NEW DELHI: Manipur has become the fourth state in the country to complete urban local bodies reforms and received Union finance ministry’s approval for additional borrowing of Rs 75 crore.
The other three states to have completed the reforms are Andhra Pradesh, Madhya Pradesh and Telangana. The reforms are stipulated by the finance ministry.
The completion of the reform has made Manipur eligible to mobilise additional financial resources to the tune of Rs 75 crore through open market borrowings. The permission for it was granted by the department of expenditure of finance ministry on Monday.
On completion of the urban local body reforms, the three states have been granted additional borrowing permission to the tune of Rs 7,481 crore, a finance ministry communiqué said.
Reforms in the urban local bodies and urban utilities are aimed at financial strengthening of the urban local bodies in the states and to enable them to provide better public health and sanitation services. The economically-strengthened urban local bodies will also be able to create good civic infrastructure.
The stipulated reforms include the states notifying floor rates of property tax in the urban local bodies in consonance with the prevailing circle rates, and floor rates of user charges in respect of the provision of water supply, drainage and sewerage that reflect current costs or past inflation.
In view of the resources required to meet the challenges posed by the COVID-19 pandemic, the Centre had on May 17, 2020, enhanced the borrowing limit of states by 2 per cent of their gross state domestic product as part of the Atmanirbhar Bharat package.
Half of the special package was linked to undertaking citizen-oriented reforms by the states. The states get permission to raise additional funds equivalent to 0.25 per cent of the respective states’ GDP on completion of reforms in each sector.
The four citizen-oriented areas identified for reforms were the implementation of one nation one ration card system, ease of doing business reform, urban local bodies/utility reforms and power sector reforms.
Ten states have so far implemented the one nation one ration card system, seven states have done ease of doing business reforms and four states have done local body reforms.
The total additional borrowing permission issued to the states that have done the reforms amounts to Rs 54,265 crore, the ministry statement added.