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Local governance and Union Budget: Whither smart city mission, urban jobs guarantee?

By IMPRI Team 

The IMPRI Center for Habitat, Urban and Regional Studies (CHURS), IMPRI Impact and Policy Research Institute, New Delhi, organized a panel discussion on ‘Local Governance and Union Budget 2023-24’ on 6th February 2023 under the IMPRI 3rd Annual Series of Thematic Deliberations and Analysis of Union Budget 2023-24. The discussion was organized under the #WebPolicyTalk series #LocalGovernance.
The session was chaired and moderated by Shri Tikender Singh Panwar, Former Deputy Mayor, Shimla; Senior Fellow, IMPRI. The discussion had an esteemed panel of eminent professors and scholars consisting of Dr Joy Elamon, Director-General, Kerala Institute of Local Administration (KILA), Thrissu; Dr Purnima Chauhan, IAS (Retd.), Secretary (Retd.), Government of Himachal Pradesh; Mr Srinivas Alavili, Renowned Urban Expert; Dr Jawed Alam Khan, Thematic Lead – Fiscal Decentralisation, Centre for Budget and Governance Accountability (CBGA), New Delhi; Mr Sameer Unhale, Urban Practitioner and Expert; Visiting Senior Fellow, IMPRI.
The session was inaugurated by Ms. Aanchal Karnani, a researcher at IMPRI, by welcoming and giving a brief introduction to the chair and panelists of the discussion. The discussion was started by Shri Tikender Singh Panwar, who briefly discussed the union budget’s significance for the Indian economy and the main objectives the current administration had for its term. He alluded to a few budgetary data, focusing on the overall pattern after analyzing the same.
Additionally, he discussed sustainable housing and a significant drop in PMAY. He complained that the current budget did not mention the smart city mission or other topics like disaster mitigation measures or the urban employment guarantee. He stressed that the urban development sector did not require a technologically driven framework alone.
Moving on to the panel discussion, Shri Tikender Singh Panwar asked the panelists to reflect on their significant budget observations. Dr. Purnima Chauhan opened the conversation by asking how the government accounts for the floating population when creating budgets and granting anything. She also questioned whether the administrative costs and IEC components in those programs were sufficient, as well as where the feedback loop and evaluation were included in the plan.
She continued by saying that Bharat Shree Ancient Script Digitization is a fantastic opportunity for employment in AYUSH in The Last Mile. In conjunction with Tikendar ji, Dr. Purnima was astounded to learn that the PMAY reduces urban housing by 13% while giving rural areas a 13% rise. She stated that our nation requires tailored capacity development programs based on the demands and available resources, as well as training programs for elected officials giving an example of Himachal Pradesh.
She emphasized that despite the fact that India is the only neighboring country in which women’s involvement in the workforce is declining, no action is being taken to strengthen gender-related programs. She finished by adding that NITI Aayog is concerned about localizing SDGs and that data is the “new oil,” and that NITI Aayog has taken action in the form of a state development index.
The discussion was taken forward by Dr. Joy Elamon. He said that while state governments must be strengthened to support local governments, they are in crisis due to the new GST system. He clarified that when looking at the budget, there are two aspects to local governance: an urban and a rural one. He claimed that urban local governance is not discussed in urban areas; only infrastructure and development are. Dr. Purnima and Dr. Joy both lamented the absence of institutions to help urban municipal administrations. He also pointed out how the states provide local governments with few roles and staff members.
According to him, many local governments have lost their main source of income due to the GST regime, and there has been no compensation offered so far. Due to Central Finance Commission awards, some funds have been moved to rural local government and, most recently, to urban local government, but most of them come with numerous regulations, leaving local governments with very little room to operate. Finally, he expressed his disappointment at the lack of an urban employment guarantee program given the current wave of widespread job cuts.
The next speaker, Mr. Srinivas Alavili, began his remarks by noting the necessity to change the governance structure for cities to work more effectively as well as the laws governing cities to provide mayors and councilors more power. This may facilitate the ULBs becoming a city government. He stated that many cities do not have elected councils, using Bengaluru as an example. For 2.5 years, there were no council meetings or elections for the city council. In his complaint, he cited Shimla as an example of a city with little funding for growth and little citizen participation and knowledge in budget presentations.
He questioned what the union government might do to handle dry and wet garbage in a systematic manner. It ought to be decentralized to local governments, or ULBs. He concluded by saying that even though Swachh Bharat, in his opinion, is a great success in terms of raising awareness and fostering a citizen movement for sanitation, cleanliness, and waste management, the central government must stay away from implementation and execution in order to give state governments more authority.
Dr. Jawed Alam Khan discussed the reality that despite the Union Budget being delivered in Delhi, the city does not have a mayor. He discussed the financial sources for local governments and emphasised that since the Amrit Kaal era has begun, we should concentrate on the policies and goals of the administration, but that local governments have had little attention. He emphasised the lack of wage employment programmes for metropolitan regions and the reduction in MGNREGA funding this year.
Additionally, there is no budget set aside for the National Rural Livelihoods Mission this year, which is a terrible condition for creating jobs. Given the issues with unemployment, he anticipated that the National Rural Livelihoods Mission and the National Urban Livelihoods Mission will receive more attention in the budget. Dr. Jawed said in his closing remarks that the Panchayati Raj should have been the nodal ministry for promoting the localization of SDGs.
The highlights of the minister’s address on the budget, which covered a number of initiatives and changes like the trade-in urban infrastructure, green credits, and property tax reforms, were presented by Mr. Sameer Unhale. Budgeting, according to his argument, should be seen as more than just a ritual. He emphasized the funding allotted to other ministries that can affect issues relating to cities, such as reducing carbon intensity, getting rid of obsolete cars, MISHTI for coastal cities, etc.
He added that for the first time, not all authorities were truly eligible for the income tax exemption, which will also have some indirect effects on cities. Mr. Unhale further stated that there is always room for improvement and that whatever an entity does may always be done more effectively. He added that the coming ten years will define the Indian generation and be very important for India. In order to eliminate any internal delays, frictions, and overlaps, he asked all three tiers of government as well as other organizations, to work together more effectively and reform their methodologies while concluding his speech.
Following an engaging and fruitful discussion, Shri Tikender Singh Panwar thanked the panelists for their important remarks and opened the floor for questions. Participants gave some interesting insights, reflections, and comments and raised quite relevant questions on a variety of issues discussed by the panel. Moving towards the end of the panel discussion, the Chair and moderator, Shri Tikender Singh Panwar asked the panelists to give their final remarks. Dr. Purnima Chauhan emphasised the necessity to evaluate urban-focused programmes and programmes created for urban regions, and to focus these programmes on the factors that contribute to urban growth. Dr. Joy noted that it is important to think about our goals, particularly in the context of the SDGs.
Urban India between 2030 and 2040 will be considerably different from what it was between 1980 and 2020, according to Mr. Sameer, who concluded by stating that the federal budget might be a very useful tool to improve readiness. Dr. Jawed requested that the state governments view the local governments as partners rather than as employees. He believes that change is necessary for further development and that the finances are not really in line with the necessity.
Shri Tikender Singh Panwar expressed his gratitude to the panellists and the IMPRI team once more for the session and gave his closing remarks on the session. The IMPRI team then concluded the event by delivering a final vote of thanks to all the panelists for participating in the discussion and sharing their valuable insights.
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Acknowledgement: Aanchal Karnani, a researcher at IMPRI

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