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Telangana becomes the 3rd State to complete Urban Local Bodies reforms

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    Polity & Governance
  • Published
    9th Jan, 2021


  • Telangana has become the 3rdState in the country to successfully undertake “Urban Local Bodies (ULB)” reform stipulated by the Department of Expenditure, Ministry of Finance.

What is Urban Local Bodies reforms initiative?

  • In view of the resource requirement to meet the challenges posed by the COVID-19 pandemic, the Government of India enhanced the borrowing limit of the States by 2 percent of their Gross States Domestic Product (GSDP).
  • Half of this special dispensation was linked to undertaking citizen centric reforms by the States.
  • The States get permission to raise additional funds equivalent to 0.25 percent of GSDP on completion of reforms in 4 sectors.
  • Telangana has now joined the two other States namely, Andhra Pradesh and Madhya Pradesh, who have completed this reform.

Which sectors are identified for reforms?

The four citizen centric areas identified for reforms were

  • Implementation of One Nation One Ration Card System
  • Ease of doing business reform
  • Urban Local body/ utility reforms
  • Power Sector reforms.

What are the objectives of the reforms in ULBs?

  • They are aimed at financial strenghtening of ULBs in the State.
  • It aims to enable them to provide better public health and sanitation services.
  • Economically rejuvenated ULBs will also be able to create good civic infrastructure.
  • The reforms stipulated to achieve these objectives are:

Urban Local Bodies

  • Municipal or local governance refers to the third tier of governance in India, at the level of the municipality or urban local body.
  • It was the 74th amendment to the Constitution of India in 1992 that brought constitutional validity to municipal or local governments.
  • As per the 2011 Census, the key urbanised areas were classified as follows
    • Statutory Towns: All administrative units that have been defined by statute as urban like Municipal Corporation, Municipality, Cantonment Board, Notified Town Area Committee, Town Panchayat, Nagar Palika etc., are known as Statutory Towns.
    • Census Towns: All Administrative units satisfying the following three criteria simultaneously: i) A minimum population of 5,000 persons ii) 75 per cent and above of the male main working population being engaged in non–agricultural pursuits; and iii) A density of population of at least 400 persons per km2. For example- Greater Noida.                       

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