Telangana becomes the third state in the country to implement urban body reforms

New Delhi: Telangana has become the third state in the country, which has successfully implemented the reforms of urban bodies. These reforms were prepared by the Department of Expenditure of the Ministry of Finance. Due to the implementation of reforms, the state has become eligible to borrow from the open market.

The state will be able to take a loan of Rs 2508 crore through this facility. The expenditure department has given permission to Telangana on 7 January 2021. Earlier Andhra Pradesh and Madhya Pradesh had implemented reforms of urban bodies. The implementation of these reforms has allowed three states to raise additional capital of Rs 7406 crore.

The objective is to enhance urban facilities and financially strengthen them in our state by improving urban bodies. Through which public health and sanitation-related services can be improved in cities. Economically strong urban bodies will also help in creating better basic resources. It is necessary for urban bodies to take the following steps through reforms:

It is the responsibility of the state for urban bodies to set the floor rate for property tax on the basis of the current circle rate (issue guidelines for rate on transaction of properties).

While deciding the floor rate, the cost of water supply, drainage, and sewerage facilities to the consumer should be made the basis. Also, old inflation will also have to be linked to this rate.

States should put in place a system in which property tax/consumer duty etc. are increased from time to time.

Apart from this, in view of the challenge of raising resources due to the Covid-19 epidemic, on May 17, the Government of India has also increased the borrowing limit for the states. Under this, states will be able to take loans equal to 2 percent of their GDP. In which half the capital-raising facility will be linked to the reforms taken by the state for the convenience of the citizens. States will get 0.25 percent of their GDP on implementing four citizen-centric reforms. Under this, they will have to implement one nation one ration card system (b) Ease of doing business reforms (c) Improvement of urban bodies/infrastructure (urgent) facilities (d) Improvement in the energy sector.

So far, one nation one ration card system has been implemented in 10 states. Similarly, 7 states have implemented Ease of Doing Business reforms and 3 states have implemented local body reforms. Under this, states that have implemented reforms have been allowed to raise additional capital of Rs 54,190 crore.

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