.76

ii) Expenditure on O&M of roads and bridges

175.08 185.51 196.40 208.87 223.14 239.46 1053.38

F Street lighting

i) Capital

expenditure on street lighting

26.51 29.30 32.38 35.78 39.54 43.70 180.70

ii) Expenditure on

O&M of street lighting

78.31 85.23 92.81 101.11 110.18 120.14 509.47

G Fire services

i) Capital

expenditure on fire services

0.30 0.30 0.30 0.30 0.30 0.30 1.50

ii) Expenditure on O&M of fire services

23.28 26.82 30.94 35.72 41.27 47.72 182.47

H Other services

i) Capital

expenditure. 64.49 64.49 64.49 64.49 64.49 64.49 322.45

ii Expenditure on

O&M 83.72 88.35 93.27 98.50 104.40 109.95 494.11

4 Development of slum areas

83.27 88.41 93.88 99.68 105.84 112.38 500.19

5 Debt servicing

a) Interest 5.21 5.21 5.21 5.21 5.21 5.21 26.05

b) Repayment of principal

23.44 23.44 23.44 23.44 23.44 23.44 117.20

-- 160 --

Sr. no.

Item/ Years 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 Total

6 Miscellaneous (other exp.)

80.58 83.83 87.22 90.74 94.41 98.23 454.43

7 Total expenditure 2035.36 2936.96 3003.84 3270.16 3569.15 3912.45 16692.56

Source: Office of the DLG and The Report of the Fourth Punjab Finance Commission

There is huge gap in projected income and expenditure and it seems to widen in coming years. There is need of additional resource mobilization to meet the gaps. The measures needed to meet the resource gaps have been suggested in the last chapter.

To sum up, the main features of the state of municipal finances in Punjab are as follows:

Poor intergovernmental fiscal relations: The state of municipal finances in the state of Punjab is far from satisfactory due to poor intergovernmental fiscal relations between the state government and local governments, poor tax rates, absence of buoyancy in local taxes/ user charges and lack of transparency in local financial management.

State Government control over local affairs: The State Government controls fiscal powers regarding fixing the rates, declaring exemptions and budgetary transfers and devolutions to ULBs recommended by the statutory body of state finance commission.

Lack of autonomy of ULBs: No ULB can impose new taxes, fees, levies and grant exemption without the approval of the Government. All the resolutions of the ULBs require approval of the State Government.

Lack of buoyancy in property tax and user charges: Revenue income from tax and non-tax revenue sources has not been growing due to lack of buoyancy in property tax and water and sewerage charges and small size of capital grants.

Political populism: The state government has continuously been encroaching municipal fiscal domain. The revised water and sewerage charges were „held in abeyance‟ just before the Parliamentary elections in 2003. Subsequently state government granted exemptions on property tax and

-- 161 --

user charges on five marla houses. The freebies by the state government in terms of property tax and user charges exemptions and earlier abolition of Octroi have affected fiscal health of the ULBs.

Disproportionately high expenditure on staff (establishment): On expenditure side there seems to be disproportionately high expenditure of ULBs on staff (establishment). The excessively provincialised services and caderisation with fixed strength as determined by the Government does not leave initiative for municipalities to reduce their expenditure on establishment. The expenditure on general administration continues to be higher than the norms and still growing.

Poor devolutions of share of taxes: The recommendations of the SFCs not implemented in toto. The devolutions are not taking place as per the recommendations of the state finance commissions. The budgetary transfers have also been nominal.

Inadequate compensation in lieu of abolition of Octroi: The share of VAT (10%) in lieu of abolition of Octroi has not been devolved in full. It seems that share of VAT has failed to fully replace Octroi, the most buoyant source of own revenue of ULBs.

Poor base and assessment of Property Tax: Property Tax assessment continues to be based on ARV and hence the base and rate of PT is poor. The exemptions/ non implementation of area linked assessment affecting revenue from this source.

Nominal user charges: User charges from water supply and sewerage charges continue to be low and O&M recovery is even declining due to exemptions. The percentage of income to total expenditure on O&M of water supply and sewerage is not improving. It is rather decreasing continuously after 2007-08. The state government has rather given exemption to the consumers in various categories such as households having size of less than 5 marla were exempted from paying water supply and sewerage charges in 2006. With this decision the O&M recovery of water supply and sewerage suddenly reduced

-- 162 --

from about 60% to 36.60%. There is non-volumetric supply of water and no system of charges for solid waste collections.

Lack of transfer of devolutions recommended by the central finance commissions: The central finance commission‟s transfers to state exchequer have not been transferred further to ULBs in toto.

Huge gaps in the transfer of central and state grants to ULBs: The grants have been irregular and inadequate. There has been huge gap in the grants allocated by the Government of India and Government of Punjab to the ULBs for urban development and infrastructure.

Inadequate expenditure on provision of services: The expenditure on provision of services is not growing as per the projections by the last finance commissions leaving the huge deficiencies in the same. In the provision of services the expenditure on salaries and O&M is much higher than the income from respective services.

Negligible resource mobilization from capital market: Expenditure on debt servicing is nominal which shows that ULBs are raising negligible funds from the capital market to finance infrastructure and services. The outstanding debt and liabilities have grown since the beginning of the FPFC but still at lower side as ULBs are not habitual of raising funds from capital market. Loans are mainly from HUDCO, LIC and some nationalized banks.

Inadequate borrowing powers of the ULBs: The Local Authorities Loan Act, 1914 a central legislation inhibited borrowing powers of the ULBs as municipal acts in force in Punjab followed the same.

Huge difference between proposed expenditure and actual expenditure: There has been huge difference between proposed expenditure and actual expenditure on water supply, sewerage system, STP, storm water and solid waste management etc as projected by the Punjab Finance Commissions and it seems to be widening with growing expenditure.

-- 163 --

Financial Constants of ULBs a Glance

Lack of financial autonomy on account of state control over them and their dependency on centre and state grants.

Poor fiscal transfers from the Centre and the State.

Inadequate devolution of the committed shave of taxes, from the state, including the committed compensation in lieu of octroi.

Poor resource mobilisation by the ULBs by means of property tax, user charges and raising funds from capital market under the constants of populist politics.

Yawning gap between the proposed and actual expenditure in spite of the recommendation of the State Finance Commissions against it.

Disproportionately huge expenditure on staff compared to that on capital investment (infrastructure) and public services.

General neglect of the recommendations of the Central and State Finance Commission in regard to provision and management of municipal finances.

-- 164 --

VII

TOWARDS REFORMS

In view of the preceding account of the dismal state of urban affairs in Punjab, the need for rethink and necessary reforms in the existing framework of urban planning and development as well as urban governance cannot be over-emphasised. There may be identified five domains of urban development, i.e., policy, planning, legislation, finance and governance. All of them are in need of urgent reforms for which some important inputs are offered here. Policy Inputs

It is surprising but true that the state does not have a policy of urban development as yet. The significance and urgency of a state policy can be gauged from the fact that according to various authentic projections, including that of McKinsey Global Institute Report (2010), more than 50 percent (52% to be exact) of Punjab is likely to be urbanized by 2030. Given the current level of urbanization in Punjab at 37.49 percent (provisional figure, Census India 2011), the projected level of 50-52 percent seems to be quite realistic. More importantly, the present urban profile of Punjab is getting distorted by some emerging regional and other kinds of disparities, as noted earlier. To cap it all, the state also falls short of the basic standards on almost all the key indicators of urban development, including infrastructure, services, housing, environment and quality of life, especially of the urban poor. All these reasons warrant the need for an early formulation of the policy. An important requirement for a sound state policy is the solid database. The existing state of database is problematic, as the data is not only inadequate but also unreliable. The following observation made by National Urban Observatory says it all: “Urban data is scanty and scattered and it is generally aggregated

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at district and state level; the available information is neither reliable nor upto date” (Town and Country Planning Organization, 2002). At the level of local bodies, the situation is even more clumsy which can be gathered from the following remark of the Japan Bank of International Cooperation Team: “It (data) is all in the heads of concerned officials rather than on the files” (JBIC Report 2006). What is more, the data about the same item varies from branch to branch. In short, the available data remain unrecorded, unorganised, fragmented, dated and unreliable. There is, therefore, an urgent need for rationalizing and standardizing the database and documentation system.

The data constraints notwithstanding, the state policy of

urban development may aim at:

Urban development without compromising state‟s lead in agricultural development.

Land development for promoting urban centres by evolving model norms of land acquisition, allocation and utilization.

Regionally balanced and dispersed urban development throughout the state.

Integrated urban development focused on the harmonious improvement of the productive potential of urban centres together with quality of urban life and empowerment of urban poor.

Inclusive urban development providing for equal access of the vulnerable groups to all basic services and resources so as to restore to them their “right to the city”.

Affordable housing for all within a specified time frame along with a pursuit of raising slum free urban centres.

Sustainable urban development committed to the cause of conservation of urban environment and augmentation of green cover. For effective realization of the above broad objectives, the

state policy of urban development may have to be complemented with some sector-specific policies such as land development policy, migration management policy, housing and habitat policy,

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slum development policy and heritage preservation policy, among others.

Land development policy may have to address the issues

of land acquisition, allocation and utilization. It may seek to evolve model norms to:

check indiscriminate and unauthorised conversion of agricultural land into non-agricultural along with identifying land for urban development;

avoid/minimize the practice of coercive land acquisition and define terms of reasonable market price to be offered to the landowners along with maintenance of their ownership in part or full in the capacity of coparceners/ shareholders.

promote rational land use planning by matching available land resource and land requirement for urban development;

define terms of rational allocation of land within urban areas in order to avoid the contentious policy of discretionary quotas;

optimize the use of land resource within urban areas by providing for multiple use of the same land/building at different hours;

monitor/review the extent of the use of land allocated to public/private sector and recover the unutilized/surplus land. The policy of migration management may proceed from

the realistic premise that migration cannot be banned nor it can be regulated. It can best be managed by adopting a two-pronged strategy: i) providing city-like amenities and employment opportunities in rural areas; and, ii) rechannelizing its flow from the more developed to the less developed urban centres that have a potential for development. For this purpose a policy of effective incentivization of industrialization or economic development of such centres may be necessary. This will help turn the flow of migration away from the overly developed cities to the

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developing ones and save the former from further deterioration of their infrastructure and services.

The housing and habitat policy may aim at providing

affordable housing to all on ownership or rental basis within a specific time frame. Developed land for housing for the poor in all housing projects of public and private agencies, besides using other measures like provision of appropriate capital or interest subsidies. For this purpose a perspective plan initially for about 10-15 years may be prepared to meet the shortage of housing in urban areas at the state level along with preparing city level plans on the same lines. The housing policy needs to incorporate special concern for urban poor which may manifest itself in terms of adopting suitable measures such as the following: the provision of earmarking 20-25% developed land in all housing projects (both public and private sectors) for urban poor, as proposed under JNNURM; earmarking separate and adequate funds for housing for poor; and using innovative financial instruments like the Mortgage Backed Securitization Market (MBSM) for the purpose, as proposed by some experts.

The slum development policy may accord priority to

prevention of slum formation in the first instance. This can be done by making it obligatory on the industrialists, builders and others to provide reasonable accommodation well connected with basic services to their workers. Alternatively, they may be made to pay to the government for proving these basics to their workers. The slum development policy may further address the issue of regularization of existing slums by transforming them into clean liveable localities and providing them with necessary civic amenities. Relocation of slums, if necessary, may ensure efficient transport connectivity of the new site with the workplace of the residents or prospects of alternative employment avenues for them near the new site which should be a serviced site.

The need for heritage preservation policy needs no

reiteration in view of the enormity and speciality of heritage sites all over Punjab. The heritage policy may have a concern not just for the protection of such sites but also for developing them, for

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they constitute visible identity marks of the city. This will not only help preserve our cultural symbols but also promote tourism as a source of revenue for the state. Besides preserving the old historical monuments, the new constructions may be raised with an eye to making them a heritage site for the future.

Planning Inputs

Reform inputs in the domain of urban planning may address the issues of deficiencies and distortions in urban development, on the one hand, and devising suitable strategies of balanced urban development, on the other. Here are some inputs for defining planning priorities and devising suitable planning strategies.

Accord priority in urban planning to the development of:

northern and southern parts of Punjab in order to have balanced regional development;

parallel transport and growth corridors in northern and southern zones;

backward regions, including sub-mountain and border regions;

area-specific viable growth centres in various regions;

medium and small towns, especially those having promising growth potential;

compact medium-density cities, as these may be the best bet, according to Bernd Scholl (Times of India, 20th September 2010);

Mandi towns and heritage-based cities and towns. Coming to planning agencies, mechanisms and strategies,

the following inputs may be useful:

The Town and Country Planning Department may prepare a concept plan with long term perspective for urban development in the state. This plan may provide a blueprint of overall future portfolio of urban centres in the state; dispersed spread of urban population; balanced

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regional urban development with priority to backward and neglected regions; creation of parallel transport and economic growth corridors in other regions; location of sites for new urban centres and their planning and development; and identification of future growth centres (manufacturing, trading, financial, specialist, etc.) from amongst the existing ones.

The case of building parallel corridors is strongly recommended by Jit Kumar Gupta, a senior town planner. He observes: “Highly developed central corridor along G.T. road should be declared as restricted investment zone and Northern and Southern zones of the state should be declared as priority area for state and private investment so as to effectively disperse the economic activities and population from the congested areas to backwards regions” (2011:18).

All ULBs may serve as exclusive planning agencies for all local level planning. The ULBs may be quipped with necessary strength of professional staff, including town planners.

The prevailing practice of centralized, expert-led planning may give way to the emerging trend of participatory planning.

The methodology of preparation of master plans merits reconsideration. It has all along been guided by purely technical considerations. It may now be broad-based to take into account the emerging socio-economic sensibilities of inclusive, gender-sensitive and sustainable development.

The planning strategy of horizontal development may yield place to the strategy of vertical development of the city.

Innovative schemes of infrastructure development devised by some other states may be adopted with suitable modifications. A number of articles on this theme are published by Isher Ahluwalia and her associates in the Indian Express which may serve as a ready reckoner for identifying such practices.

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Principle of convergence may inform the planning of basic services.

Legislative Inputs

An enlightened legal framework is necessary for sound urban development. Broadly it comprises four sets of laws, i.e., land acts, planning legislation, municipal laws and fiscal regulations. Given below are some inputs for each component.

There is a need to streamline the existing land legislation, especially the law about forcible acquisition of land, in the light of current developments.

Building bylaws and zoning regulations need to be liberalized for optimum utilization of land, as rightly observed by the former Chief Town Planer J.K. Gupta (2011:21).

Land registration system is also in need of rationalization to effectively check misuse of land as well as to prevent unauthorised conversion of agricultural land into non-agricultural.

The existing planning legislation as well requires a second look in view of the 74th Constitutional Amendment Act. While it is hailed by town planners, it is detested by the municipal councillors. Take, for example, the Punjab Regional and Town Planning and Development Act, 1995. Jit Kumar Gupta commends it as “highly comprehensive and innovative in terms of planning and development framework because it is based on the good features of different models of planning laws applicable in different states” (2011:20). In addition, he contends, it “does take care of the provisions of 74th Constitutional Amendment which calls for decentralization of city planning, development and management functions to the city level authorities, i.e., municipalities” (2011:21). On the other hand, the municipal councillors who attended our consultation meet were highly critical of it on the count that it virtually saps the ULBs of planning autonomy and subjects them to the control of state officials. Whatever the

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merits of the Act under reference, there is a point in the argument of the councillors. For, the Act provides for declaration of local bodies as planning and development agencies in the areas where planning and development authorities are not created. But given the reality that planning and development bodies have already been created in many areas, the Act deprives the local bodies of their right to self planning. In view of this anomaly, there is a need to suitably amend this Act so as to bring in line with the 74th Constitutional Amendment Act, 1992 (CAA).

The existing municipal legislation in Punjab needs to be amended, as it is not in accord with the real spirit of the CAA. It is the Punjab Municipal Act 1911 and Punjab Municipal Corporation Act, 1976, amended in 1994 in conformity with the CAA, that still control the local governance in Punjab. The Punjab Assembly passed the Punjab Municipal Bill, 1999 but President of India did not give its consent as some of the provisions of the Bill were against the provisions of CAA. The Punjab Municipal Bill, 1999 (PMB) thereafter has gone in abeyance. It is time that the Punjab Municipal Bill (PMB) is recast in the light of the provisions of Model Municipal Law 2003(MML) circulated by the Government of India. The following inputs may help recast the PMB.

The PMB may be made into a unified law for all the tiers of local governance, instead of separate acts for Municipal Corporations, Councils and Nagar Panchayats.

It may provide for the Mayor-in-Council (MIC) to empower the existing mayoral system in Punjab, which is weak, ineffective and does not promote participatory governance in real sense. The mayor in the existing system has limited autonomy for discharging functional and fiscal obligations. In Municipal Corporation Act 1976 mayor is not municipal authority; only commissioner, F&C committee and Municipal Corporation are specified as municipal authorities. This undermines the powers and authority of the constitutionally elected mayor and hampers the development of the cities. On the other hand, the MIC system as followed in West Bengal (introduced in

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Calcutta in 1985), provides cabinet form of governance. In this system executive powers of the municipal corporation are exercised by the MIC on a day-to-day basis. In place of Standing Committee, MIC is listed among the municipal authorities. The commissioner is not included therein. The mayor would normally enjoy five-year term and major departments like, health, education, finance, water supply and sanitation, etc., lie with the council. MIC allots duties among the members of the council including the deputy mayor through written orders. Municipal Commissioner is principal executive officer and is not under the supervision and control of the mayor. The Commissioner exercises powers and performs the functions especially conferred upon him/her by or under the act or by any other law. MIC system is in conformity with the 74th Amendment Act and also with the Model Municipal Law, Government of India. The councillors also should have more say in deciding the priorities and performing certain executive functions. MIC promotes greater interface between elected representatives, officials and citizens as well as greater systemic accountability and transparency. In view of the above advantages, it is proposed that MIC system may first be adopted at Municipal Corporation level and then extended to all the municipalities in state where it may be termed as President-in-Council.

The jurisdiction of the Empowered Standing Committee may be extended to cover all types of ULBs, including the local body of class „C‟ towns and Nagar Panchayats.

It may provide for mandatory constitution of ward committees for each ward or for a number of contiguous wards to inspire participatory urban planning and local governance.

The PMB may provide for mandatory constitution of Metropolitan Planning Committees (MPCs) in metropolitan towns.

The District Planning Committees constituted in conformity with CAA may be mandated to prepare and implement integrated district development plans on the basis of plans prepared by the ULBs and Panchayati Raj

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Institutions in the state in order to evolve a system of short and long term planning in the state.

The ULBs may have the discretion to accept certain functions assigned to them by the government and other agencies, on payment basis, subject to approval by the Empowered Standing Committee of the municipalities.

State Level Municipal Audit Commission may be set up to fix norms and standards of municipal services and the strength of needed manpower for it.

Provision may be made for appointment of a professional chartered accountant by the state government as Auditor of ULBs.

Preparation of an annual balance sheet of the assets and the liabilities by each ULB may be made mandatory.

A provision may be made to oblige ULBs to prepare an inventory of properties each year in order to enable them to leverage their assets for raising funds from the budgetary resources.

The PMB may provide for a Municipal Fund with separate account dedicated for various municipal services.

Provision of a Municipal Accounts Committee (MAC) similar to Public Accounts Committee (PAC) is necessary for all tiers of ULBs. The members of the Empower Standing Committee may not be put on MAC.

The ULBs may be given autonomy for involving private sector in planning, construction, financing, operation/maintenance of infrastructure and delivery of services, including billing and collection of taxes and user charges, etc.

On the pattern of State Electricity Regulatory Commission, provision for setting up of a State Municipal Regulatory Commission may be made to determine the user charges on the basis of the standard of service so as to ensure interests of the citizens.

The ULBs may be mandated to prepare annual environmental and subsidy reports at the city level as part of the annual budgeting exercise.

In case the state government dissolves an elected body on account of default in performance or abuse of powers,

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some provision may be made in PMB to set up an independent committee to look into the propriety of the dissolution and recommend suitable action in the matter. In the event of malafide dissolution the committee may recommend reinstatement of elected body. Otherwise, elections must be held within six months of dissolution.

Financial Inputs

The following measures may help improve the financial position of ULBs:

Adequate fiscal powers with greater autonomy to the ULBs: Adequate fiscal powers may be given to the ULBs regarding fixing the rates of local taxes and charges, exemptions, tax base and rates. Greater autonomy to ULBs in decision making at local level will help to manage collections of taxes, fees, levies and rationalize exemptions effectively. The borrowing powers of ULBs needs to be enhanced by amending Local Authorities Loans Act of 1914 which has outlived its utility in the present context.

Additional resource mobilization: To fill the gap in projected income and expenditure on water supply, sewerage system, sewage treatment plant, storm water and solid waste management, etc., there is a need for additional resource mobilization by the ULBs, as computed/recommended by the Fourth Punjab Finance Commission.

In-principle devolution of taxes: The devolution of taxes from the state to the ULBs may be in accordance with the recommendations of statutory bodies of State Finance Commissions on the pattern of devolutions to the states by the Central Government based on the recommendations of the Central Finance Commission.

Recovery of user charges on O&M: 100% recovery of O&M of water supply and sewerage is necessary. The volumetric supply of water may be started with metering of all the connections. Differential rates may be charged for differential consumption to cross subsidize the poor. In case of exemptions by the state government, the loss of

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ULBs on this part should be made up by the state. Ludhiana Municipal Corporation was able to raise its income from water supply and sewerage charges through numerous important initiatives such as enhanced vigilance to check leakages, theft, and illegal/multiple connections; improvement in water pressure, and expansion of water and sewerage network; identification of unauthorized connections; zone-wise fixing of targets for collection of user charges; delivery of bills through courier services; computerization of billing and collection; and scheme of incentives and penalties. Other ULBs may improve revenue from user charges by following the same pattern.

Levying charges for solid waste management: Levying charges for solid waste management and making it self-financing can help in reducing the financial burden on the ULBs. The charges to be levied must be linked with the quantum of waste generated with higher changes levied for toxic waste. All development agencies setting up bulk material markets must be asked to pay for the entire campus. The principle of users pay and polluters pay must be followed in levying charges for collection and disposal of solid waste.

Rationalization of expenditure on staff (establishment): The expenditure on staff (establishment) must be brought down by downsizing the cadre strength and deprovincialisation of services.

Increase in compensation in lieu of abolition of Octroi: There is a need to increase the share of VAT (10%) in lieu of abolition of Octroi as it seems to be lower than the expected revenue from Octroi.

Transfer of central and state grants to ULBs: The grants allocated by the central and state government may be transferred in full to the ULBs. Given the widely acclaimed fact that cities are engines of economic growth, the state government will do well to allocate more funds and give more grants for infrastructure development in the cities. Improved productivity due to better infrastructure would help the state to get better returns in terms of higher taxes and fees from the cities.

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Enhancing expenditure on provision of services: The expenditure on provision of services may be in accordance with the projections made by the State Finance Commissions. The projections are made on the basis of assessment of requirements of the ULBs to meet the identified gaps in services. Similarly the expenditure on salaries and O&M may be reduced to make available more funds for provision of services.

Accessing financial resources from national and international capital market and institutional sources: Given ULB‟s prohibitively limited resources, budgetary provisions, share from taxes and grants, etc., which hamstrung them to meet the growing needs of funds for urban infrastructure and services, there is a need to raise funds from national and international capital market. ULBs may raise more loans from specialized financial institutions like HUDCO, LIC, IL&FS, IDFC and some nationalized banks.

Raising funds through Municipal Bonds: The municipal bonds are important source of funding urban infrastructure in many countries. The ULBs in Punjab may also raise money through municipal bonds. There are two types of municipal bonds, i.e., general obligation bonds and revenue bonds. The general obligation bonds are backed by revenue raising powers of the ULBs. In case direct cost recovery from specific projects like roads, public health, street lighting, etc., is not possible, these bonds are used for financing general urban functions. The revenue bonds are backed by the user fee/ charge paid by the users of a particular municipal service. Revenue bonds are normally off-balance sheet liabilities of ULBs. These bonds are normally used for funding revenue producing public services such as housing, water supply, highways toll etc. There are many cases of revenue bonds in India. Some ULBs raised funds through these bonds, with fixed interest rates and mainly without government guarantee (except some cases where guarantee was taken). Their maturity period varies from 7-15 years and they are in the form of Structured Obligations (SO). Some bonds are taxable and some are tax free. The tax free municipal

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bonds as raised by the ULBs in many cities of other states may be raised by municipalities in Punjab to finance critical and commercially viable projects.

Credit rating for raising funds from the capital market: Only Ludhiana Municipal Corporation has the distinction of obtaining `LAA - (SO)' rating from ICRA, a national level credit rating agency and raising funds to the tune of Rs. 17.8 crores from the capital market in the form of Municipal Bonds. The borrowing through Municipal Bonds has helped LMC to finance urban environmental infrastructure, especially water supply & sewerage and providing better services and higher return. Other municipalities can also go in for credit rating to raise funds for financing commercially viable projects.

Innovative measures of urban management: Verification survey of lands and properties, strict enforcement to check leakages, better communication linkages, effective tax administration, incentive scheme for employees and informers and most importantly the computerization of records can help to raise income of ULBs.

Implementation of accounting reforms: It is high time for ULBs to switch from cash based accounting over to accrual based accounting system. This will help to establish transparency and fiscal discipline in municipal fiscal management.

Commercial exploitation of underused/misused municipal lands: It can be effectively used to generate sufficiently large resources for meeting the city infrastructure requirements. At present state government is running an innovative scheme of OUVGL (optimum utilization of vacant government lands) under which all vacant/under used government lands are made available to PUDA for planning, development and disposal in the market in order to make optimum use of these lands and to generate resources. The resources raised are credited to State Infrastructure Fund. At present there is no rational policy of allocation of this resource, as it is largely allocated on political considerations. It will be appropriate to allocate 90% of the funds raised from a city for infrastructure

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development of that particular city, which can go long way in making large volume of resources available to the cities.

Levying/rationalizing land use conversion charges: Levying/rationalizing land use conversion charges on change in land use within the urban areas can lead to generation of resources for infrastructure development. This should be done on the basis of prevalent market price. All increase in FAR and higher coverage should be linked with payment of charges in order to ensure the availability of funds for additional infrastructure required due to increased coverage and requirements of changed land use. Strict vigilance on unauthorized and irrational conversion and imposing penalties on defaulters would help in better realization of such revenue.

Transfer of external development charges (EDC): External development charges levied on developers and colonizers under the Punjab Apartment and Property Regulation Act 1995 for approved colonies at present are collected by PUDA and Town and Country Planning Department and credited to state fund created by Government. Since these charges are levied on the colonies for development of city level infrastructure, accordingly they logically belong to the city where colony is located. At present these funds are not made available to the city and its release is linked to the projects submitted by the local body. This has hampered the flow of funds since the funds remain largely unutilized. For more than 9 years no funds were released to any city/town. It is important that instead of PUDA & T&CP Department, local level authority should be declared as the competent authority to grant the license and collect the External Development Charges (EDC), which can be used for creating infrastructures in the city. However, rationalization of EDC on the pattern of Haryana would help in considerably improving returns from the private sector.

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Property Tax Reforms

Since property tax (PT) is the most important source of tax revenue in cities world over, we wish to discuss this in detail to make it a major source of revenue for the ULBs. At present it is the second source of tax revenue of ULBs after 10% share of VAT imposed in lieu of abolition of Octroi. The revenue trends indicate that its full potential has not been harnessed due to variety of political, legal and administrative reasons. It is in the long term interest of the ULBs to introduce reforms in management and collection of property tax. The First Punjab Finance Commission (1995) recommended following reforms in property tax, which may be implemented to improve its revenue:

a) Property tax be delinked from rentals to increase yield and

reduce litigation b) Vacant lands and lands used for marriage parties and for

entertainment purposes be taxed at higher rate. c) Surcharge @ 50 to 100 per cent be levied on commercial,

industrial and other non-residential establishments and polluting industries involving hazardous processes.

d) Exemptions be drastically reduced. Municipalities entitled to compensation for loss of revenue due to exemptions granted by the State Government.

e) Voluntary filing of statements by persons liable to assessment be made obligatory. Failure to file return to be punishable.

f) Municipal Valuation Committees to hear objections be constituted.

g) All records relating to assessment be made available to public on payment of a fee

The following recommendations of The Second Punjab Finance Commission (2002) may also be implemented to mobilize income of property tax and improve its overall administration:

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a) The provisions of the Punjab Municipal Bill, 1999 relating to property tax may be implemented expeditiously after incorporating the following amendments:

The power to fix the rate of tax should vest in the ULBs subject to the maximum laid down in the Act and the minimum to be prescribed by the State Government.

The Municipal Property Tax Committees may be re-constituted so that while the elected councillors may remain as its members, majority should consist of independent persons with background of law, engineering and experience of municipal administration, with a retired District Judge as Chairman in Municipal Corporations and Class-I Municipal Councils and serving or a retired Sub-Judge as Chairman in other ULBs.

A provision may be made to enable the landlord to increase the rent to compensate for the increase in the assessment of tax during the currency of the tenancy notwithstanding any provision to the contrary in the Rent Control Legislation.

A provision may be made to enable the State Government to link annually the amount of tax payable by assesses to changes in the wholesale price index.

b) The area based method for assessment of the present

market value of the property may be adopted for the purpose of determination of the annual value for levy of property tax.

c) All ULBs should start levying the property tax on vacant land on which no building has been erected but on which building can be erected and on any land on which building is in the process of erection.

d) The blanket exemption to all residential buildings occupied by the owners from property tax should be withdrawn and exemption for self-occupied houses restricted to that obtaining prior to 1.4.1997, viz. self-occupied houses on area measuring upto 250 sq.yds. in Nagar Panchayats and

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Municipal Councils Class II & Class III and single storey houses in Corporation towns and Class I Municipal towns and houses with more than one storey on plot measuring upto 125 sq yds in Municipal Corporations and Class I Municipal towns.

e) The following administrative measures may be taken to improve the yield from property tax and prevent evasion:

All the ULBs where re-assessment has not been carried out during the last five years, should carry out their re-assessment and all ULBs should ensure that in future re-assessment of properties for house tax is carried out regularly after every five years. Where necessary, external agencies may be involved on contract basis for assessment in localities where intensity of commercial and industrial properties is quite high.

Computerization of information on property tax may be given priority, particularly in all Class-I Municipal Councils and Municipal Corporations.

There should be constant linkage between the records of the buildings, water supply and house tax departments in the ULBs to ensure that all properties are covered by property tax.

There should be a field survey of all areas to locate any properties that have not been covered by the property tax. In case of Municipal Corporations and large Municipal Committees, the use of Geographical Positioning System with the help of remote sensing data may be used for locating the un-assessed properties wherever necessary.

The list of properties assessed to house tax along with the tax assessed may be published ward-wise and also on the web site of the larger ULBs after one has been set up so that any person can inform the local body about any properties that may have been left out or under assessed. Until then, all records relating to

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assessment should be made available for inspection to members of the public on payment of fee.

The sellers of properties should be required to produce the latest receipt for payment of house tax or a No Due Certificate from the concerned ULB at the time of registration of sale deed.

The Third Punjab Finance Commission (2006) highlighted that ‘In Punjab, we have a situation where private property owners enjoy large-scale exemptions. Most exemptions have been given to categories of property owners, for instance, owners of half kanal house and self-occupied houses. This has led to property tax becoming an insignificant source of income for local bodies’ (TPFC 2006). The following recommendations of TPFC (2006) are also crucial for the purpose:

All controls over the property tax regime of municipal bodies be removed.

At a conservative estimate, by switching to a unit area approach and after lifting all state Government granted exemptions, municipalities will be able to raise Rs.450 crore annually.

All ULBs should start levying property tax on vacant land on which no building has been built but on which a building can be built or is in the process of being built.

Computerization of information on property tax may be given priority, par t i cular ly in a l l Class-I Municipal Councils and Municipal Corporations.

There should be a provision for linkage between the records of the buildings, water supply and house tax departments in the ULBs to ensure that all properties are covered by property tax.

There should be a field survey of all areas to locate any properties that have not been covered by property tax.

In case of Municipal Corporations and large Municipal Committees, GIS technology and remote sensing data can be used for locating un-assessed properties, as is being done in Bangalore.

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The Ministry of Urban Development, Government of India has issued the Guidelines for Property Tax Reforms, which show that a good property tax structure should have the following characteristics:

a) A low rate of tax to make it acceptable b) Assessment and collection should be simple and

transparent c) Equity between different classes of tax payers d) Minimum discretion of assessors e) Facilitating self assessment by owners / occupiers Patna, Ahmadabad, Tamilnadu and Andhra Pradesh have

implemented growth-oriented models of property tax, which are worth-looking at for reforming this tax in Punjab. Innovative practices in valuation, assessment and tax administration like use of Geographical Information System for tax mapping, computerization of property tax records, delivery of bills through courier and a scheme of incentive and penalties and also the tax collection through ABC analysis are necessary to refurbish revenue from property tax. In Punjab, Ludhiana Municipal Corporation adopted following innovative practices to improve its revenue from property tax:

a) Survey of properties for proper valuation b) Constitution of committees to settle property tax related

disputes/litigation c) Tracking the defaulters for recovery of arrears d) Disclosure and publication of defaulters' names e) Allotting house number for proper identification of the

properties f) Computerization of manual records of properties and

billing and collection. g) Distribution of bills through courier service for quick

and assured service h) Introduction of Geographical Information System (GIS)

for quick and improved identification of properties.

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i) Assigning targets of recovery to the zonal officers particularly the Inspectorate staff

j) Attaching movable and immovable properties to recover property tax

k) Imposing fines on defaulters

The innovations introduced by LMC are growth oriented and can be replicated in other municipalities of the state to mobilize additional revenue from this source. The property tax reforms as discussed above may bring huge tax revenue to ULBs and make them financially strong to take care of additional revenue account requirements for much needed infrastructure and services in the cities and towns. Inputs for Governance Reforms

Nothing is as vital as governance reforms for expediting

urban development in the state. The required reforms may be put under three categories: institutional, functional and procedural.

The following are some of the inputs for streamlining the

institutional structure of governance.

The various departments and agencies working for urban development, including PUDA and Improvement Trusts, may be merged or rationally reorganised and brought under the broad umbrella of local government in order to eliminate the problem of multiplicity of authorities, lack of inter-agency coordination and overlapping of jurisdictions.

The existing system of state level controls over the ULBs may be redefined to grant a measure of autonomy to the ULBs by devolving power, resources and responsibilities to them in accord with the true spirit of the 74th Constitutional Amendment Act.

A State Level Governance Board comprising Mayors/Presidents of certain ULBs may be constituted as an apex body by following the democratic procedure as suggested by Gupta and Kapoor (2007) to minimize the control of bureaucracy over the ULBs.

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The various planning bodies, including the Regional Town Planning Boards, The Punjab Urban Planning and Development Authorities may be merged into one and its jurisdiction should be limited to regional/state level planning, excluding the local level planning.

The Punjab Water Supply and Sewerage Board (PWSSB) may be dissolved or else its role may be redefined to serve as an agency of local self government for planning and developing the water supply and sewerage project. In any case, ULBs may have autonomy to hire the private consultancy agency for carrying out the same task.

A local body Ombudsman may be appointed on the pattern of Kerala to conduct audits and examine public complaints against the local administration to keep a check on the excesses of the latter.

Constitution of Ward Committees may be made mandatory in order to promote peoples‟ participation, especially of the urban poor, SCs, women, minorities and youth in urban planning and development.

Structural reforms as suggested under JNNURM may be incorporated to accelerate the pace of urban development.

Coming to functional reforms the following inputs merit consideration:

All the functions, particularly the mandatory, listed under XIIth Schedule of the CAA including city planning functions, may be transferred to ULBs.

DPCs and MPCs may be activised and made truly functional.

Coverage, quality and delivery of services may be improved by adopting the following strategies: a) levying development charges which people may not

mind paying for receiving good services; b) devising ways and means to determine accountability

of the personnel concerned and disciplining the errand personnel;

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c) preparing, notifying and implementing citizens‟ charter so as to pave the way to the rise of community oversight to monitor it;

d) creating a grievance redressal cell with a commitment of time-bound responsiveness.

Measures such as the following may be adopted to provide affordable housing to the needy, especially the poor slum dwellers. a) all urban planning and development schemes may

earmark 5 percent of the land for housing for the economically weaker sections;

b) all private estate builders and private colonizers may be obliged to earmark 20-25 percent of the area or plots for the urban poor which may be used by the government for housing for the poor;

c) all centrally launched schemes of housing and habitat for the poor may be taken full advantage of.

Critical measures of slum prevention, slum development and slum resettlement may be put in place to rid the towns of slums.

Innovative measures of poverty alleviation such as programmes of skill training and employment may be devised for urban poverty alleviation. Schemes launched by the Central government for this purpose may be effectively adopted and implemented.

Serious efforts may be made to promote healthy urban environment by adopting the measures such as follows: a) burning of leafs along the roads and elsewhere may be

banned and the personnel concerned may be sensitised through training to its environmentally damaging effects;

b) ban may as well be put on the burning of agro-waste as industrial fuel;

c) necessary open spaces and parks may be provided for building healthy environment;

d) all polluting industries may be developed at a safe distance from the residential areas;

e) congested areas of the towns may be decongested by adopting a strategy of dispersal of economic activity;

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f) all development projects may be assessed in advance for their environmental impact.

Benchmarks/indicators of urban development as also of local governance may be devised and used as standards for monitoring the performance to enhance accountability in the system of urban development administration. Moving on to the area of rules and procedures, the

following inputs may be adopted:

The system of e-governance may be introduced and effectively implemented at all levels of governance, including the local-level. Increasing use of IT applications, such as GIS/MIS wherever applicable, computerisation of land registration/records, e-mode in granting of contracts and purchases, complaint redressal etc., may be adopted to enhance efficiency and transparency.

Rationalization of stamp duties may be initiated with a view to reducing it to less than 5% over a period of 7 years.

Bylaws may be revised to streamline and simplify the process of local building approvals.

The Property Title Certification System may be introduced in local governance.

An all purpose “single window” system may be adopted for licences and clearances to the private colonizers so as to minimise corruption.

„Tatkal‟ type scheme may be provided for in the ULBs for expediting delivery of a document needed by anybody. This may go a long way to prevent lot of corruption at local level.

Measures may be devised to promote time-bound disposal of cases so as to determine accountability of the personnel.

A performance appraisal mechanism may be devised to prevent underperformance and encourage good work culture. This may be strengthened by providing for incentives and sanctions.

Best practices of quality governance operative in some states may be adopted to upgrade procedural performance.

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Redefining the Role of Governance

Times have changed. Gone are the days of treating people as subjects. Today‟s public constitute citizenry. Civic awakening is the defining feature of the moment. This changed scenario warrants a need for redefining the role of governance which may be done by recasting the philosophy of governance along the following lines:

From a system of public administration to a system of public management (NPM): There is a difference between the two. Public administration puts rules over goals, procedures over performance and regulations over cultivation (harnessing). Public management is about goal setting, resource mobilization and utilization of the most efficient means to effectively achieve the goal. It is time that governance takes on a managerial orientation.

From provider to enabler: For long governance assumed the role of provider thereby generating dependency of the people on it for everything. It may better take on the role of enabler now. This implies putting premium on peoples‟ involvement at all levels including planning, decision making, resource mobilization, implementation, monitoring and evaluation. In simple words, it means involving private sector and people at large as partners in governance and development.

From harasser to facilitator: All this while governance has worked more as an agency of harassing the people than helping them. Corruption has been a big factor behind it, among others. Measures have to be put in place to turn it into an agency of facilitating people in their dealings with administration, and restoring to them their lost dignity.

From intrusive to service delivery agency: For most part, government has been working as an intrusive agency, seeking to expand its sphere of control over the lives of people. This, however, needs to change. New of the emerging philosophy of good governance. According to the new vision, good governance is that which governs the least and senses the most. The sooner we adopt this philosophy the betts.

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